Abstract

Steel processing is a difficult industry to decarbonize due to the very high temperatures required in the hot rolling process. Two possible strategies to eliminate CO₂ emissions are either (i) retrofitting the fossil natural gas-fired furnaces to use green hydrogen instead, or (ii) switching to synthetic natural gas (SNG) produced via post-combustion carbon capture and utilization (CCU) of the furnaces’ flue gas coupled with a methanation reactor.

Both options involve the use of renewable electricity to produce hydrogen in an electrolysis stack, for which several technologies exist, such as Alkaline Electrolysis (AWE), Proton Exchange Membrane (PEM), and Solid-Oxide Electrolysis Cell (SOEC). Both options might imply an increase in energy consumption compared to the business-as-usual scenario. Thus, an accurate techno-economic assessment is necessary to ascertain the viability of any option.

In this work we modelled the production process and energy supply system of an Austrian steel rolling mill, including hourly profiles for production demand as well as renewable power generation. We used a MILP formulation to find the cost-optimal design (unit capacities) and operation (unit load, waste heat integration) of a H₂- or CC+SNG-based decarbonized energy supply system for the plant. We explored the parameter space for the main CAPEX and OPEX parameters as well as available capacity of the electrical grid. We found a 2.2- to 2.7-fold increase in the levelized cost of product heat for the H₂ route and 2.9- to 3.3-fold increase for the SNG route.

After analyzing the results, we conclude that, to achieve Austria’s target of carbon-neutral industry by 2040, two main challenges stand out. On the one hand, the conversion losses in the electrolysis and methanation steps, as well as the additional investment costs and the higher cost of green electricity compared to natural gas, lead to an increased levelized cost of heat. On the other hand, a strong increase in electricity demand would strain the local electrical grid and the wind power potential of the region. However, heat integration can yield significant cost improvements for onsite hydrogen production when coupled with a SOEC stack and an amine scrubber for carbon capture. Finally, both the electrical grid and the hydrogen pipeline network are revealed as crucial balancing mechanisms to provide flexibility and moderate the cost increase relative to the business-as-usual scenario.