Techno-economic assessment of decarbonising bitumen storage

This study presents an investigation into the cost-effective decarbonisation of bitumen storage heating, based on a small refinery in the UK, by means of electrification coupled with Demand Side Management (DSM). Full Scope 1 decarbonisation is achieved through a fuel switch from natural gas and fuel oil heaters to electric immersion heaters. A techno-economic assessment is carried out to both establish the refinery’s capacity for DSM and subsequently determine the most cost effective DSM approach. Computational Fluid Dynamics (CFD) modelling reveals that variable heating patterns do not result in the violation of the bitumen’s recognised storage temperature constraints. Therefore, access to an estimated potential thermal energy storage capacity of 201MWh is possible. Three DSM opportunities are evaluated within the economic analysis: the Day Ahead (DA) market, the Balancing Mechanism (BM), and combining purchase from the BM with participation in the Short Term Operating Reserve (STOR) scheme. It is found that participating in the BM yields the most substantial potential cost reduction, amounting to a 52.6% reduction compared to the purchase of retail industrial electricity. Therefore, this scenario presents the lowest greenhouse gas avoidance cost, estimated at 199£/tCO2e, and the smallest increase in bitumen production price, at 1.78£/t. Centralised projections subsequently indicate market competitiveness by 2028 and economic benefits by 2037, notwithstanding significant uncertainties in future energy prices, DSM market evolution, and broader policy developments. These findings suggest that electrification coupled with DSM can serve as a scalable solution for decarbonising industrial heating applications, providing a replicable model for other energy intensive industries transitioning to net zero pathways.