Hydrogen blending for partial decarbonisation in a steel melt-shop: A year-long comprehensive analysis across multiple scenarios

Abstract

The iron and steel industry accounts for 7 % of global greenhouse gas emissions and 33 % of industrial CO₂ emissions. The challenge of achieving carbon-free operations at high temperatures is exacerbated by the limited fuel sources available. Key hurdles include utilising eco-friendly resources and creating markets for sustainable steel. The potential solution of replacing coke and natural gas with hydrogen, serving as an energy carrier, is a promising alternative. This study analyses a steel plant in Spain that aims to achieve 30 % hydrogen use in place of natural gas across all furnaces for a year-long period. Four optimisation scenarios are explored, followed by multiple sensitivity analysis scenarios to analyse the optimisation algorithms on rated power of system components, hydrogen blend variation, and hydrogen production costs. The results show that the techno-economic optimised model demonstrates the most substantial effectiveness. The hydrogen will be produced via solar-powered electrolysis, necessitating a 294.43 MW photovoltaic plant and a 109.5 MW electrolyser, resulting in a hydrogen cost of 4.49 €/kg, which is 2.5 times higher than the average price of natural gas. This cost difference is primarily driven by high investment costs and WACC (Weighted Average Cost of Capital) rates. Power Purchase Agreements (PPA) are identified as the most economical option for advancing green steel production. The technology applied in this study is projected to decrease CO₂ emissions by 163,115 tons annually. While the economic aspects remain challenging, technological progress and regulatory support will be crucial for a broader adoption of hydrogen in steelmaking.