Abstract
High electricity cost is the biggest challenge faced by the steel industry in transitioning to hydrogen based steelmaking. A steel plant in Norway could have access to cheap, emission free electricity, high-quality iron ore, skilled manpower, and the European market. An open-source model for conducting techno-economic assessment of a hydrogen based steel manufacturing plant, operating in Norway has been developed in this work. Levelized cost of production (LCOP) for two plant configurations; one procuring electricity at a fixed price, and the other procuring electricity from the day-ahead electricity markets, with different electrolyzer capacity were analyzed. LCOP varied from $622/tls to $722/tls for the different plant configurations. Procuring electricity from the day-ahead electricity markets could reduce the LCOP by 15%. Increasing the electrolyzer capacity reduced the operational costs, but increased the capital investments, reducing the overall advantage. Sensitivity analysis revealed that electricity price and iron ore price are the major contributors to uncertainty for configurations with fixed electricity prices. For configurations with higher electrolyzer capacity, changes in the iron ore price and parameters related to capital investment were found to affect the LCOP significantly.
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