Cost Effectiveness Analysis of HYL and Midrex DRI Technologies for the Iron and Steel-Making Industry
Climate change and reducing carbon dioxide (CO2) emissions is an immense challenge for this world. Lowering CO2 emissions is essential to the goal of limiting the global average temperature increase to below 2oC from pre-industrial levels. Power generation, followed by transportation and industrial sectors are the three largest sources of CO2 in the United States. The energy-intensive iron and steel industry accounts for the largest industrial contributor of CO2. This paper focuses on the cost-effectiveness of installing new technology at an existing steel mill that uses blast furnace technology in an effort to reduce direct CO2 emissions.
The first section of this report describes the steel making process and related carbon dioxide emissions. It reviews the two primary methods in which steel is produced: blast furnace/basic oxygen furnace and the electric arc furnace, and lists the CO2 emissions per ton of steel from both methods.
The next section discusses two specific production technologies: Midrex and HYL. It relays how they reduce emissions relative to the current standard technology (blast furnace/basic oxygen furnace), and how they differ from one another.
The third section explains the cost analysis methodology used for data analysis. It also explains how the data was collected for the study, and assumptions that were made to complete the analysis. The objective of the report is to determine potential cost savings if Midrex or HYL technology is installed in lieu of the current business as usual (BAU) case of the blast furnace.
The following three sections present the results of the analysis based on three scenarios: business as usual, Midrex, and HYL. Using the cost analysis method, the costs of the blast furnace/basic oxygen furnace, Midrex, and HYL were calculated over a period of 25 years. The costs take into account capital expenses, operations & maintenance, and key energy inputs. Then the costing method was applied to the Midrex and HYL scenarios to determine which had the most cost savings potential over BAU. A sensitivity analysis was also included in each individual section. The results show that not only does the HYL/EAF combination yields the most cost savings over the business as usual scenario, but it also results in the most reduction of CO2.
The last section discusses the relevance of the results, specifically discussing why HYL technology has not been deployed in the past. Lastly, a recommendation is made to companies looking to install this technology to conduct a more detailed engineering analysis to determine the feasibility for their specific mills.
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