National labs team delivers techno-economic analyses of H2 DRI scenarios
In an accessible paper published in the Energy & Environmental Science journal by the RSC, researchers from Lawrence Berkeley National Laboratory, Argonne National Laboratory, and Pacific Northwest National Laboratory present their findings from a comprehensive techno-economic analysis of various design and operational scenarios involving hydrogen-based direct iron reduction (H2-DRI) systems. These systems are aimed at achieving the objective of producing steel in an environmentally sustainable manner.
Hydrogen-powered direct reduced iron (H2-DRI) represents a promising alternative for producing low-carbon steel. However, the absence of established processes and business models defining the concept of “green steel” poses a challenge in determining the competitive pricing of hydrogen (H2) required to compete with the prevailing state-of-the-art natural gas-based direct reduced iron (NG-DRI).
The primary focus of the study is on characterizing potential end uses for hydrogen in iron and steelmaking, with the goal of informing its integration with hydrogen generation and storage systems. Through a detailed techno-economic analysis supported by thorough process modeling, the study establishes the break-even levelized cost of hydrogen (LCOH) targets necessary for the steel industry’s decarbonization using H2-DRI. This is achieved through a comparison with the commercial NG-DRI process.
Importantly, the study distinguishes between economically viable H2 production and cost-effective H2-DRI operation, highlighting that these are interconnected yet distinct concerns. The study provides insights into the economic aspects of pure H2-DRI, examines the parameters influencing H2-DRI operation and their economic implications, and computes the break-even and target costs of hydrogen required for sustainable operational feasibility.
The study examined five distinct scenarios for NG-DRI and six scenarios for H2-DRI. Some key findings from the research include:
- The implementation of renewable hydrogen (H2) in integrated DRI steel mills for both heating and iron ore reduction can result in a significant reduction of direct CO2 emissions by up to 85%. However, this requires that the cost of procuring H2 remains at $1.63 per kilogram of H2 or lower.
- When H2 is exclusively utilized for the reduction of iron ore, achieving economic viability is feasible when the procurement cost of H2 is $1.70 per kilogram. This approach also leads to a substantial reduction of 76% in CO2 emissions at the facility site.
- By employing optimization strategies in the design of the systems, such as adjusting the excess ratio of H2 in the DRI top gas and pressurizing the recycle of H2, both performance and economic outcomes can be enhanced.
- Systems with lower excess ratios of H2 are particularly appealing due to their ability to reduce energy requirements for pre-heating and their potential for integration with specific devices if H2 is supplied at sufficiently high pressure.
- The potential utilization of electric arc furnace off-gas is found to be considerably more compatible with H2-DRI compared to natural gas-DRI. However, this synergy can result in an increase of up to 7¢ per kilogram in the break-even H2 procurement cost.