P2G TECHNOLOGIES IN IRON ORE

PELLETIZING PROCESS

15.2.20165th Researcher’s Seminar

Mariana Carvalho, LUTEsa Vakkilainen, LUT

Agenda

• Rationale• Steel production• Markets• Technical implementation• General assumptions• Mass and energy balances• Profitability• Summary and conclusions• Next steps

Rationale• Iron and steel sector is the major

industrial CO2 source

• Uniform quality ores increase energy efficiency agglomeration processes

• Fines are a significant type of iron ore corresponding to ~70% of global demand1

Source: IEA/OECD 2009. Energy Technology Transitions for Industry. Available at

https://www.iea.org/publications/freepublications/publication/industry2009.pdf

1 CRU Group 2012. Available at: http://www.slideshare.net/informaoz/laura-brooks-25739095

Steel Production

Source: World Steel Association. Fact Sheet Energy use in the steel industry. Available at https://www.worldsteel.org/publications/fact-sheets/content/02/text_files/file0/document/fact_energy_2014.pdf

Markets• Global iron ore production: 3220 Mt in 20141

– ~20% of the global market for pellets2

– Varies by country e.g. in Brazil ~90% of the production are ore fines3

• Who and where– Top three countries: China, Australia and Brazil – Top three companies: Vale, Rio Tinto and BHP Billiton

• Future outlook: growth follows steel production, expected to grow 1.5 times by 20504

1 USGS 2015. Iron ore statistics and information. Available at: http://minerals.usgs.gov/minerals/pubs/commodity/iron_ore/mcs-2015-feore.pdf

2 Poveromo, JJ 2013. Raw Materials & Ironmaking Global Consulting. Available at: http://www.steeltimesint.com/contentimages/features/iron_ore_joe_web_res.pdf

3 DNPM 2014. Sumário Mineral. Available at: http://www.dnpm.gov.br/dnpm/sumarios/ferro-sumario-mineral-2014

4 World Steel Association 2015. World Steel in Figures. Available at https://www.worldsteel.org/dms/internetDocumentList/bookshop/2015/World-Steel-in-Figures-

2015/document/World%20Steel%20in%20Figures%202015.pdf

Technical Implementation• Traveling grate pelletizing process

Hydrogen from AEC to substitute NG

Flame temperature is the main parameter

Estimated emissions ~55 Mt CO2/year

globally

General Assumptions• Break even electricity price was calculated as function of operating time for

different scenarios

• FCR markets not considered

• Profit from heat not considered

General Assumptions• Plant production 5 Mt/year, 8000 h/year

• Fixed specific energy consumption:

– Pelletizing: 1.12 GJ/t pellet, 42% NG and 58% solid (coal + coke breeze)

• Electrolyser efficiency (LHV) 65% at 70 ºC

• Required hydrogen was calculated in order to maintain flame temperature

as for the original fuels

Material and Energy Balances:Pelletizing Travelling Grate

NG AR 4,90Temperature CO2 Emissions

kg/s kmol/s Nm3/s Nm3/min [K] 78,08 kg/GJfuel

Air 321,2 11,20 250,0 15 000 1 273 15,18 kg/sCH4 1,693 0,094 2,094 126 298 87,45 kg/tSolid 3,851 0,443 - - - 437 234 t/yearFlue gas 326,7 11,36 252,3 15 139 1 714TOTAL IN - - 252,1 15 126 1441 oC

194,44 MW

AR 5,18Temperature CO2 Emissions

kg/s kmol/s Nm3/s Nm3/min Vol. Diff. [%] [K] 54,65 kg/GJfuel

Air 321,2 11,20 250,0 15 000 0,00 % 1 273 10,63 kg/s

H2 0,700 0,35 7,80 468 272 % 298 61,21 kg/tSolid 3,851 0,44 - - - - 306 049 t/year -30,0 %Flue gas 325,7 11,43 253,3 15 195 0,37 % 1 714TOTAL IN - - 257,8 15 468 2,26 % 1441 oC

196,79 MW 1,2 % 129 MW

Gas consumption 84,0 MW 2,8 % 1028 GWh/year

PhaseMass Balance

Hydrogen

Electricity demand

PhaseMass Balance

CAPEX, OPEX and Incomes • 20 years lifetime

• Oxygen not utlized in process

• Total O&M 2.4%, water 0.4 €/m3

• Different scenarios were considered varying:

– WACC: 8 – 12%

– Electrolyzer investment cost: 621 – 1165 €/kWe

– Oxygen selling price: 0, 20 – 70 €/t

– Natural gas purchase price: 35 – 50 €/MWh

– CO2: 0 – 10 €/t

Profitability 1/3

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Investment Cost

IC -20% Base IC +20% IC +50%

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Oxygen Price

O2 70 Base O2 20 O2 0

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Natural Gas

NG 50 Base NG 35

Base Case:IC = 717.12 €/KWeO2 = 50 €/tNG = 40 €/MWhWACC = 10% aCO2 = 5 €/t

Profitability 2/3

Base Case:IC = 717.12 €/KWeO2 = 50 €/tNG = 40 €/MWhWACC = 10% aCO2 = 5 €/t

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WACC

WACC 8% Base WACC 12%

CO2 and WACC does not seem to have much

impact

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CO2

CO2 10 Base CO2 0

Profitability 3/3

Optimistic:IC = 621.36 €/KWeO2 = 70 €/tNG = 50 €/MWhWACC = 8% aCO2 = 10 €/t

Base Case:IC = 717.12 €/KWeO2 = 50 €/tNG = 40 €/MWhWACC = 10% aCO2 = 5 €/t

Pessimistic:IC = 1165.05 €/KWeO2 = 0 €/tNG = 35 €/MWhWACC = 12% aCO2 = 0 €/t

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Scenarios

Optimistic Base Pessimistic 2010 Prices Cumulative average price

Summary and Conclusions

• Agglomeration process are relevant for the Iron & Steel industry

• Use of hydrogen can be feasible:

– Investment costs is the main parameter

– Followed by electricity price

– NG price also play a important role

• Expected substantial CO2 emission reduction

– 30% CO2 emission reduction expected for pellet kilns

– But only 6% expected for sintering

– Evaluate possibility to increase gas share in sintering kilns

Next steps

• Hydrogen effects in the grate

• Use of oxygen to increase productivity

• Integration to steel mill

THANK YOU FOR YOUR ATTENTION!