2.1. Integrated Steel Plant and Its Key Economic Indicator
In order to study and compare the economy of a TGR-OBF with that of a BF from the perspective of the whole steel plant, three integrated steel plants were defined based on the operation data of the Baosteel steel plant and the TGR-OBF model established in our previous research [
10]. The three ISPs were a C-ISP, an ISP-OBF, and an ISP-OBF-CCS. According to our previous research [
10], an ISP consists of the steel manufacturing system and the energy system, as shown in
Figure 1. For the three ISPs, the steel manufacturing system comprises coking, sintering, lime production, ironmaking (BF or TGR-OBF), steelmaking, and steel rolling processes. The purchased iron ore, pellets, coking coal, and coal are made into a hot rolled strip and metallurgical gas with the help of the energy system. In the analysis of a C-ISP, the Baosteel No. 2 blast furnace and its steel production process (located in Shanghai, China) were used as a reference case. We used the operating parameters of the BF and its steel production process in this study, as shown in
Figures S1 and S2 (Supplementary Materials). We studied the economy of an ISP-OBF or ISP-OBF-CCS by replacing the blast furnace of the C-ISP with a TGR-OBF. Therefore, we used the TGR-OBF process model developed in our previous research [
10] to calculate the operating parameters of a TGR-OBF for the same ore volume and fraction, the same hot metal production and composition, and the same production rate as the blast furnace. By combining the calculated TGR-OBF process model with the operation data of the Baosteel steel plant (without the BF process), the ISP-OBF or ISP-OBF-CCS were analyzed. The operating parameters of a TGR-OBF and its steel production process in this study are shown in
Figures S3 and S4 (Supplementary Materials).
The net present value (NPV) is the most commonly used indicator for evaluating investment projects. This is because it represents the value that the project will create for investors and also enables project prioritization in situations involving several investment options. Therefore, the NPV served as a key indicator for evaluating the economy of an ISP in this study. In the economic analysis of the three ISPs, the following assumptions were made in this study:
- 1.
According to Baosteel’s data [
20,
21], the lifetime of the blast furnace and its corresponding steelmaking process major units for the first overhaul are approximately fifteen years. Therefore, the annual cash flow of the three ISPs for a fifteen-year time span were calculated, and the annual net cash flow equation of an ISP is shown in Equation (1). Therefore, the NPV value in this study is the sum of the annual net cash flow of an ISP over fifteen years.
where (
CF)
t is the net cash flow after tax of the year
t,
n is assessment period (years), and
ic is the discount rate.
- 2.
In the ISP-OBF analytic system, most of the top gas produced by a TGR-OBF is recycled into a furnace as recycled gas after CO2 removal and preheating. Meanwhile, the removed CO2 is emitted into the environment.
- 3.
In the ISP-OBF-CCS analytic system, the removed CO
2 was captured, transported, and stored underground. The electricity consumption of the CO
2 removal and capture was 120.65 kWh·t-steel
−1. The cost of transport and storage is mentioned in
Section 2.2.
2.2. Main Influencing Factors and Their Levels
In order to identify the main economic influencing factors affecting an ISP to determine the scope of the NPV calculation, screening and assumptions about these factors were required. An ISP has many influencing factors. However, factors that have little influence on an ISP, such as personnel wages, water prices, scrap steel prices, electricity prices, etc., were predetermined according to the statistics of China’s steel industry [
22]. In addition, under the premise of fixed output, influencing factors such as personnel quotas, water consumption, maximum productive capacity, iron ore consumption, and various taxes were nearly unchanged. Therefore, combined with steel industry statistics and Baosteel’s production data [
20,
21,
23], parameters for the economic analysis of the ISP were identified in this study as shown in
Table 1.
