WP1 High renewable energy system in Finland a Business Case Study in Steel Industries. 7h researchers seminar Amanda Björnberg (VTT)

Transcription

1 WP1 High renewable energy system in Finland a Business Case Study in Steel Industries 7h researchers seminar Amanda Björnberg (VTT)

2 Research questions 1. How do the 100% RE scenarios of 4 other EU countries compare to the Neo-Carbon Energy (NCE) scenario? 2. Does the application of the Robust Decision Making methodology offer us new insights on the risks of investing in NCE technologies in the steel industry already today?

3 Research methods Countries were chosen based on their geographical location, their energy policies and their EU membership The country comparison was performed as a literature review, examining one or more scenarios per country A suitable business case was picked out of a list of many cases in which the use of a NCE technology had been studied Factors affecting the choice: data availability, possibility for partner firm to participate given the timetable Three workshops were held to support the Robust Decision Making

4 Future energy system scenarios in 5 countries

5 Future energy system scenarios in 5 countries

6 Future energy system scenarios in 5 countries

7 Future energy system scenarios in 5 countries

8 Future energy system scenarios in 5 countries

9 Starting point in the studied countries All 5 countries are rich industrial countries where population growth is not strong All 5 countries have managed to decouple economic growth and energy consumption All are aiming at an emission reduction of % of emissions in 1990 by 2050

10 Country Sectors included Sector coupling PtX Bio CCS Finland All GHG em. Yes X - Sweden All GHG em. Within energy X Denmark All GHG em. Within energy X - Germany All GHG em. Yes X - UK Energy Within energy X -

11 Denmark: previous reports showed H 2 as energy carrier, now methanol or DME is proposed Germany: discusses option to use both H 2 and methanol (and methane and DME) due to energy efficiency and distribution reasons

12 Results of the comparison: All countries achieve zero emissions from the energy sector The measures for doing that are actually very similar The technical difficulties prevail in the industry and transport sectors, and in agriculture. So called Neocarbonisation is proposed as alleviation in the transport and industry sectors

13 BUSINESS CASE STUDY IN STEEL INDUSTRIES

14 The Business Case was selected from a range of NCE Business Case studies Business case Sector Application Biomass CHP PtX integration Energy Steam and process heat utilised as DH, O 2 increases production in peak hours. PtX + sugarcane bio refinery Energy Increases biomass availability by utilising sugarcane carbon content for synthetic fuel. SSAB steel mill Industry Oxygen is used in steel production and CO is used for synthetisation of fuels. PtX in the cement industry Industry H 2 substitutes part of the coal as energy source PtG +wastewater treatment Waste management Oxygen, ozone, heat and MeOH used on site, electricity from solar or wind Fertilisers from air and water Agriculture H 2 from electrolysis, N 2 from air Researchers Eemeli Tsupari, Janne Kärki, Kristin Onarheim have worked on business cases in relation to NCE

15 SSAB Raahe Steel mill case The factory produces hot rolled coils and plates There is an on-site coking facility Very well integrated factory CO 2 -emissions are approximately 4Mt/year (2015) In international comparison emissions are on an OK level SSAB wants to be a frontrunner in steel production last April they started a joint project with Vattenfall with the goal of developing emission free steel production.

16 Available strategies for reducing CO 2 - emissions 1. Post combustion CCS with advanced solvent 2. Oxygen Blast Furnace (OBF) 3. Oxygen Blast Furnace with CCS 4. Increased PCI and GTCC 5. Increased PCI and GTCC with CCS (Selexol solvent) 6. Increased PCI and GTCC with CCS (MEA solvent) 7. Bio coke use 8. Power-to-Methanol

17 Division: Furnace and Add On Processes involving a new furnace Processes that can be added on BF+ BF+ CCS BF+ MEA OBF OBF CCS BF+BioCoke PC CCS Power-to-methanol BioCoke

18 Post-combustion capture Conventional amine-based PCC COWPER STOVES CO 2 Focus on largest CO 2 sources; power plant and hot stoves flue gases totally 2.9 Mt/a (50-75% of total site emissions) POWER PLANT Evaluations for two different solvents: Selexol and MEA PROCESS GAS CAPTURE PLANT

19 Replacing PCI with torrefied Concept of slow pyrolysis of biomass Good opportunities for integration to BF Assuming that PCI is replaced with charcoal on a 1:1 MWh - ratio Affects only CO 2 emissions and costs of fuel import biomass

20 Power-to-methanol Process gases including H 2 and CO Coke oven gas & converter gas (also blast furnace gas, if upgraded) Electrolysis H 2 Synthesis SNG / methanol / gasoline / ethanol O 2 utilisation in BOF need for high purity O 2 O 2 consumed also in BF Steam to mill s steam network

21 RDM, Robust Decision Making Robust Decision Iterative Interactive Data mining

22 Normally, we do this: 1. 2.

23 Risks with that:

24 RDM turns the traditional process upside down

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26 Database: Success of all the different strategies in all the different futures.

27 The RDM process

28 Defining the problem Uncertain factors Performance indicators: x, y, z Model Available strategies

29 Defining the problem Performance indicators: x, y, z Costs (Emission mitigation) Factors that are not varied: WACC: 8% Economic timeframe: 20 years Uncertain factors: Price of electricity Price of CO 2 allowances Price of PCI coal Price of bio coke Price of coke Price of oxygen Price of carbon neutral fuel Price of LNG Price of CO 2 transport and storage Exact investment amount % (technology reliability)

30 Ranges for the uncertain factors

31 RDM analysis for add on processes

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34 Yearly costs differ because the investments differ greatly in size

35 Profitability of the three strategies:

36 Regret, i.e. alternative cost Regret Strategy: j Future: f Cost: C(j,f)

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38 Regret of the Add On processes

39 What makes PC CCS and Bio Coke fail?

40 Regret in different futures

41 What the RDM analysis tells us The PC CCS strategy seems to be a very robust choice The only time it fails badly is when emission allowance prices are low, bio coke is cheap and PCI coal is on the expensive side simultaneously. When the future looks like that, the bio coke scenario fares well. Could it be possible to hedge against those futures by combining these two strategies?

42 The RDM process

43 A combination of Bio Coke and Post combustion CCS: Scenario discovery

44 Regret with the new strategy

45 Why does the MeOH strategy fare so badly? A sensitivity analysis of the input data shows that if electricity price range is changed from /MWh to /MWh, carbon neutral fuel price is changed from /MWh to /MWh and oxygen price range is changed from /t to /t then the PtMeOH strategy reaches break-even

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47 Thank you! Questions?

48 NEO-CARBON Energy project is one of the Tekes strategy research openings and the project is carried out in cooperation with Technical Research Centre of Finland VTT Ltd, Lappeenranta University of Technology LUT and University of Turku, Finland Futures Research Centre.