ee07-diffusion of energy efficient technologies and co2 emission reductions in iron and steel sector

1、Energy Economics 29 (2007) 868 888/locate/enecoDiffusion of energy efficient technologies and CO2 emission reductions in iron and steel sectorJunichiro Oda , Keigo Akimoto, Fuminori Sano, Toshimasa TomodaSystems Analysis Group, Research Institute of Innovative Technology for the Eart

2、h (RITE), 92 Kizugawadai, Kizu-cho, Soraku-gun, Kyoto 6190292, JapanReceived 15 July 2006; received in revised form 21 December 2006; accepted 6 January 2007Available online 22 February 2007AbstractsThis paper evaluates CO2 emission reduction potentials and the minimum cost of technological options

3、in the iron and steel sector by regions across the world. Based on an intensive and in-depth survey of current steel producing facilities and energy efficient technologies, we modified a global energy systems model, which we call DNE21+; technologies in the steel sector are explicitly modeled as wel

4、l as those in the energy supply sector. Two types of targets are studied; the top-down type (550 ppmv stabilization) and the bottom-up type (energy efficiency targets in the steel sector). Their cost-effective technological responses are obtained, and the emissions reduction effects are evaluated fo

5、r the bottom-up targets. 2007 Elsevier B.V. All rights reserved.JEL classification: P28; Q41; Q48; L61Keywords: Global warming mitigation; Iron and steel sector; Energy systems model; Energy saving; Energy efficient technology1. IntroductionTheKyotoProtocolcameintoeffectonFebruary16,2005,andtheinter

6、nationalofficialdiscussion on the post-Kyoto regimes began in 2005. In addition to the frameworks under the UNFCCC for global warming mitigation, e.g., the Kyoto Protocol and the post-Kyoto regimes, regional and action- oriented cooperation is also being explored for energy efficiency improvement an

7、d CO2 emission reductions. For example, AsiaPacific Partnership of Clean Development and Climate (APP), which was established by Australia, China, India, Japan, Republic of Korea, and the United States in January Corresponding author. Tel.: +81 774 75 2304; fax: +81 774 75 2317.E-mail address: jun-o

8、darite.or.jp (J. Oda).0140-9883/$ - see front matter 2007 Elsevier B.V. All rights reserved. doi:10.1016/j.eneco.2007.01.003J. Oda et al. / Energy Economics 29 (2007) 8688888692006, aims to address increased energy needs and associated challenges, including air pollution, energy security, and climat

9、e change, by promoting the development, deployment, and transfer of cleaner and more efficient technologies. It has established eight publicprivate task forces including the iron and steel sector. Meanwhile, the ChinaEU partnership on climate change including cooperation for clean energy development

10、s was established in September 2005. Although various types of frameworks for CO2 emission reductions have been developed, technological development, transfer,and diffusionare importantfor any framework.TheG8 GleneaglesSummitalso adoptedan action plan with respect to climate change that has a simila

11、r framework.The demand for steel has rapidly increased in the countries that have been in a primary stage of rapid economic growth, e.g., Japan in the 1960s. Currently, China has reached this stage, and India, along with their economic growth, is also expected to reach this stage in the near future.

12、 Globalsteel productions have maintained an upward trend forthe last fiveyears andhave reached a value of 1058 million tons of crude steel in 2004 (IISI, 2005). The steel sector is one of the most energy intensive end-use sectors and emits around 590 Mt-C accounting for 5.2% of the global anthropoge

13、nic GHG emissions in 2004 (OECD, 2005).Under these circumstances, the assessments of the technological options for CO2 emission reductions not only in the energy supply sectors but also in the energy intensive end-use sectors, particularly in the steel production sector, are important to show ways f

14、or achieving the Kyoto target, for providing useful information for constructing the post-Kyoto regimes, and also for action-oriented cooperation such as the APP and the G8 action plan. As cost-effective CO2 emission reduction measures are inevitably different across regions, the assessments should

15、pay attention toregional differences in energy systems, energy consumption growth, current status of energy consumption, technology in the end-use sector, etc.We had developed a global energy systems model, which we called DNE21+, in order to evaluate the cost-effective technological options of the

