Posts Tagged ‘Germany’

Salzgitter strip unit is 92% self-sufficient in electricity

Steelmakers may still be concerned about the cpotential costs of Europe’s Emissions Trading System. Although costs will likely be less than estimated by many (see below) the additional cost of power is still a worry. However, this does not change the fact that captive power supply should still cut costs. Power generators expect to be able to pass on thier costs from the ETS to customers in full. As such the additional cost to captive production should be equal to the additional cost of buying in power. Meanwhile, steelmakers with captive power will be able to choose how to allocate their allocated carbon credits, potentially making their additional costts lower.

 Platts SBB News – 1 June 2012 German steelmaker Salzgitter is around 60% self-sufficient in electricity across its strip steel plant in Salzgitter and its Peiner beams mill. The electricity generated at the strip mill site – by two in-house power plants – has an annual market value of around €150m, the company told Platts Steel Business Briefing.

The two 110 megawatt units were finished a few years ago and have since been optimised. Strip production in Salzgitter is now 92% self-sufficient, whereas the Peiner meltshop still relies 100% on external power suppliers.

Together, the Salzgitter stations produce roughly one terawatt of power per year, all of which is consumed on site, the company said. Self-supply creates an annual saving for the company of up to €25m, according to the firm’s spokesman.

However, changes to the European Union’s emissions trading scheme for carbon-dioxide from 2013 onwards could mean that Germany’s steel industry incurs extra costs totalling up to €485m/year, according to Salzgitter’s comments to the German press.

This action would add additional costs of between €17 and €37 per tonne of steel produced, according to Salzgitter’s ceo, Heinz Jörg Fuhrmann.

EU carbon compensation may meet 60% of steelmakers’ need

EAF steelmaking produces significant;y less carbon dioxide directly than integrated steelmaking. however, EAFs are far more vulnerable to increasing energy prices. EU compensation is necessary to maintain the competetiveness of the industry. For more information on how steelmakers, rollers and distributors can ensure their businesses are economically, as well as environmentally, sustainable, come to Steel Business Briefing’s third annual Green Steel Strategies conference in Berlin on 19-20 April.

SBB 22 December The European Commission (EC) released, on 21 December, its guidelines on state aid for industry to compensate industry, including EAF steelmakers, for higher electricity prices as a result of the Emissions Trading System (ETS). However, the provision could mean only 60% of steelmakers’ additional costs are met, Eurofer tells Steel Business Briefing

Elements of the document are unjustified, agrees Ian Rodgers, policy director of UK Steel. One key issue is that the document calls for a maximum of 85% of the theoretical additional costs to be compensated, falling to 80% in 2016-2018 and 75% in 2019-2020.

The EC argues that this is to incentivise less efficient facilities to invest in energy efficiency. However, UK Steel argues that this is unnecessary as the calculation of theoretical costs already includes a benchmark. This means that only the most efficient plants could possibly receive full compensation.

The theoretical costs are also calculated using production levels from 2005-2011. For much of this period Europe was in recession and production levels were abnormally low. This would mean lower levels of compensation for EAF plants, the associations complain. Furthermore, the EC can only give a maximum figure for compensation, meaning EU member states could actually give less than this in reality.

Eurofer hopes that EU member states will support its views and force a revision of the document by the end of the consultation period in January. Germany is likely to support amendments, SBB understands and UK Steel confirms it will ask the UK government to act.

Earliest industrialisation of Hisarna 2020: Tata Steel

SBB 14 November The earliest industrialisation of Hisarna, the smelting reduction technology being trialled at the IJmuiden steelworks, is 2020, Koen Meijer of Tata Steel told the recent German steel industry conference in Dusseldorf. Hisarna is a high risk/reward innovation, he said at the event attended by Steel Business Briefing.

On 18 April 2011 the process, which removes the need for coking and agglomeration, was piloted for the first time. After one failed start three successful attempts followed, and 60% of capacity was achieved for a short time, Meijer said.

The results of the pilot indicate that the process works as expected, though more operating hours are needed. Between December and February improvement proposals will be implemented and April-May next year will be the next campaign. Industrial scale demonstration will be carried out between 2014-2018, according to Meijer.

Hisarna is part of the Ultra-low CO2 Steelmaking (ULCOS) project, which aims to cut CO2 emissions by 50% per tonne of steel produced. Without carbon capture and storage technology Hisarna can cut emissions by 20%, whereas with CCS it can achieve a reduction of up to 80%.

It not only has environmental benefits, Meijer said. Costs associated with coking and agglomeration disappear through Hisarna and you can use iron ores not currently suitable for blast furnaces and non-coking coal.

Steel production accounts for 5% of manmade CO2 emissions globally, and consumption is expected to double by 2050. Further reductions in CO2 need breakthrough technologies, not just energy saving, Meijer said.

UK steelmakers face jump in energy costs

The way in which governments choose to price carbon is a sensitive issue. A global price would ensure that there is no damage to the competitiveness of any aprticular region. However, this can only happen through an international climate change treaty. In the mean time differing carbon pricing regimes will lead to differing costs. The UK’s decision to set a minimum price for carbon credits is likely to lead to higher costs for UK steelmakers relative to their European counterparts. Some of this extra cost is likely to be compensated.

