Energy, energy supply
Energy is one of the most important raw material inputs for the iron and steel industry. This industry, one of the energy-intensive industries, accounts for about 15 per cent of Swedish industry’s total energy consumption i.e. around 25 TWh annually.
High-value energy carriers necessary
From the energy viewpoint, the iron ore-based steel plants play a clearly dominant role - if the coal and coke required for the reduction process are included in the energy balance.
Many of the steel industry’s processes are energy-intensive and take place at a working temperature that frequently exceeds 1,000°C, e.g. smelting, heating and heat treatment. This means that for production purposes the steel plants require access to high-value energy carriers such as coal and oil products as well as electric power. There are no possibilities of using low-value fuels such as biofuels for both energy and combustion reasons. One reason is that the combustion takes place in the same space as the material, e.g. in a heat-treatment furnace. The atmosphere in the furnace may affect the surface of the steel which makes demands on the fuel itself. There exists technology for replacing oil and gas with electric power but the capital and operating costs are normally higher when using electricity than when using oil or gas.
The steel industry’s use of oil, gas and electricity was relatively stable over the last ten years. Gas (LPG and natural gas) has risen slightly whereas the use of oil has declined. The use of electric power also shows an increase. The variations where process coal is concerned, on the other hand, follow the variations in ore-based production.
Read more: Energy statistics
Important questions and standpoints
Electricity
Secure access to electricity at competitive prices is an important factor for the steel industry’s development. This is not self-evident in Sweden. Developments in the energy and climate areas mean that electricity prices are increasing over the long term and the steel industry’s competitiveness is declining.
The politically sanctioned distortions and deadlocks in the electricity market must be ironed out so that the steel industry obtains a competitive electricity price. Newly installed carbon dioxide-free power generation is one way. Every increase in the electricity price by 1 öre [100 öre = SEK 1] means about SEK 45 million in increased costs for the steel sector and for individual companies this price increase can be damaging. Emissions trading has so far affected the electricity price by 10–20 öre per KWh despite the fact that Swedish electricity is practically free of carbon dioxide.
- Trading in emission rights for carbon dioxide must not affect the price of carbon dioxide-free electricity.
- Decision on replacement of existing nuclear power when it has come to end of its economic life span must be taken very soon in order to retain the level of the Swedish base load power also after 2025.
Residual energy recovery
The use of residual energy recovery is an area where development opportunities exist. Already during 2007, the steel industry used 2.8 TWh of such energy for electrical production and external district heating. In addition, process gases equivalent to 4.6 TWh were used internally in different processes.
- A future third-party access to the district heating network would facilitate a further expansion of heat recovery.
- If electricity that is produced from residual energy recovery were entitled to an electricity certificate, this would lead to improved profitability for investments in such electricity production, e.g. when there is no market for heat production.
Taxes and charges
Taxes and emission trading are used as steering instruments to enhance energy efficiency and minimise carbon dioxide emissions. The steel industry competes in an international market and ∼ in order to succeed ∼ the preconditions in terms of economic instruments must be as alike as possible for all those companies that compete.
- Taxes and charges on the steel industry must take account of the companies’ competitive position.
- There must be one steering instrument for each purpose.
- Programme for Energy Efficiency (PFE)
Research
The steel industry is one of the energy-intensive industries but also an energy-efficient industry since the energy is an important and costly raw material that is used economically. The Swedish steel industry is at the leading edge in the use of the best available process technology. This applies e.g. to use of modern combustion technology and advanced measurement and control technology for reduced fuel consumption. Intensive research is being carried out into new methods and processes to cut energy consumption. Just at present, for example, projects are under way that aim to cut the use of coke in blast furnaces as well as projects concerning the improvement of continuous casting technology so that more (and more advanced) steel grades can be produced through continuous casting.
Education and information exchange
Even if the level of energy utilisation is frequently determined by the processes and production equipment, major savings can, nevertheless, be achieved through education and information.
"Energy competence" is the name of a programme for energy efficiency that was carried out 2006-2007 within the mining and steel industry. Jernkontoret ran the project with support from the Swedish Energy Agency and industrial companies.
This programme included
- Education to stimulate motivation and participation of employees in the mining and steel industry
- A web-based network for energy efficiency, www.enetsteel.se
- Jernkontoret’s energy handbook, www.energihandbok.se
Contacts
Helén Axelsson
tel +46 8 679 17 39
mobile +46 70 370 92 31
helen.axelsson@jernkontoret.se
Alena Nordqvist
tel +46 8 679 17 12
mobile +46 70 679 06 04