16、supply side, including carbon capture and storage (CCS) taking into consideration regional differences (Akimoto et al., 2004a). The model disaggregates the entire world into 77 regions, and covers a time range up to 2050. The model minimizes the cumulative discounted present value of the world energ

17、y systems costs and seeks the cost-effective trajectory of global energy systems. Although the DNE21+ treated the energy supply systems in a bottom-up fashion, the model treated the end-use sectors in a top- down fashion using long-term price elasticities for four types of secondary energy carriers:

18、 solid fuel, liquid fuel, gaseous fuel, and electricity. Due to the above ways of modeling, the DNE21+ was not able to evaluate the technological options of energy saving and CO2 emission reductions in the end-use sectors. However, the previous study with the DNE21+ indicated that the energy savings

19、 in the end-use sectors play an important role particularly in the near future, while improvements and reconstructions of energy supply systems including the CCS are inevitable for the long-term stabilization of atmospheric CO2 concentration. Thus, it is of great importance to evaluate mitigation op

20、portunities in the end-use sectors, and should be done so in consistence with the energy supply sectors because these sectors are interlinked and not independent of each other.Somestudiesontheevaluationsoftechnologiesintheend-usesectorsareavailable(e.g.,Kainumaet al., 2003; Gielen and Moriguchi, 200

21、2; Hidalgo et al., 2005). These evaluations are restricted in some points as described below. The AIM/Enduse model analyzes a number of energy efficient technologies of end-use sectors for some Asian countries. However, the model treats endogenously onlytheend-usesectors(Kainumaetal.,2003).Gielenand

22、Moriguchi(2002)evaluatedCO2emission reduction potentials in the Japanese iron and steel industry up to 2040 with a linear programming model. Hidalgo et al. (2005) evaluated the technological options in the iron and steel industry with a870J. Oda et al. / Energy Economics 29 (2007) 868888global model

23、 ISIM (the Iron and Steel Industry Model). However, these studies do not evaluate the emission reductions in consistence with the energy supply sectors.In this paper we address the following issues: (1) the cost-effective technology mix by region for (A) the reference case (no-climate change policy)

24、, (B) the case of atmospheric CO2 concentration stabilization at 550 ppmv, and (C) the case of energy efficiency target in the steel sector. (2) the CO2 emission reduction potentials for the cases (B) and (C). For the above purpose, we first conducted asurvey of the energy efficiency, costs, and ins

25、tallation vintages of the facilities inthesteelsectorbyregion, andweassumedglobalandregionalfuturesteelproductionscenarios based on their historical trend data, etc. Based on the survey and assumed data, the DNE21+ was modified so that the technological optionsin the steel sector as well as in the e

26、nergy supply sectors can be treated endogenously. The evaluation time span is only up to 2030 because the perspective oftechnological changes overlonger periodsbecomes less certain even in the iron and steel sector. The analysis using the modified DNE21+ has some advantages compared to other analyse

27、s described above. (1) This analysis results are consistent across global regions and between the energy supply sectors and end-use sectors. (2) The trajectory of technological changes shall be a practical one because the vintages and lifetimes of the facilities are taken into account and the techno

28、logicalreplacement is allowed only at the expense of depreciated cost of the facility to be replaced.The disadvantages are: (1) this study does not treat changes in industrial structure and industry relocation endogenously, because the regional scenarios of steel productions are provided exogenously

29、. (2) This study neglects short-term fluctuations of fuel prices because of the mid- term analysis up to 2030. (3) This study does not treat such drastic options as the carbon capture from BOF steelmaking process, because we do not expect their introduction of a significant amount before 2030 althou

30、gh their substantial use may be expected in the longer time span.2. Energy efficiency and technological options in iron and steel sectorBasically two major process routes have been used for crude steel production in the last three decades. One route is to reduce iron ore to pig iron with coke in bla

