Can Industrial Overcapacity Enable Seasonal Flexibility in Electricity Use? A Case Study of Aluminum Smelting in China

A Harvard-China Project Research Seminar with Ruike Lyu, Visiting Student Research Collaborator (VSRC) at ZERO Lab, Princeton University; Ph.D Candidate in Electrical Engineering at Tsinghua University

In many countries, declining demand in energy-intensive industries (EIIs) such as cement, steel, and aluminum is leading to industrial overcapacity. Although industrial overcapacity is traditionally envisioned as problematic and resource-wasteful, it could unlock EIIs’ flexibility in electricity use. Here, using China’s aluminum smelting (AS) industry as a case study, we evaluate the system-level cost-benefit of retaining EII overcapacity for flexible electricity use in decarbonized energy systems. We find that overcapacity can enable aluminum smelters to adopt a seasonal operation paradigm, ceasing production during winter load peaks exacerbated by heating electrification and renewable seasonality. In the 2050-net-zero scenario, the seasonal operation paradigm can reduce China’s electricity system investment and operational costs by 15-72 billion CNY/year (or 8-34% of the AS industry’s product value), sufficient to offset the costs of maintaining overcapacity and product storage. It also reduces workforce fluctuations across the AS and thermal power generation sectors by up to 62%, potentially mitigating socio-economic disruptions from industrial restructuring and the energy transition.

Speaker:

Ruike Lyu received his B.S. degree in Electrical Engineering from Tsinghua University, Beijing, China, in 2021, where he is currently finishing his Ph.D. degree. Since February 2025, he has been a visiting scholar at the ZERO Lab at Princeton University. His research focuses on demand-side flexibility from electric vehicles and industrial loads, particularly their integration into power markets. Ruike has received several awards for his work, including Best Paper/Presentation at CEEPE 2024, EECT 2025, and PSSGT 2025. He was also awarded Best Presentation at the IEEE PES Ph.D. Dissertation Challenge in 2025.

Sponsored by the Harvard-China Project on Energy, Economy, and Environment at the Harvard School of Engineering and Applied Science (SEAS)

Questions? Contact Kellie Nault