Assessment of the role of hydrogen to produce high-temperature heat in the steel industry

The iron and steel industry is a major source of industrial greenhouse gas emissions, accounting for 7-9% of global energy-related CO2 emissions. Current steel production routes are therefore expected to undergo a profound decarbonisation process in the coming decades. This work aims to shed light on the role of hydrogen in decarbonising the supply of high-temperature heat in the steel sector by means of an optimisation framework. The model includes on-site hydrogen production using a low-temperature electrolyser integrated with a compression and storage system and gas burners, which can be fed with hydrogen and/or natural gas to cover the process heat demand. The assessment also takes advantage of real thermal load profiles of a scrap-based electric arc furnace steel plant. A sensitivity analysis is conducted on the electricity, natural gas and carbon prices. Cost-optimal maps are then derived to unveil the combination of energy and carbon prices at which hydrogen becomes convenient for heat production in the steel industry. A general relationship to define the cost-effectiveness of hydrogen is also given. The results show that, at current carbon prices (about 100 €/tCO2), the use of hydrogen becomes economically convenient when the electricity price is less than 0.4-0.6 times the natural gas price. In scenarios with electricity prices lower than about 0.10 €/kWh, as could occur with on-site renewable electricity generation, hydrogen cost falls below 6.5 €/kgH2, leading to cost savings of up to 60-70% compared to a natural gas-based configuration. Finally, when total CO2 emissions (direct + indirect) are considered, hydrogen becomes environmentally beneficial if the electricity carbon intensity is below 123 gCO2/kWh.