Energy System Requirements of Fossil-free Steelmaking using Hydrogen Direct Reduction

The iron and steel industry is one of the world’s largest industrial emitters of greenhouse gases. One promising option for decarbonising the industry is hydrogen direct reduction of iron (H-DR) with electric arc furnace (EAF) steelmaking, powered by zero carbon electricity. However, to date, little attention has been given to the energy system requirements of adopting such a highly energy-intensive process. This study integrates a newly developed long-term energy system planning tool, with a thermodynamic process model of H-DR/EAF steelmaking developed by Vogl et al. (2018), to assess the optimal combination of generation and storage technologies needed to provide a reliable supply of electricity and hydrogen. The modelling tools can be applied to any country or region and their use is demonstrated here by application to the UK iron and steel industry as a case study. It is found that the optimal energy system comprises 1.3 GW of electrolysers, 3 GW of wind power, 2.5 GW of solar, 60 MW of combined cycle gas with carbon capture, 600 GWh/600 MW of hydrogen storage, and 30 GWh/130 MW of compressed air energy storage. The hydrogen storage requirements of the industry can be significantly reduced by maintaining some dispatchable generation, for example from 600 GWh with no restriction on dispatchable generation to 140 GWh if 20% of electricity demand is met using dispatchable generation. The marginal abatement costs of a switch to hydrogen-based steelmaking are projected to be less than carbon price forecasts within 5–10 years.