Introducing carbon constraint in the steel sector: ULCOS scenarios and economic modeling

Abstract

Modeling activities and scenario building are at the heart of the economic analysis delivered by the ULCOS program. Two main objectives were followed in the framework of SP9. First the modeling team had to provide a set of coherent energy economic scenarios using POLES model. Second, the economic conditions for the emergence of the ULCOS technologies were analyzed. ULCOS contributes to the elaboration of contrasted scenarios that the steel industry could face in the long term. To aim at these objectives specific tools have been used: POLES model for the global energy system modeling and ISIM model for the steel sector based prospective (Hidalgo, 2003). The most promising steel production technologies identified in ULCOS Phase 1 have been introduced into ISIM as generic technologies. ISIM was then integrated as a module into POLES modeling system. The main model outputs are the energy prices and mixes and the steel sector balances with a focus on the technology mix. Actually the climate policy scenarios developed in project allow making recommendations to the steel industry in terms of sustainable development but also in terms of business strategy.