However, the coal consumption, electricity consumption, CO
2 emissions, and emissions allowances of the three ISPs were different. Based on the Baosteel No. 2 blast furnace and its steel production process production data, the coal consumption, electricity consumption, CO
2 emissions, and emissions allowances of the C-ISP could be obtained. By combining the calculated TGR-OBF process model with the operation data of the Baosteel steel plant (without the BF process), the coal consumption, electricity consumption, and CO
2 emissions of the ISP-OBF and ISP-OBF-CCS could be obtained. The CO
2 emissions in this study were the net CO
2 emissions of the ISP; their calculation refers to our previous research [
10]. Then, the emissions allowances of the ISP-OBF and ISP-OBF-CCS could be calculated based on the CO
2 emissions [
24]. For the ISP-OBF-CCS, the cost of CO
2 transport and storage was set at CNY 68 ·tCO
2−1 based on the international average [
25]. The details are shown in
Table 2.
In addition, the cost composition of Chinese steel enterprises mainly included raw materials, energy and reducing agents, and construction investment costs. Among them, raw materials, energy and reducing agents, and construction investment costs accounted for 42.6%, 35.2%, and 14.2% of the total cost, respectively [
23]. Thus, the main influencing factors affecting the economy of an ISP include iron ore price, coking coal price, and construction investment costs. The carbon price also served as an important factor affecting the economy of an ISP. The Chinese steel industry was included as one of the key industries in the national carbon market in 2017, based on the requirements of the China Development and Reform Commission’s “Key Work on Effective Launch of the National Carbon Emissions Trading Market” [
22]. Almost all steel companies were included in the national carbon market, so the carbon price was also considered to be the main influencing factor.
Therefore, the iron ore price (Po), coking coal price (Pco), construction investment cost (Ic), carbon price (Pca), and hot rolled strip price (Ps) were used as the main influencing factors to carry out the economic assessment in this study.
In this study, raw materials and fuels were converted to iron ore and coking coal consumption because the raw materials and fuels for the three ISPs included pellets and pulverized coal in addition to iron ore and coking coal. In the three ISPs, raw material consumption mainly referred to iron ore and pellets, and fuel consumption referred to coking coal and pulverized coal. In order to reflect the impact of iron ore and coking coal price changes on the three ISPs and the economy, this study converted the consumed pellets into iron ore consumption according to the current price and also converted the consumed pulverized coal into coking coal consumption according to the current price. Hence, the total iron ore consumption and total coking coal consumption of the C-ISP were obtained. They were 2082.66 kg/t-steel and 576.03 kg/t-steel, respectively. The total iron ore consumption and total coking coal consumption of the ISP-OBF and ISP-OBF-CCS was 2082.66 kg/t-steel and 434.60 kg/t of steel, respectively. Detailed data are shown in
Tables S1 and S2 (Supplementary Materials).
Generally, the carbon price in the carbon market was a response to the average social cost of GHG emission reductions in a country or region. China’s carbon prices and abatement costs were not fully correlated, and the phenomena of high volatility, large differences, and discontinuous trading in the process of pilot carbon trading had emerged. Therefore, referring to the current carbon price trend in China [
26], the carbon price level was set at 1–200 CNY·t
−1 in this study. The construction investment of a C-ISP with a 5000 m
3 blast furnace project was generally around CNY 18.85 billion, according to the Baosteel blast furnace process project [
27]. However, the construction investment is influenced by changes in technology and market material (steel, cement, etc.) prices. Therefore, based on experience, the construction investment level of C-ISP was set at CNY 18–20 billion. For the ISP-OBF, the cost of retrofitting a blast furnace to a TGR-OBF was CNY 500 million, including the cost of furnace renovation, top gas recycling, and CO
2 capture retrofit and oxygen plant expansion [
28]. Therefore, the construction investment level of the ISP-OBF was set at CNY 18.5–20.5 billion. For the ISP-OBF-CCS, the cost of CCS is mentioned above; the construction investment of the ISP-OBF-CCS was the same as the ISP-OBF, and its level was CNY 18.5–20.5 billion. At the same time, we assumed the iron ore price level, coking coal price level, and hot rolled strip price level based on the purchase price of Baosteel in the past five years [
20] and the prediction of experts [
21]. Finally, the main influencing factors and their levels of the three ISPs are shown in
Table 3.
