IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v310y2022ics0306261922000654.html
   My bibliography  Save this article

Interaction between electrified steel production and the north European electricity system

Author

Listed:
  • Toktarova, Alla
  • Walter, Viktor
  • Göransson, Lisa
  • Johnsson, Filip

Abstract

This study investigates the interactions between a steel industry that applies hydrogen direct reduction (H-DR) and the electricity system of northern Europe. We apply a techno-economic optimization model with the aim of achieving net-zero emissions from the electricity and steel sectors in Year 2050. The model minimizes the investment and running costs of electricity and steel production units, while meeting the demands for electricity and steel. The modeling is carried out for a number of scenarios, which differ in the following parameters: (i) cost of using new sites for steel production; (ii) transport costs; (iii) commodities export; (iv) flexibility in operation of a direct reduction (DR) shaft furnace; and (v) location of steel demand. The results reveal that a cost-efficient spatial allocation of the electrified steel production capacity is impacted by the availability of low-cost electricity and can differ from the present - day allocation of steel plants. The modeling results show that the additional electricity demand from an electrified steel industry is met mainly by increased investments in wind and solar power while natural gas - based production of electricity is reduced. Furthermore, it is found to be cost-efficient to invest in overcapacity for steel production units (electrolyzers, DR shaft furnaces and electric arc furnaces) and to invest in storage systems for hydrogen and hot briquetted iron, so that steel production can follow the variations inherent to wind and solar power.

