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A system dynamics analysis of energy consumption and corrective policies in Iranian iron and steel industry


  • Ansari, Nastaran
  • Seifi, Abbas


Iron and steel industry is the most energy intensive industrial sector in Iran. Long time subsidized energy has led to low energy efficiency in this industry. The sudden subsidy reform of energy prices in Iran is expected to have a great impact on steel production and energy consumption. A system dynamics model is presented in this paper to analyze steel demand, production and energy consumption in an integrated framework. A co-flow structure is used to show how subsidy reform affects energy consumption in the long run. The main focus of this paper is on direct and indirect natural gas consumption in the steel industry. Scrap based Electric Arc Furnace technology has been evaluated as an energy efficient way for steel making. The energy consumption in steel industry is estimated under various steel production and export scenarios while taking into account new energy prices to see the outlook of possible energy demand in steel industry over next 20 years. For example it is shown that under reference production scenario, potential reduction in gas consumption forced by complete removal of energy subsidy and utilizing scrap could lead to 85 billion cubic meters of gas saving over the next 20 years.

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  • Ansari, Nastaran & Seifi, Abbas, 2012. "A system dynamics analysis of energy consumption and corrective policies in Iranian iron and steel industry," Energy, Elsevier, vol. 43(1), pages 334-343.
  • Handle: RePEc:eee:energy:v:43:y:2012:i:1:p:334-343
    DOI: 10.1016/

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    References listed on IDEAS

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    3. Hu, Rui & Zhang, Qun, 2015. "Study of a low-carbon production strategy in the metallurgical industry in China," Energy, Elsevier, vol. 90(P2), pages 1456-1467.
    4. Kovačič, Miha & Šarler, Božidar, 2014. "Genetic programming prediction of the natural gas consumption in a steel plant," Energy, Elsevier, vol. 66(C), pages 273-284.
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    9. Qudrat-Ullah, Hassan, 2017. "How to enhance the future use of energy policy simulation models through ex post validation," Energy, Elsevier, vol. 120(C), pages 58-66.
    10. Xiaopeng Guo & Yanan Wei & Jiahai Yuan, 2016. "Will the Steam Coal Price Rebound under the New Economy Normalcy in China?," Energies, MDPI, Open Access Journal, vol. 9(9), pages 1-13, September.
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    14. Qudrat-Ullah, Hassan, 2013. "Understanding the dynamics of electricity generation capacity in Canada: A system dynamics approach," Energy, Elsevier, vol. 59(C), pages 285-294.
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    16. Pan, Lingying & Liu, Pei & Li, Zheng, 2017. "A system dynamic analysis of China’s oil supply chain: Over-capacity and energy security issues," Applied Energy, Elsevier, vol. 188(C), pages 508-520.
    17. Qudrat-Ullah, Hassan, 2015. "Independent power (or pollution) producers? Electricity reforms and IPPs in Pakistan," Energy, Elsevier, vol. 83(C), pages 240-251.


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