2.3. Box–Behnken Experimental Design and Statistical Analysis
After determining the main influencing factors and levels, a Box–Behnken experimental design (BBD) was performed for these three ISP analytic systems. A total of 46 experiments with 6 central points were conducted for each ISP analytic system. Meanwhile, the main influencing factors were expressed at three levels. In a C-ISP analytic system, the main influencing factors were iron ore price (400 CNY·t
−1, 650 CNY·t
−1, and 900 CNY·t
−1); coking coal price (1100 CNY·t
−1, 1350 CNY·t
−1, and 1600 CNY·t
−1); hot rolled strip price (3500 CNY·t
−1, 4000 CNY·t
−1, and 4500 CNY·t
−1); carbon price (1 CNY·t
−1, 100.5 CNY·t
−1, and 200 CNY·t
−1); and construction investment costs (CNY 180 × 108, CNY 190 × 108, and CNY 200 × 108). Meanwhile, in an ISP-OBF or ISP-OBF-CCS analytic system, the main influencing factors were iron ore price (400 CNY·t
−1, 650 CNY·t
−1, and 900 CNY·t
−1); coking coal price (1100 CNY·t
−1, 1350 CNY·t
−1, and 1600 CNY·t
−1); hot rolled strip price (3500 CNY·t
−1, 4000 CNY·t
−1, and 4500 CNY·t
−1); carbon price (1 CNY·t
−1, 100.5 CNY·t
−1, and 200 CNY·t
−1); and construction investment costs (CNY 185 × 108, CNY 195 × 108, and CNY 205 × 108). The various experimental conditions of the main influencing factors, and corresponding NPV calculated as a response according to the BBD (46 runs) model, are shown in the form of design matrices in
Tables S3–S5 (Supplementary Materials).
Following the Box–Behnken design matrix of the experiments, we performed the study and obtained the results. The JMP platform was applied for a regression analysis and analysis of variance (ANOVA). The expression of the fitted second-order polynomial model is shown in Equation (2):
where
Y is the predicted response, which was the NPV in this study;
a0,
ai,
aii, and
aij are the regression coefficients;
xi and
xj are the input variables, which were
Po,
Pco,
Pca,
Ps, and
Ic in this study; and
β is the random error.
With the BBD, the influence of the main influencing factors (iron ore price, Po; coking coal price, Pco; hot rolled strip price, Ps; carbon price, Pca; and construction investment costs, Ic) on the NPV were investigated. In addition, ANOVA was used in order to test the significance of the model coefficients (p < 0.05). Moreover, a t-test and p-value were used to verify the importance of the regression coefficient. Finally, the adequacy of the model was determined by assessing the lack of fit.
2.4. Risk Analysis of an ISP
As a key economic indicator, the NPV was identified to determine the profitability of the three ISPs. Hence, the risk analysis was intended to form the certainty level of the NPV subjected to uncertain influencing factors. Besides this, in order to identify the main influencing factors that have tendencies to significantly perturb the NPV, a sensitivity analysis was necessary. Therefore, sensitivity and uncertainty analyses were performed for the three ISP analytic systems using the Monte Carlo simulation available in the JMP (Trial Version Pro 16. SAS Institute Inc., Cary, NC, USA) platform.
The iron ore price, coking coal price, hot rolled strip price, carbon price, and construction investment costs were the uncertain influencing factors that were taken into account for the sensitivity and uncertainty analyses. At the same time, the NPV was the forecast indicator. The construction investment was assumed to have a triangular distribution, and the remaining uncertain influencing factors were considered to be uniform distributions in the course of the Monte Carlo simulation, as shown in
Table 4. Moreover, about 10,000 simulation trials were made to achieve low mean standard errors in the NPV.