HWNEWS
In nearly every U.S. state, electricity still costs manufacturers more than natural gas for the same amount of heat, even though industrial heat pumps and heat storing batteries are already on the market.
In nearly every U.S. state, an industrial heat pump that runs on electricity costs a manufacturer more per unit of heat than a gas burner. That gap is set by state public utility commissions, not by the equipment, and it is the lock on America's clean industrial switch.
The furnaces, boilers, and ovens that cook packaged food into shelf-stable meals, mold plastic into bathroom cabinets, and split hydrocarbons at chemical plants all run on heat. Most of that heat still comes from burning fossil fuels on site, and industrial process heat accounts for roughly one-third of U.S. energy-related CO2 emissions. The technologies that could clean it up, including industrial heat pumps, electric boilers, and heat-storing batteries, are already on the market. The bottleneck is the bill.
Manufacturers price natural gas and electricity the same way, per unit of heat delivered, so the comparison is direct. Where gas is locally cheap and electricity is priced for residential use, electricity loses. The result is a structural penalty on the cleanest option, set by state rate design and by the absence of a carbon price that reflects the smoke coming out of the smokestack. The smokestack is essentially free; the wire is not.
Neil Brown, speaking for Eastman Chemical, which runs more than a dozen U.S. sites from its Kingsport, Tennessee headquarters, put the constraint plainly on a webinar held last month by the Renewable Thermal Collaborative and the Industrial Heat Pump Alliance. "We have to have solutions that are at the very least competitive with the existing cost of fuel," he said. Brown flagged the Southeast and Texas as the hardest cases, because regional gas prices are low and gas has long been the default fuel for industrial boilers.
Electrifying the low- and medium-temperature slice of industrial heat, the part that today's heat pumps and thermal batteries can already reach, would add roughly 250 terawatt-hours to U.S. industrial electricity demand by 2035, according to the Renewable Thermal Collaborative and Industrial Heat Pump Alliance. For comparison, that is about a quarter more electricity than all U.S. manufacturers use today, or roughly the annual residential use of tens of millions of American homes.
The coalition's June report puts a number on what leaving the lock in place costs: deploying the available clean industrial technology would generate roughly $471 billion in total U.S. economic output over the next decade, even after subtracting lost activity at gas utilities and equipment makers. That figure is the price of inaction, not a growth forecast.
State public utility commissions can rebalance industrial rates so electricity competes with gas per unit of heat for high-load users, instead of spreading residential-style rates across the factory floor. Time-of-use manufacturing rates can pay factories to shift heat-pump and thermal-battery draw to the cheapest, cleanest grid hours. On-site clean generation, including solar, wind, or stored heat, lets a plant price its own thermal units against the gas line. And demand-response programs designed for industrial heat pumps can pay a chemical plant or a food processor the way a smart thermostat gets paid for letting the grid breathe.
The thermal-battery vendor Antora is already storing renewable heat for factory use. The California solar-and-heat playbook shows what happens to the math when abundant clean power sits on the same side of the meter as the plant. What is missing is a price on the bill that reflects what the country has already decided it wants: factories that keep making things without burning the carbon that comes out of the smokestack.