Abstract
Electrifying industrial process heat production links industrial decarbonization to power-system constraints, increasing the need for flexibility. We apply an integrated energy system model, coupling industrial heat demands with district heating systems, to quantify how thermal energy storage (TES) and heat exchange with district heating affect cost-optimal decarbonization pathways for a region in Germany. We investigate the investments required in the transition towards a fully decarbonized energy system, including energy storage, heat pumps and renewable electricity generation, from today to 2050 with tightening emission restrictions. Results show that TES lowers total system costs by 6%–12% and reduces wind and solar curtailment, thereby substituting up to 36% of the cost-optimal battery capacity. In industry, low-temperature TES is deployed in early investment periods to even out heat pump operation and reduce the required heat pump capacity. On the other hand, high-temperature TES becomes relevant in later, highly electrified periods to time-shift power-intensive heat production under grid constraints. Coupling industry and district heating reduces the need for low-temperature storage by sharing heat across sectors, and unlocks more efficient process electrification by providing a heat source for high-temperature heat pumps. This leads to heat exchange between industry and district heating shifting fro