Hydrogen based ironmaking in 2030

Abstract

The Iron and Steel (I&S) industry is the largest contributor to man-made greenhouse gas emissions. The products of the I&S industry are a constant necessity, e.g. for civil infrastructure. In addition, their processes are interwoven with coal and natural gas properties, which classifies this industry as a ’hard-to-abate’ sector. Furthermore, fundamental technology changes in process and energy utilisation practices are required to fully decarbonise the I&S industry before 2050. Steel processes are divided into two major production routes, the blast furnace and the direct reducing plant. Focusing on the carbon avoidance route, the hydrogen-based direct reduction process is the most promising to decarbonise the I&S industry in Europe due to its ability to use natural gas as an intermediate energy source. Several techno-economic assessments have explored the energy, emissions, and economic potential of such conceptual systems, concluding that carbon emissions are highly sensitive to the CO2 intensity of consumed electricity. However, none have used the electricity mix to estimate the electricity price and associated CO2 missions on an hourly basis to investigate the performance of such systems. Therefore, a case study is proposed of Tata Steel Netherland (TSN), which has recently announced its intention to switch towards hydrogen-based steel through the DRI-REF route. The modelling and simulation research method is used to assess this case-specific process’s technical, environmental, and economic performance in 2030. A conceptual model is developed employing the findings of the literature review. Hourly data from the national electricity mix are acquired from the EMF v7.0 model from the company Blueterra, and TSN provides specific process characteristics. From this approach, several simulations could be made for different hydrogen volumes to evaluate the performance of the DRI-REF system in the Dutch context. The simulations showed a significant shift in energy sources for increasing hydrogen volumes, which leads to a reduction of 70.1% in direct CO2 emissions under the 2030 energy market conditions. However, if the indirect electrical emissions are considered, this reduction potential is only 2.2% CO2 reduction. Although this demonstrates that in 2030 the CO2 intensity of the electricity mix is approximately the breakeven point between NG and H2 production, this development also shows a major shift from CO2 emissions towards the electricity producers. Additionally, the electricity price breakeven point is a factor 3 lower than is currently estimated by using the IPKA0 electricity generation capacity scenario of Tennet. As a result, the levelised cost of production increases by 34.9% for the maximum Htextsubscript2 volume compared to NG-based production, with electricity and capital investments as the largest increasers. Furthermore, the hourly electricity price and associated CO2 emissions data enabled to determine the variability over time. A significant increase in the interquartile spread in emissions and cost calculations is observed for increasing hydrogen volumes. This implies that in the future when electricity is predominantly produced by volatile renewable energy sources such as wind or solar energy, the production uncertainty will increase significantly if this industry shifts towards hydrogen. However, this also increases the potential of flexibility technologies. Industries with flexible production processes can thrive in the Dutch environment as they could provide load-balancing services.