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Changes In Steel Production Reduce Energy Intensity

Saturday, Jul 30, 2016

The manufacture of steel and related products is an energy-intensive process. In 2015, the steel industry accounted for 1.5% of all industrial shipments but 6.1% of industrial delivered energy consumption. In EIA’s Annual Energy Outlook 2016 (AEO2016) Reference case, energy use in the steel industry increases by 11% over 2015–40. Over the same period, the steel industry’s energy intensity falls by 27%, compared with an 18% reduction in total industrial energy intensity. Several alternative cases examine drivers for further energy intensity reductions in the steel industry.

Much of the change in energy intensity is attributed to the shift in steel production from primary to secondary (recycled) production. Primary production of steel typically uses a blast furnace to produce molten iron from iron ore, coking coal, and limestone. The molten iron is then converted into steel by a basic oxygen furnace. Secondary production of steel typically uses an electric arc furnace, with scrap providing the main input. In an electric arc furnace, scrap is melted using electricity. Natural gas can also supplement the melting process.

Overall energy intensity of an electric arc furnace is significantly lower than the energy intensity of a basic oxygen furnace. The shift from using the basic oxygen furnace to the electric arc furnace since the early 1990s has contributed to the substantial reduction in energy intensity in the U.S. steel industry. According to calculations based on the Manufacturing Energy Consumption Survey and the World Steel Yearbook, from 1991 to 2010, the share of U.S. steel production using electric arc furnaces increased from 38% to 61%, while the energy intensity of crude steel production decreased by 37%. In the Reference case, the electric arc furnace share of crude steel production increases to 69% by 2040, further decreasing energy intensity.

An Issues in Focus analysis in AEO2016 includes three alternative cases that model the effects of technology choice on energy intensity in the steel industry. Two alternative cases introduce incentives for demand-side efficiency: the Low Incentive and High Incentive cases, which use an assumed carbon fee to increase the price of energy inputs. Fuel prices are affected based on their carbon intensity. Compared to the Reference case, the price of metallurgical coal is 20% higher in the Low Incentive case and 56% higher in the High Incentive case by 2025. Natural gas, which is less carbon-intensive than coal, has lower price increases in 2025, at 10% and 38% higher in the Low and High Incentive cases, respectively, compared to the Reference case.

The Energy-Efficient Technology case assumes the adoption of more energy-efficient technologies over time than in the AEO2016 Reference case but no demand-side efficiency incentives. Existing technologies are retired sooner, and new technologies have shorter lifespans than in the AEO2016 Reference case, providing more opportunities for deployment of energy-efficient technologies.

Cumulative steel energy intensity declines are similar in the all cases except the Energy Efficient Technology case, where energy intensity declines 32% from 2015 to 2040. The low turnover rate of equipment, which typically lasts for decades, means that it takes years for a large increase in basic oxygen furnace or electric arc furnace capacity to occur.

As a result, the use of energy to produce steel will generally not respond quickly to price or innovations in technology. Although the relative use of basic oxygen furnace and electric arc furnaces is generally similar across cases, the Energy Efficient Technology case includes greater adoption of more efficient post-furnace processing technologies, which further reduces energy intensity. The Low and High Incentive cases initially result in relatively larger declines in energy intensity, but by 2040 the differences between these cases and the Reference case are smaller.

Steelmaking processes and technologies will continue to evolve in response to commodity prices for iron ore and scrap steel, investment in energy efficiency, product specification demand, environmental regulations, and fuel prices. Additional analysis of these factors is presented in the AEO2016 Issues in Focus.

 

Source : hellenicshippingnews.com

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