Aotearoa-New Zealand�s Energy Future: A Model for Industrial Electrification through Renewable Integration

This work explores Aotearoa-New Zealand�s potential to fully electrify and source industrial process heat demands from renewable energy for 286 industrial sites while exploring the feasibility of green methanol production using excess electricity. Most energy models rely on spatially aggregated supply and demand, which limits the accurate representation of energy value chains. To address this limitation, the model incorporates industrial sites with varied temperature profiles, enabling the use of diverse heating technologies such as heat pumps, electrode boilers, bubbling fluidised bed reactors and biomass boilers. The proposed Mixed-Integer Linear Programming energy model uses the Accelerated Branch-and-Bound (ABB) algorithm, which is implemented within the P-graph framework to optimise the system. The model considers different energy transportation modes, including road transport for biomass and grid infrastructure for electricity. The multi-period design determines optimal heating technology capacities for each unique industrial site while accounting for renewable energy variability, spot electricity prices, and sectoral energy demand fluctuations. The optimisation results reveal the most effective configurations of heat technologies for industrial sites and projected 1.03 Mt/y of green methanol production in New Zealand when the selling price exceeds NZD1050 /ton (EUR 569 /ton). The findings demonstrate a 41.3% reduction in total process energy supply from 25.9 TWh/year to 18.8 TWh/year, driven by the higher coefficients of performance (COP) and efficiencies of electrification.