Flexible industrial power-to-X production enabling large-scale wind power integration: A case study of future hydrogen direct reduction iron production in Finland

Abstract

Hydrogen Direct Reduction of Iron (HDRI) combined with renewable electricity is an attractive option for low-carbon steel production. In this paper, we present a novel and computationally efficient techno-economic power-to-x-plant optimization model which is then applied to an HDRI plant located in Finland. Plant dimensioning was carried out in several current and future power market and regulatory scenarios. We predict a production cost of 373 €/t for hot briquetted iron, and 351 €/t for a future scenario of 2025–2030. When the recently introduced EU rules for renewable fuels of non-biological origin are applied, the production costs increased by 30–46 €/t. The rules also have a significant increasing effect on the required hydrogen storage. The flexibility of the direct reduction shaft emerged as an important parameter affecting the required hydrogen storage as well as total production cost. The results of this paper hold significance for the optimal design of future low-carbon steel plants.