31、st furnaces, and then convert it into crude steel in basic oxygen furnaces (BOF steelmaking process). The other route is to smelt scrap iron in an electric arc furnace (EAF steelmaking process). The first route needs the heat of iron ore reduction at least, i.e., theoretically 7.37 GJ/ton of pig iro

32、n, and actual energy consumption in the processes from coke making to hot rolling can vary between 20 and 50 GJ/ton of BOF steel including electric power consumption (e.g., Worrell et al., 1997). The second route actually consumes 400 to 750 kWh/ton of EAF steel (e.g., Worrell et al., 1999). In addi

33、tion to the above two major routes, a direct reduction ironmaking route is also commercially available.Many technological options exist for net energy saving and/or net CO2 emissions reduction: exhaust heat recovery, process gas recovery, and non-fossil fuel use. The energy saving effects of the tec

34、hnological options are not uniquely determined but dependent on the process parameters, facility capacity, etc. Take top-pressure recovery turbine (TRT), which is an energy saving technology originally developed in the former Soviet Union, for instance. TRT generates electricity using pressurized ga

35、ses from the blast furnace. The theoretical electric output of the TRT L (kW) is estimated by the following equation (Kawasaki Steel Corporation/NEDO, 2000).(k1)kL 1 d gd Qd C dT d 1P2 P11p1860J. Oda et al. / Energy Economics 29 (2007) 868888871where is the efficiency of the gas turbine and generato

36、r; Q (Nm3/h), the gas flow at the inlet of the turbine; Cp (kcal/kgK), the specific heat of the gas; T1 (K), the temperature at the inlet of the turbine; P1 and P2 (kg/cm2), the gas pressures at the inlet and outlet of the turbine, respectively; and k, the adiabatic exponent of the gas (= 1.36). The

37、 electricity generation per ton of pig iron of theTRTis non-linearlyrelated to the pressure of theblast furnace as represented in Eq.(1), and the pressure depends on the volume of the blast furnace and the mode of high-pressure operation of the blast furnace. A typical modern TRT of the dry type gen

38、erates 55 kWh/ton of pig iron in the case of the high-pressure operation of the blast furnace (Japan Consulting Institute/NEDO, 2001), whereas a TRT of the wet type generates less power, e.g., 30 kWh/ton of pig iron (Worrell et al., 1999).Coke dry quenchinQ) recovers the sensible heat of red-hot cok

39、e using inactive gas in adry process. A typical modern CDQ generates 150 kWh/ton of coke and brings several co- benefits such as minimizing water consumption and enhancing coke quality. The coke quality improvement enhances the productivity and reduces the coke ratio of the blast furnace (Japan Cons

40、ulting Institute/NEDO, 2001; Nippon Steel Corporation/NEDO, 2002).The coke ratio have been declining with the diffusion of pulverized coal injection (PCI). PCI improves the net energy efficiency. However, the effect depends on the energy efficiency of coke oven and characteristics of resources (e.g.

41、, Worrell et al., 1999). An oxygen enrichment, over- pressure and temperature raise of the blast can also reduce the coke ratio (Danils, 2002). Cold iron sources, i.e., scrap and direct reduced iron (DRI), can be practically used up to 35% in basic oxygen furnaces (BOFs).The recovery of by-product g

42、ases, i.e., coke oven gas (COG), blast furnace gas (BFG), and oxygen furnace gas (LDG), and their sensible heat recovery are also the key factors for the net energy efficiency improvements of the BOF steelmaking process. The LDG is generated in a batch process, and therefore, high-level control syst

43、ems are particularly required for the recovery and effective utilization of LDG and its sensible heat (Japan Consulting Institute/NEDO, 2001). In addition to currently available technologies described by Worrell et al. (1999) and Japan Consulting Institute/NEDO (2001), we surveyed future technologie

44、s; a next-generation coke oven technology such as SCOPE21 (Super Coke Oven for Productivity and Environmental enhancement toward the 21st century) has been developed and is now being demonstrated in Japan.Thepurpose of SCOPE21 is not onlyenergysaving or costreduction butalsoincreasing the input rati

