Energy as a key factor for an energy intensive company … · Energy as a key factor for an energy...
Transcript of Energy as a key factor for an energy intensive company … · Energy as a key factor for an energy...
Energy as a key factor
for an energy intensive company
Lutz Bandusch,
CEO of ArcelorMittal Hamburg GmbH
15. June 2012
15.06.2012 Confidential 1
Agenda
• ArcelorMittal Hamburg
• Resources as a key factor
• Energy efficiency
• Efficient production route
• Optimized process
• Impact for energy-intensive industry
• Conclusions and outlook
15.06.2012 Confidential 2
ArcelorMittal
• ArcelorMittal:
• World‘s biggest steel producer
• 61 plants worldwide
• 110 Mio. t/a production capacity
• approx. 263.000 employees
• Future: focus on mining activities
• Main shareholder: Lakshmi Mittal
• Production figures of steel:
• China: 600 Mio t/a
• Germany: 43 Mio t/a
• Europe: 145 Mio t/a
15.06.2012 Confidential 3
ArcelorMittal Hamburg
• 573 Employees
• Founded in 1970 for production of Mesh and Rebar
simple steel grades
• Today: Production of High Added Value steel grades
• Continuous Optimization concerning Quality and Energy
• Unique Feature in Europe: MIDREX plant
Iron ore pelltes
Scrap
DRI
MIDREX-
Plant
600.000 t/a
Electric Arc
Furnace
Ladle Furnace Continuous
Casting Machine
1.100.000 t/a
Billets Wire Rod
Rolling Mill
900.000 t/a
15.06.2012 Confidential 6
Required Resources
• For the annual production of approx. 1 Mio tons of steel
the following resources are needed:
• 800.000 t iron ore pellets
• 600.000 t scrap
• 1.000.000.000 kWhel = 1 TWhel (incl. Luftzerleger) (equal to electricity consumption of 250.000 households)
• 2.000.000.000 kWhth = 2 TWhth (equal to natural gas consumption of 150.000 households)
• Additioanal resource: Climate effected by CO2-release…
15.06.2012 Confidential 7
Cost Structure
• Approx. 79% of production costs for resources like
iron ore, scrap & alloys as well as energy
• Strong focus on efficiency since foundation of this plant
15.06.2012 Confidential 8
Resources as key factors • Resources are key factors for
economic situation of a
company / of an industrial sector.
• Access to resources like iron ore,
scrap and energy at world-market
prices is essentiell
Prices for iron ore and scrap are
dominated by demand from China
Energy prices are influenced by
local government and EU
Strong local influence on an essential resource with
prices way above world-market level!
15.06.2012 Confidential 10
Resource-Efficiency
• Resource-Efficiency can be optained by two methods
(Optimum: combination of both methods)
resource-efficiency
production route with
low resource demand optimized process
Example:
Patrol comsumtion of a 100 kW car engine
2000: 10 l / 100 km
2011: 7 l / 100 km
Example:
Car engine running with patrol or gas
Mitsubishi Colt 1.1: 135 g/km
Mitsubishi Colt 1.1 LPG: 116 g/km
1 2
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Example: production of welding wire • Standard production via blast furnace route:
• Coke as the reduction agent
• Iron ore as the main raw material
• Due to process restriction only limited
usage of scrap possible
Little utilisation of recyclability of steel / scrap
• approx 1.800 kg CO2 per ton of steel (mainly due to coke)
• Demand of 1.780 kg iron ore per ton of steel
15.06.2012 Confidential 12
Example: production of welding wire
• Production route at ArcelorMittal Hamburg
• Usage of natural gas a reduction
agent instead of coke
much lower CO2-emissions
• Iron ore and scrap as raw materials
utilization of recyclability of steel
• approx. 840 kg CO2 per ton of steel
(mainly due to electricity and gas)
• Demand of 400 kg scrap and
1.140 kg iron ore per ton of steel
15.06.2012 Confidential 13
Comparison of CO2-Emissions
• Production route with high rescoure-efficiency due to usage
of natural gas as reduction agent and scrap as recycled
raw material Advantage compared to blast furnace process
• Highest flexibility on charging material possible
100% iron ore based or 100% scrap based possible
Production route with
low resource demand
1
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Projects 2012 at ArcelorMittal Hamburg • Example for current energy-efficiency projects
• New de-dusting systems
• Optimization of coal injection
• Variable speed drives
• Control system for reheating furnace
• Temperatur control for cooling water
> 5.500 t CO2/a
Optimized process
2
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Resource-efficiency
• Significantly reduced CO2-emissions and low iron ore share
compared to production route via blast furnace due to
production route (1) and optimized process (2).
• Steady optimization and improvement of efficiency
Effect decreases continuously
Investments in other plants are more reasonable for
ArcelorMittal
• Further enhencement projects in concept phase:
• Usage of regenerative energy
• Usage of Hydrogen in the MIDREX plant possible
Economically not feasible today!
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Impact for the industry
• Strong increase in prices for iron ore and scrap due to
growth in China
• Scrap is nowadays a globally traded raw material and is
sold for world-market prices
No distortion of competition since goods are traded
worldwide
Additional costs can be transferred to customer
• Energy and CO2-emssions are becoming a significant threat
Distortion of competion by artifical increase of prices
Additional costs cannot be transferred to customer
Energy is the major drawback for energy-intensive
industry in Germany
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Impact for the industry • Example: Price increase of 1 Ct/kWhel
• Household with 4.000 kWhel/a
Additional costs of: 40 €/a
• ArcelorMittal Hamburg with 1.000.000.000 kWhel/a
Additional costs of: 10.000.000 €/a
EBITDA pre-crisis years: 20.000.000 €/a
• Costs of „Energiewende“ are hard to predict
Calculation from the „Deutsche Energie Agentur (dena)“
in the range of 5 Ct/kWhel...
Significant threat for company (2.5 times the EBITDA!)
Very high uncertainty for investments
Politics to decide, whether steel stays in Germany or not…
15.06.2012 Confidential 19
Impact for the industry
• Since many years, increase of resource-efficiency is
major topic for energy-intensive industries
huge results achieved in the past years
most efficient plants in Germany
• Already excellent values compared to plants in foreign
countries due to high cost pressure
• Additional costs due to energy cannot be compensated
by efficiency projects
• Further increase of efficiency (e.g. -20%), like demanded
by politics, are not reasonable
see ThyssenKrupp:
Shifting of production capacity to Brasil and USA
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Conclusions and Outlook
• ArcelorMittal Hamburg is a good example for energy
efficiency and a strong will to improve the processes
KnowHow from Germany
• Results of increased energy-efficiency cannot be transferred
into economic advantanges
Costs are increasing faster than efficiency
Efficiency can only deflate the cost increase
• „Energiewende“ and European Trading System can mark
a significant decision point for German industry
• Goal: Level Playing Field