Electrification of Industry: A Global Shift

Historically, industrial activities have relied heavily on molecules such as oil, coal, and gas for energy. However, there is a growing transition towards using electrons—clean and reliable electricity—as the primary energy source. This shift is crucial for reducing emissions and enhancing competitiveness in the global market.

China's Strategic Lead

• China draws nearly half of its industrial energy from electricity, significantly above the global average.
• The country has invested in extensive infrastructure, including generation, transmission, and storage, to support this shift.
• China's emphasis on electrification is reflected in its industries, such as steel and cement, where electric processes are increasingly adopted.
• China's economic strategy involves prioritizing the electrification of industry to enhance export competitiveness in low-carbon markets.

India's Position and Challenges

• India's industrial sector's reliance on electricity is about one-quarter, and green electricity constitutes only 7%-8% of total energy use.
• Challenges include reliance on traditional combustion methods, inconsistent power quality, and policy focus on energy generation rather than industrial electrification.
• India has made progress in renewable energy, especially solar, but needs to transition more industries towards electrification.

Opportunities and Recommendations for India

• Increase the share of electric-arc-furnace steel production by improving infrastructure for scrap steel.
• Support electrified kilns and waste-heat recovery in the cement industry to reduce the dependence on molecules.
• Encourage MSMEs to adopt electric technologies through financial incentives and technical support.
• Integrate digitalization in industrial processes to boost efficiency and meet international carbon standards.

Importance Beyond Climate

• Competitiveness: Adopting green electrons helps meet global buyer demands for low-carbon products.
• Security: Reliance on domestic electricity reduces vulnerability to global fuel price fluctuations.
• Sovereignty: Industries can be located based on strategic advantages rather than fuel availability.

Conclusion

The global competition is not just between electrons and molecules but also between green and grey electrons. China's strategic focus on industrial electrification gives it a competitive edge. India must prioritize this shift to avoid economic penalties, such as those imposed by the EU's Carbon Border Adjustment Mechanism, and seize future opportunities in the global market.