Lead times for investments in electrification. Insight into the timeline of the Dutch Climate Agreement

This study, for the Dutch Renewable Energy Association (NVDE), examines the lead times of four options for industrial electrification, one of the main planks of the Dutch Climate Agreement, which on its own needs to provide 4.2 Mt CO2 reduction in 2030 (PBL, 2019). The terms of the Climate Agreement imply a need for complex, interrelated investments, from changes in industrial processes to construction of high-voltage lines, which means long lead times. Availability of renewable power in sufficient quantities is also vital to achieving the envisaged cuts in CO2 emissions.

This report provides insight into the timelines for implementing the following four electrification options by the year 2030:

  • electric boilers in industry
  • large-scale industrial heat pumps
  • large-scale electrolysis-based hydrogen production
  • heat grids with central heat pump and aquathermy.

The study takes 2030 as its horizon, though some of the required electrification will need to be realized earlier.

The results of this study show that the electrification projects will have to get underway in 2021 to guarantee they are operational in 2030. Based on the averages calculated, the aggregate lead time for the four options is between 8.5 and 10.5 years. Allowing for uncertainties, the full potential time span is between 6.5 and 16 years. This means work on the electrification projects should really start immediately, but within six months to 2.5 years at the latest, to achieve operationality in 2030. This will not be feasible at all locations, as some of the lead times lick off prior to 2021. By far the main factor determining lead times is grid reinforcement. Whether heavier-duty power lines and higher equipment power ratings will be required will vary considerably according to location and technology, as will the associated time schedules.


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