Suggested Citation

  • Toktarova, Alla & Walter, Viktor & Göransson, Lisa & Johnsson, Filip, 2022. "Interaction between electrified steel production and the north European electricity system," Applied Energy, Elsevier, vol. 310(C).
    • Handle: RePEc:eee:appene:v:310:y:2022:i:c:s0306261922000654
    DOI: 10.1016/j.apenergy.2022.118584
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261922000654
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2022.118584?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lechtenböhmer, Stefan & Nilsson, Lars J. & Åhman, Max & Schneider, Clemens, 2016. "Decarbonising the energy intensive basic materials industry through electrification – Implications for future EU electricity demand," Energy, Elsevier, vol. 115(P3), pages 1623-1631.
    2. Göransson, Lisa & Goop, Joel & Odenberger, Mikael & Johnsson, Filip, 2017. "Impact of thermal plant cycling on the cost-optimal composition of a regional electricity generation system," Applied Energy, Elsevier, vol. 197(C), pages 230-240.
    3. Clark, Brian & Hasan, Iftekhar & Lai, Helen & Li, Feng & Siddique, Akhtar, 2021. "Consumer defaults and social capital⋆," Journal of Financial Stability, Elsevier, vol. 53(C).
    4. Lisa Göransson & Mariliis Lehtveer & Emil Nyholm & Maria Taljegard & Viktor Walter, 2019. "The Benefit of Collaboration in the North European Electricity System Transition—System and Sector Perspectives," Energies, MDPI, vol. 12(24), pages 1-23, December.
    5. Karlson, Stephen H, 1983. "Modeling Location and Production: An Application to U.S. Fully-Integrated Steel Plants," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 41-50, February.
    6. Sequeira, Sandra & Nardotto, Mattia, 2021. "Identity, Media and Consumer Behavior," CEPR Discussion Papers 15765, C.E.P.R. Discussion Papers.
    7. ., 2021. "Persuading consumers," Chapters, in: The Global Rise of the Modern Plug-In Electric Vehicle, chapter 12, pages 397-436, Edward Elgar Publishing.
    8. Walter Isard, 1948. "Some Locational Factors in the Iron and Steel Industry since the Early Nineteenth Century," Journal of Political Economy, University of Chicago Press, vol. 56(3), pages 203-203.
    9. Paramasivam, R Malaiarasan & Umanath, 2021. "Fish consumption in India: probability and demand," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 34(1), June.
    10. Dolf Gielen & Deger Saygin & Emanuele Taibi & Jean‐Pierre Birat, 2020. "Renewables‐based decarbonization and relocation of iron and steel making: A case study," Journal of Industrial Ecology, Yale University, vol. 24(5), pages 1113-1125, October.
    11. Björn Nykvist & Måns Nilsson, 2015. "Rapidly falling costs of battery packs for electric vehicles," Nature Climate Change, Nature, vol. 5(4), pages 329-332, April.
    12. ., 2021. "Consumption and our place in nature," Chapters, in: Sustainable Consumption, Production and Supply Chain Management, chapter 5, pages 28-38, Edward Elgar Publishing.
    13. ., 2021. "Sustainable consumption: an intractable problem?," Chapters, in: Sustainable Consumption, Production and Supply Chain Management, chapter 2, pages 8-14, Edward Elgar Publishing.
    14. Rajagopal, 2021. "Consumer Behavior and Cognitive Theories," Springer Books, in: Crowd-Based Business Models, chapter 0, pages 197-225, Springer.
    15. Kan, Xiaoming & Hedenus, Fredrik & Reichenberg, Lina, 2020. "The cost of a future low-carbon electricity system without nuclear power – the case of Sweden," Energy, Elsevier, vol. 195(C).
    16. ., 2021. "Consumer perspectives," Chapters, in: The Global Rise of the Modern Plug-In Electric Vehicle, chapter 2, pages 34-72, Edward Elgar Publishing.
    17. ., 2021. "Unsustainable consumption: conclusions," Chapters, in: Sustainable Consumption, Production and Supply Chain Management, chapter 7, pages 42-44, Edward Elgar Publishing.
    18. Brynolf, Selma & Taljegard, Maria & Grahn, Maria & Hansson, Julia, 2018. "Electrofuels for the transport sector: A review of production costs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 1887-1905.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Superchi, Francesco & Mati, Alessandro & Carcasci, Carlo & Bianchini, Alessandro, 2023. "Techno-economic analysis of wind-powered green hydrogen production to facilitate the decarbonization of hard-to-abate sectors: A case study on steelmaking," Applied Energy, Elsevier, vol. 342(C).
    2. Lopez, Gabriel & Galimova, Tansu & Fasihi, Mahdi & Bogdanov, Dmitrii & Breyer, Christian, 2023. "Towards defossilised steel: Supply chain options for a green European steel industry," Energy, Elsevier, vol. 273(C).