45、o of noncaking coal from 20% to 50% (NEDO and Center for Coal Utilization, Japan, 2004). From the long-term point of view, many technological options are proposed for expanding the potentials of CO2 emission reductions, e.g., Corex, Finex, Cyclone Converter Furnace, DIOS, AISI, HISmelt, Fastmet, Fas

46、tmelt, Circofer, Circored, and CCS in the steel sector (Danils, 2002;Rynikiewicz, 2005).3. The model3.1. Framework of the global energy systems model DNE21+The DNE21+ model divides the world into 77 regions; the countries of interest are treated as independent regions, and countries with large areas

47、 such as the US, Canada, Australia, China, India, Brazil, and Russia are further disaggregated into 38 regions to consider the transportation costs of energy and CO2 in more detail. In order to evaluate the technological options including end-use sectors, the time span of the model analysis is limit

48、ed only until 2030 in this study, and the time interval is 5 years. The total global cost of energy systems is minimized over the time period from 2000 to 2030.872J. Oda et al. / Energy Economics 29 (2007) 8688883.2. Energy supply, CCS, and end-use sectors other than steel sectorsEight types of prim

49、ary energy sources are explicitly modeled: natural gas, oil, coal, biomass, hydro and geothermal, photovoltaics, wind, and nuclear. The prices of fossil fuel in this study are assumed based on an average wellhead price in the past ten years (19962005) and AEO projections (DOE/EIA, 2006).As technolog

50、ical options, various types of energy-conversion technologies are explicitly modeled in addition to electricity generation. The lifetimes of nuclear power and other facilities are assumed to be 40 and 30 years, respectively. These include oil refinery, natural gas liquefaction, coal gasification, wa

51、ter electrolysis, methanol synthesis, etc. The vintage of energy- conversion plants is taken into account. Five types of CCS technologies are also considered: 1) injection into oil wells for EOR operation, 2) storage in depleted natural gas wells, 3) injection into coal beds for ECBM operation, 4) s

52、torage in aquifers, and 5) storage in oceans. Each type of fossil fueled power technology has three assumed levels of energy efficiencies and three corresponding levels offacilities costs and the technological progresses are assumed exogenously for these power generation technologies and CCS technol

53、ogy.The end-use sector excluding the steel sector are disaggregated into four types of secondary energy carriers: 1) solid fuel, 2) liquid fuel, 3) gaseous fuel, and 4) electricity. The demands for these energy carriers are endogenously calculated in a top-down fashion using long-term price elastici

54、ties in other cases than the reference case. The demand for electricity is expressed by the load duration curves that are characterized by four types of time periods, and the relationship between the supply and demand of electricity is formulated for each of the four periods. The steel sector is ful

55、ly integrated into the DNE21+ model. This model explores the optimal point of the coal consumption and its cost to minimize the total costs of energy systems considering the interaction among coal consumptions in all the sectors.See Fujii and Yamaji (1998), Yamaji et al. (2000), Akimoto et al. (2004

56、a) and Akimoto et al. (2004b) for a detailed description of the energy supply and CCS technologies in the DNE21+ and DNE21.3.3. Iron and steel sectorThe technological options for energy savings and CO2 emission reductions in the steel sector were modeled based on the technological information as des

57、cribed in Section 2. In addition, the following information was utilized for the modeling: the data on the status of the current facility in Asian countries and the former Soviet Union (Kawasaki Steel Corporation/NEDO, 2000; Nippon Steel Corporation/NEDO, 2002; Kawatetsu Techno-Research Corporation,

58、 2002; Nippon Steel Corporation/NEDO, 1999), the installation share of energy efficient technologies of major steelmaking countries surveyed by Japan Iron and Steel Federation (2006), the status of the US iron and steel sector analyzed by Worrell et al. (1999), and the preceding modeling activities,

59、 e.g., Kainuma et al. (2003), Gielen and Moriguchi (2002), and Hidalgo et al. (2005). The outline of the model of the iron and steel sector is as follows:1. Nine types of steelmaking routes having different levels of energy efficiency are modeled. Those consist of four types of BOF steelmaking, three types of scrap-based EAF steelmaking and two types of DRI-based