Industry routinely switches fuels in response to relative prices or shortages and seeks to cut costs and hedge risks, and switching from coal to natural gas for process heat is no longer unusual.

However, natural gas too will be worth displacing as its prices rise. Substituting heat from increasingly renewable electricity, directly or via heat pumps, and solar process heat can avoid emissions, stabilize heat prices, and further reduce industry’s reliance on volatile fossil fuels.

Solar thermal competitiveness with 2009 U.S. industrial natural gas prices

Solar thermal heating can deliver some of the process heating requirements for industry. Given the high volatility of natural gas prices, pricing for solar thermal projects on a lifecycle cost of heat basis can be competitive with natural gas.

 

Fuel–switching options in industry

With current fuel prices, most coal and oil use can be switched to natural gas for process heating needs.

 

 

Marginal cost of thermal energy delivered, 2010

Cogeneration with natural gas delivers the cheapest heat. With higher fossil fuel costs, heat pumps and solar thermal heat will become increasingly competitive sources of thermal energy.

 

 

Marginal cost of thermal energy (steam) delivered, 2010

The addition of a carbon tax will change the relative pricing per unit of heat for different fuels. At current fuel prices, heat pumps become cost competitive with coal (boiler) and natural gas (cogen) at ~$30/ton and ~$60/ton respectively.