Unlocking Industrial Electrification in California through Rate Design
While the electrification of California's low-temperature industrial facilities represent a significant opportunity to reduce emissions, the state's high cost of electricity pose a major barrier for industrial electrification. In this report, Synapse identified industries in California with the highest near-term potential for electrification using industrial heat pumps, examined how existing industrial rate structures hinder the financial viability of electrification projects, and provided recommendations on alternative rate designs that leverage load flexibility to enable industrial facilities to reduce their electric bills. Synapse's modeling demonstrates that alternative rate designs coupled with load shifting can reduce electric bills by 45 to 52 percent compared to standard rates. Finally, Synapse discussed complementary policies to help improve the economics of industrial electrification projects.