Beyond grid dependency: Technical and economic case for new energy systems in green steel

Overview

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Through a systems-level approach we demonstrate how integrating onsite renewables with grid power can transform green steel production.

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Optimized hybrid energy systems offer a pathway to overcome the conflict between decarbonization goals and economic competitiveness.

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The findings highlight that system-level optimization and operational flexibility unlocks significant economic and environmental advantages.

Key findings

Cost Advantage

Semi-islanded energy systems achieve 12-15% lower levelized cost of steel (LCOS) at $781-811/ton compared to grid-only alternatives ($887-929/ton).
Emissions Reduction

These optimized hybrid systems can enable emissions reductions of 46-84% compared to conventional steelmaking routes.
Lifecycle Economics

While requiring 60-84% higher upfront investment than grid-only systems, semi-islanded configurations deliver superior lifecycle economics through operational cost reductions.
Preferred Storage

Hydrogen is consistently the preferred energy storage medium over batteries in most optimization scenarios due to its dual role as a process input and energy buffer.
Volatility Opportunity

Increased grid price volatility paradoxically lowers overall production costs for semi-islanded systems by enabling strategic purchase of cheap grid power.
Renewable Mix

Solar energy is the preferred renewable source in baseline scenarios, with wind power integration increasing strategically as grid electricity costs rise.