On the Potential of Electrified Supply Chains to Provide Long Duration Demand Flexibility

TL;DR

This paper explores how fully electrified supply chains, such as in the cement industry, can provide long-duration demand flexibility over weeks, helping to balance renewable energy variability without relying on expensive storage.

Contribution

It demonstrates the potential for electrified supply chains to offer long-term demand flexibility, a novel approach that leverages supply chain latency and low-cost electrification.

Findings

Electrified supply chains can shift GWh of demand for over a week.

Demand flexibility is achievable at low carbon taxes (<$50/ton).

Lower costs of heavy goods electric vehicles enhance flexibility.

Abstract

Demand flexibility can offset some of the variability introduced on the supply-side by variable renewable generation. However, most efforts (e.g. control of residential vehicle charging) focus on short durations -- typically on the scale of minutes to hours. This paper investigates whether a fully electrified supply chain (transport and manufacturing) could provide demand flexibility over longer durations, exploiting the latency that typically exists between the processing of raw material to the delivery of finished product. Using a case study of the cement industry along the East Coast of the United States, we demonstrate that electrified supply chains could shift gigawatt-hours (GWh) of electricity demand for durations of more than a week, largely following wind power variability. Furthermore, we show that this occurs using low levels of carbon taxing (below $50/tn), at which battery storage is not economically viable. A sensitivity analysis shows potential to provide flexibility in all considered cost scenarios, although where the flexibility comes from can change (e.g. transport vs manufacturing). We show that today's cost of electrified heavy goods vehicles are the most significant parameter -- with substantially lower costs yielding a more demand-flexible supply chain.