SBB 3 August UK wholesale gas prices which influence power prices have risen strongly in recent months and, to a lesser extent, electricity costs also, Jeremy Nicholson, director of the Energy Intensive Users Group tells Steel Business Briefing. This is especially visible for those currently renewing annual contracts. “Although the wholesale gas price is quite competitive compared to continental Europe, it is at a premium to the US, which has a current oversupply,” he adds.

He continues: “From 2013, the carbon floor price will be introduced by the UK government in order to increase competition for renewable; anyone taking out two-year contracts now will see these increases priced in”. Compared to a year ago power costs have increased by 10-20%, depending on when deals were made, he adds.

He continues: “The current trading price of carbon is around €13-14/tonne of CO2 emitted; the carbon floor price will be around £16/t and in addition to raising the costs for coal/gas power generators and therefore steelmakers, this will not be able to be passed on as it is a UK-only tax, leaving a discrepancy with European counterparts, such as Germany which has an exemption”.

Previous government estimates say carbon factors have already added some 20% to costs compared to year ago. However a new analysis says these could reach 31-51% by 2020, which per year is a more optimistic estimate, Nicholson says. He adds, however, that this analysis could be an underestimate.

The current wholesale electricity price for industrial users is just over £50/MWh, with delivery and supply added it is around £70-75/MWh.

ArcelorMittal cuts CO2 intensity

Because carbon dioxide emissions are embedded steel production, emissions from the industry are likely to increase as steel demand and output grow. However, there is some room to improve the intensity of emissions through investments in technology.

SBB 11 May Carbon dioxide emissions from ArcelorMittal’s global operations were up by 35m tonnes to 199m t in 2010, Steel Business Briefing learns from the company’s annual corporate responsibility report. However, the intensity of CO2 emissions fell to 2.15 tonnes of CO2 per tonne of steel produced.

The increase in total emissions was largely because of a number of facilities restarting production last year. Total emissions are still under the 2008 figure of 224m t.

A number of investments across the company’s operations helped reduce the intensity of emissions below 2008’s level of 2.184 tonnes of CO2 per tonne of steel. The company spent $347m on environmental technology in 2010, the report says, up from $224m in 2009.

Investments included a new waste gas recovery plant at ArcelorMittal Ghent in Belgium which started in 2010 is intended to save 129,000 t of CO2 emissions annually. A similar plant is being built at ArcelorMittal Bremen in Germany, as previously reported.

Stainless mills could cut CO2 by up to 50%

Using scrap is a great idea, but is there enough high quality stainless scrap available?

SBB 6 May Carbon emissions from stainless steel production could be reduced by up to 50%, or by 37m tonnes/year in the medium term provided more high quality stainless steel scrap was used instead of primary raw materials. So says a study on behalf of German-Dutch raw materials trader Oryx Stainless by Germany’s Fraunhofer-Institute UMSICHT.

In addition, industry could achieve billions of dollars in savings through a reduced need for pollution credits, it says.

Currently, a global average of only 50% of stainless scrap is used in making new stainless steel – although the ratio is significantly higher in some regions (North America) and significantly lower in others (China), Steel Business Briefing notes.

Despite limited reserves of secondary raw materials worldwide, Roland Mauss of Oryx says that in the medium term this average level can be raised to 75% through “smart recycling”.

Secondary raw materials should be more intelligently utilised through modern processes such as blending, to produce a customised raw material comprising a wide variety of steel and stainless steel scrap. The volume of secondary raw materials used in stainless production can be increased two- to three-fold, Oryx says.

But to be able to deliver the right blend at the right time, accessible, open world trading markets are a must. Also, market transparency needs to be increased. “What we need is an electronic information platform for stainless steel scrap so that the globally operating suppliers and traders can interact even more efficiently,” Mauss says.

“Factor Five” outlines ways to cut steel’s energy intensity

SBB 20 April Factor Five, published by Earthscan in the UK, is a new book that aims to reduce the energy intensity of industrial production by 80%. It is a heavyweight publication, but its comments on steel are covered in around just 10 pages. Other chapters are devoted to reductions in related sectors, including building and transport, as well as possible legislative changes to accelerate moves to greater resource efficiency and a reduction in CO2 emissions.

The book’s focus is primarily on increasing the proportion of EAF steel; but as it accepts that insufficient scrap is likely to be available, it also advocates an increase in DRI production. Other proposals include direct strip casting, alternative fuels plus heat and power recovery. A clear comparison of energy use in the different steel production routes would have been helpful.

The book does not examine the possibility that the energy employed and CO2 generated from the production of certain steels would be less than those used/emitted in the lifetime of a particular application. A recent German study showed that cuts in emissions from using steels able to withstand high pressures and temperatures in power stations would significantly exceed the emissions resulting from production.

In order to back up its claim that energy use could be significantly reduced, Factor Five takes its statistics from many sources, some of which are now out of date. However, it forcefully argues that steel makers can and should reduce their energy use – from a baseline it claims stands at around 28GJ/t in 1995, to about 12GJ/t in the future.