Electrification of industry - the first step toward zero-emission and lower-cost production

Electrification of industry involves replacing technologies and equipment powered by fossil fuels with their electric counterparts. This includes both heat sources (e.g. boilers, furnaces, heaters) as well as machine drives or internal transport systems. Electricity becomes the main energy carrier in the facility and, where possible, comes from renewable energy sources (RES) or high-efficiency cogeneration.

The electrification process of an industrial plant usually takes place in two stages. In the first step, the company replaces fossil fuel-based installations – such as coal-fired steam boilers, gas dryers, or combustion engines – with electric devices. For example, water and steam boilers can be replaced with electric heaters, electrode boilers, or industrial heat pumps, which usually offer higher energy efficiency. Combustion or steam drives, on the other hand, can be replaced with electric motors controlled by inverters.

In the second stage, after electrifying the sources, the plant can proceed to "greening" the electricity supply, i.e. reducing the carbon footprint of the power it consumes. This is done by investing in on-site RES (e.g. PV installations on production hall rooftops or wind farms on plant grounds), purchasing green energy with guarantees of origin, or implementing biogas or even hydrogen cogeneration, which enables the simultaneous production of electricity and heat from a single fuel at very high efficiency. This sequence – first electrification, then decarbonization of the electricity source – allows for staggered investment and gradual environmental improvements, while also reducing costs.

The main goal of electrification is to reduce Scope 1 greenhouse gas emissions by moving away from fossil fuel combustion in favor of electricity, which can increasingly come from low-emission sources. Changing the energy source also allows companies to become independent from volatile prices of natural gas, coal, and heating oil, which can spike during global crises or wars.

Is electrification more expensive than traditional energy sources like coal or natural gas? The answer is not straightforward – it depends on the type of process, available technologies, and the scale of operations.

Fuel price vs. electricity price

In terms of energy units (kWh), fossil fuels are often cheaper – especially coal. However, electricity can be sourced from on-site RES or cogeneration, which significantly reduces grid purchase costs. Moreover, technologies like photovoltaic installations, which are virtually maintenance-free, have nearly zero operating costs.

Operating costs

Electric devices are easier to operate, cleaner, and more reliable. For example:

• induction or electric heaters can reach efficiencies of 95–99%, whereas coal boilers often operate at only 72–80% efficiency;
• no combustion means no need for flue gas treatment, system cleaning, ash storage, etc.
• as a result, the total operating cost (OPEX) can be lower despite the higher unit price of electricity.

Energy efficiency – electricity beats fuels

Electrifying industry also significantly improves the energy efficiency of production equipment. For example:

• electric boilers reach efficiencies of 95–99%, while gas-fired steam boilers typically average 88–90% annually,
• induction furnaces offer efficiencies of 90–97%, compared to gas furnaces, which rarely exceed 60–70%,
• industrial heat pumps can have a coefficient of performance (COP) between 2.5 and even 5, meaning they deliver several times more heat energy than the electrical energy they consume,
• electric machine drives – especially synchronous motors or those with frequency converters – offer efficiencies of 93–98%, significantly outperforming many older combustion drives.

High efficiency not only reduces energy consumption but also minimizes heat losses and pollutant emissions, delivering both economic and environmental benefits.

From a climate perspective, switching from fossil fuels to electricity (especially green electricity) is one of the most effective ways to reduce industrial emissions.

Lignite emits approx. 0.35 tons of CO₂/MWh, natural gas about 0.2 tons of CO₂/MWh, and RES energy – 0 tons of CO₂.

If the electricity comes from the grid, emissions are still lower than from burning coal, and they can be further reduced by integrating PV, wind, or storage systems. This sequence is also typically followed in net-zero strategies – first, maximize energy efficiency to reduce demand, then electrify the facility and “green” the electricity. For net zero, remaining emissions should later be offset as well.

Electrification is a key component of industrial decarbonization. Companies implementing such measures benefit from:

• market competitiveness – more customers expect low-carbon products,
• better access to financing – banks and funds prefer “green” projects,
• lower regulatory risk from EU policies and better alignment with Fit for 55,
• ESG reporting capabilities with real progress.

Electrification of industrial processes is a necessary step toward a modern, sustainable industry. Replacing fossil fuel-based technologies with electric solutions opens the door to decarbonization, higher energy efficiency, and integration with RES – which will become increasingly accessible and widespread in the coming years. While changing energy sources requires well-planned investments, it brings long-term benefits – from reducing energy costs to strengthening market competitiveness in a world increasingly sensitive to carbon footprints. Facilities that choose electrification will gain greater flexibility and security, the ability to implement modern energy management systems, and better preparedness for future regulatory changes.