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H2FUTURE: decarbonising the steel industry with green hydrogen

Steel is fundamental in our current world and in a greener one. As highlighted by the International Energy Agency (IEA), the construction of homes, schools, hospitals, bridges, cars and trucks rely heavily on steel. Furthermore, steel will be a key ingredient for the energy transition, with solar panels, wind turbines, dams and electric vehicles all depending on it to varying degrees.

However, for steel to play a positive role in a sustainable future, a decarbonisation process must begin now. Indeed, the steel industry is among the three biggest producers of carbon dioxide. According to the IEA, the sector is currently responsible for about 8 per cent of global final energy demand and 7 per cent of energy sector CO2 emissions (including process emissions).

Decarbonising the steel industry is a huge challenge, but is a must for companies to avoid future risks: decarbonisation should be a top priority for them to remain economically competitive.

Several European steel producers are currently developing decarbonisation strategies and running pilot plants to assess different production technologies. Among these, consultant firm McKinsey finds those using green hydrogen as the most effective: the process replaces fossil fuels in the direct reduced iron (DRI) production stage with hydrogen produced with renewable energy. It represents a technically proven production method that enables nearly emission-free steel production. However, there are a variety of interdependent factors. For example, power supply, as green hydrogen-based steel creates a need for a significant capacity increase in electricity derived from renewables. Also, the future shift to hydrogen-based steel relies heavily on the broad availability of green hydrogen on an industrial scale. Finally, raw material changes are necessary.

In fact, as pointed out in the IEA’s report Iron and Steel Technology Roadmap published in October 2020, steel is one of the most highly recycled materials in use today: its production from scrap requires around one-eighth of the energy of that produced from iron ore, for example. However, scrap cannot fulfil the sector’s raw material input requirements alone because steel production today is higher than when the products that are currently being recycled were produced. This means that recycling alone cannot be relied upon to reduce emissions from the sector to the extent needed to meet climate goals. To meet global energy and climate goals, emissions from the steel industry must fall by at least 50 per cent by 2050, with continuing declines towards zero emissions being pursued thereafter. 

Austria’s electricity provider VERBUND has indeed recognised that the long-term challenge for the steel industry is to develop, upscale and implement so-called breakthrough technologies in order to reduce carbon dioxide emissions to the minimum level by replacing carbon with hydrogen. Not only a technical challenge but also an economic one.

H2FUTURE electrolyser. Picture ©voestalpine.

In this regard, VERBUND, together with the steel manufacturer voestalpine and Siemens have launched the project H2FUTURE for the generation of green hydrogen from electricity from renewable energy sources. Testing PEM (proton exchange membrane) electrolysis technology on an industrial scale (6 megawatts) and simulating rapid load changes in electricity generated from renewable energy sources and from electric arc furnace steelmaking (grid balancing ) are the key elements of this European flagship project, started in 2017.

“We are currently in the most interesting phase of the project, in the operation phase,” says Robert Paulnsteiner, the project coordinator. “With every hour running, we gain more and more experience and learn a lot about the system. We are impressed about the high efficiency and also the flexibility of the plant.”

He mentions that with 6 MW, the plant is still the largest in operation in Europe with this technology and also the largest at a steel plant.

“During the operation phase which started in March 2020 we were running five different pilot tests and currently the plant is in a quasi-commercial operation phase,” he tells CEENERGYNEWS. “The project is running till the end of 2021 and we already have plans for a continuation of this success story.”

Technically, in an electrolyser like the Siemens SILYZER, water is split into hydrogen and oxygen using electric current. PEM technology works using a proton-exchange membrane as the electrolyte. This membrane has a special property: it is permeable to protons but not to gases like hydrogen and oxygen. This means that in a PEM-based electrolyser the membrane acts as an electrolyte and as a separator to prevent the mixing of the gas products.

Robert Paulnsteiner.

“The plant is directly connected to the electrical grid,” explains Mr Paulnsteiner. “We want to use the high flexibility of the plant and produce hydrogen for the steel processes on the one hand and also provide ancillary services to the electrical grid. The electrolyser fulfils all necessary requirements and is prequalified for all types of balancing services (primary, secondary and tertiary). By guarantees of origin, the plant is supplied with electricity produced from Austrian hydropower plants.”

Indeed, to produce green hydrogen water is required, something that raises concerns about how to get so many water resources without harming the environment or affecting agriculture.

Mr Paulnsteiner is confident that the lack of water should not be an issue even for the high capacities planned in the future.

“Of course plants should not be built in areas with shortages in water supply,” he continues. “If you add preparation plants to the system you can also utilise low quality water or even saltwater.”

PEM technology is still relatively young, but it has enormous potential. The hydrogen obtained in this way is a valuable and versatile product for use in industry, for fuel cell mobility applications and for reconversion into electricity at a later time.

Of course, the order of magnitude is the biggest challenge as it is expensive and difficult to build electrolysers.

“Indeed we are currently running one of the largest plants with this technology and there were still some challenges to overtake until we came in the situation of today, the plant running in continuous operation,” Mr Paulnsteiner says. “Currently, there are many announcements of large scale electrolysers up 100 MW or even more. I believe in the technology, particularly in the one we implemented at Linz, however looking back at our experiences we have made so far there still will be some upscaling challenges to solve with these upcoming large scale units. As to the economics, the larger the plant, the more feasible its viability. But the biggest challenge is to produce all the electricity in a renewable way for all the electric energy needed in the future.”

H2FUTURE electrolyser. Picture ©voestalpine.

While one of the main challenges of renewables is their volatility, as the H2FUTURE project takes the electricity directly from the grid, volatility doesn’t represent an issue.

“In fact, like the steel industry many other industrial branches need a 24/7 supply of hydrogen in the future, so the volatility of the renewables has to be balanced in the grid with suitable storage systems, an additional challenge for the energy transition,” he underlines. “Direct connections of electrolysers to wind or solar parks will be suitable for a certain field of application, but not for large scale systems which should achieve a high level of operating hours.”

Moreover, the H2FUTURE project provides the background for developing scaling and replication scenarios not only for the steel industry but also for other hydrogen demanding industrial sectors.

“In addition to the steel industry, where hydrogen seems to be the only way to decarbonise, many other industries, as fertiliser, cement or glass, could benefit from this technology and find a way to decarbonise,” Mr Paulnsteiner points out. “Also for heavy-duty transport green hydrogen seems to be a possible way to substitute fossil fuels.”

Robert Paulnsteiner will be one of the speakers of the Green Hydrogen Forum to be held on 26-27 May. The forum will bring together industry leaders enabling accelerated adoption of green hydrogen, action to bring down CO2 emissions and will offer the ideal space for networking with industry players; senior managers, decision-makers, and practitioners operating in the industries and making the most of green hydrogen technologies.

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