Volume 39: Energy Transitions toward Carbon Neutrality: Part II

Multi-Period Optimization of Hydrogen-Based Steelmaking System: A Rolling-Horizon Approach Kangling Sheng, Xiaojun Wang, Fangyuan Si1, Zhao Liu, Yizhi Zhang, Jinghan He

Abstract

Under the “Dual-Carbon” targets, hydrogen production powered by renewable energy and hydrogen direct reduction offer approaches to integrating a high proportion of renewable energy and catalyzing the steel industry’s transition towards a low-carbon footprint. The hydrogen-based steelmaking system (HBSS) presents a multi-energy interaction, encompassing processes from hydrogen production and ironmaking to the final steelmaking processes. Additionally, the high investment and operational expenses necessitate that decision-makers prioritize enhancing the system’s economic efficiency to ensure its long-term viability and effectiveness. In this study, we first introduced a multi-period optimization model for HBSS, aiming to reduce the levelized cost of steel (LCOS) from both the investment and operational aspects. Then, the rolling-horizon approach has been used to overcome computational infeasibility for large mixed-integer linear programming problems by solving the problem periodically, including additional information from proximately following periods. We further compared it with the single-period and forward-looking approaches, indicating that the optimal result of LCOS varied from $406 to $520 for the different approaches. It proves that the rolling-horizon approach can lead to an economics-better solution than the single-period approach and is only a few percent away from the forward-looking approach.

Keywords multi-period optimization, rolling-horizon approach, industrial decarbonization, hydrogen-based steelmaking, renewable energy resources, energy transition