Effects of sector coupling on the decarbonization potential of the manufacturing sector–an integration of the power, hydrogen, and manufacturing sectors

Abstract

Sector coupling emerges as a potentially efficient strategy for emission reduction, particularly when the power sector is sufficiently decarbonized. This study aims to explore the effects of sector coupling on the decarbonization of the manufacturing sector. This study also develops the hybrid energy system model by integrating bottom-up energy system models for the power and manufacturing sectors with the computable general equilibrium model. The hybrid model helps to explain the integration of the power, hydrogen, and manufacturing sectors. The manufacturing sector is electrified and integrated with other sectors based on its use of decarbonized electricity and electrolysis hydrogen. With a carbon tax rate of 200,000 Korean won (161 U S. dollars) per ton of carbon dioxide equivalent, the percentage of electricity in the manufacturing sector's energy mix is expected to increase from 30 % to 46 % by 2050 if electrolysis hydrogen is considered. Moreover, emission reduction from sector coupling accounts for more than 50 % of the total emission reduction in the manufacturing sector. If policymakers consider the overall benefit of decarbonizing the power sector and aid the development of power-to-X technologies, sector coupling can contribute the decarbonization of the manufacturing sector significantly. © 2024 The Authors