    3. Walter, Viktor & Göransson, Lisa & Taljegard, Maria & Öberg, Simon & Odenberger, Mikael, 2023. "Low-cost hydrogen in the future European electricity system – Enabled by flexibility in time and space," Applied Energy, Elsevier, vol. 330(PB).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Campbell, Daniel & Grant, Andrew & Thorp, Susan, 2022. "Reducing credit card delinquency using repayment reminders," Journal of Banking & Finance, Elsevier, vol. 142(C).
    2. Caputo, Vincenzina & Lusk, Jayson L., 2022. "The Basket-Based Choice Experiment: A Method for Food Demand Policy Analysis," Food Policy, Elsevier, vol. 109(C).
    3. Urbano, Eva M. & Martinez-Viol, Victor & Kampouropoulos, Konstantinos & Romeral, Luis, 2021. "Energy equipment sizing and operation optimisation for prosumer industrial SMEs – A lifetime approach," Applied Energy, Elsevier, vol. 299(C).
    4. Torres Pena, Maria Veronica & Breidbach, Christoph F., 2021. "On emergence in service platforms: An application to P2P lending," Journal of Business Research, Elsevier, vol. 135(C), pages 337-347.
    5. Alla Toktarova & Lisa Göransson & Filip Johnsson, 2021. "Design of Clean Steel Production with Hydrogen: Impact of Electricity System Composition," Energies, MDPI, vol. 14(24), pages 1-21, December.
    6. Walter, Viktor & Göransson, Lisa & Taljegard, Maria & Öberg, Simon & Odenberger, Mikael, 2023. "Low-cost hydrogen in the future European electricity system – Enabled by flexibility in time and space," Applied Energy, Elsevier, vol. 330(PB).
    7. Maria Taljegard & Lisa Göransson & Mikael Odenberger & Filip Johnsson, 2021. "To Represent Electric Vehicles in Electricity Systems Modelling—Aggregated Vehicle Representation vs. Individual Driving Profiles," Energies, MDPI, vol. 14(3), pages 1-25, January.
    8. Bellocchi, Sara & De Falco, Marcello & Gambini, Marco & Manno, Michele & Stilo, Tommaso & Vellini, Michela, 2019. "Opportunities for power-to-Gas and Power-to-liquid in CO2-reduced energy scenarios: The Italian case," Energy, Elsevier, vol. 175(C), pages 847-861.
    9. Lisa Göransson & Mariliis Lehtveer & Emil Nyholm & Maria Taljegard & Viktor Walter, 2019. "The Benefit of Collaboration in the North European Electricity System Transition—System and Sector Perspectives," Energies, MDPI, vol. 12(24), pages 1-23, December.
    10. Lisa Göransson, 2023. "Balancing Electricity Supply and Demand in a Carbon-Neutral Northern Europe," Energies, MDPI, vol. 16(8), pages 1-27, April.
    11. Ghebrihiwet, Nahom & Kinda, Tidiane, 2021. "Downstream beneficiation: A cross-country analysis of factors underlying the emergence of a steel industry," Resources Policy, Elsevier, vol. 70(C).
    12. Hannula, I. & Reiner, D., 2017. "The race to solve the sustainable transport problem via carbon-neutral synthetic fuels and battery electric vehicles," Cambridge Working Papers in Economics 1758, Faculty of Economics, University of Cambridge.
    13. Beiron, Johanna & Montañés, Rubén M. & Normann, Fredrik & Johnsson, Filip, 2020. "Flexible operation of a combined cycle cogeneration plant – A techno-economic assessment," Applied Energy, Elsevier, vol. 278(C).
    14. Korberg, A.D. & Brynolf, S. & Grahn, M. & Skov, I.R., 2021. "Techno-economic assessment of advanced fuels and propulsion systems in future fossil-free ships," Renewable and Sustainable Energy Reviews, Elsevier, vol. 142(C).
    15. Anissa Nurdiawati & Frauke Urban, 2021. "Towards Deep Decarbonisation of Energy-Intensive Industries: A Review of Current Status, Technologies and Policies," Energies, MDPI, vol. 14(9), pages 1-33, April.
    16. Morgenthaler, Simon & Kuckshinrichs, Wilhelm & Witthaut, Dirk, 2020. "Optimal system layout and locations for fully renewable high temperature co-electrolysis," Applied Energy, Elsevier, vol. 260(C).
    17. Blanco, Herib & Nijs, Wouter & Ruf, Johannes & Faaij, André, 2018. "Potential for hydrogen and Power-to-Liquid in a low-carbon EU energy system using cost optimization," Applied Energy, Elsevier, vol. 232(C), pages 617-639.
    18. Ren, Lei & Zhou, Sheng & Peng, Tianduo & Ou, Xunmin, 2021. "A review of CO2 emissions reduction technologies and low-carbon development in the iron and steel industry focusing on China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    19. Walter, Viktor & Göransson, Lisa, 2022. "Trade as a variation management strategy for wind and solar power integration," Energy, Elsevier, vol. 238(PA).
    20. Napp, T.A. & Few, S. & Sood, A. & Bernie, D. & Hawkes, A. & Gambhir, A., 2019. "The role of advanced demand-sector technologies and energy demand reduction in achieving ambitious carbon budgets," Applied Energy, Elsevier, vol. 238(C), pages 351-367.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:310:y:2022:i:c:s0306261922000654. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.