Abstract
The aluminium industry emits approximately 1.1 billion tonnes of CO2-eq annually, contributing about 2% of global industrial emissions. Decarbonization pathways aim to achieve net-zero emissions by 2050, but this requires making decisions today for technologies having lifetimes of 20 – 25 years, based on uncertain economic assumptions, particularly given the volatility of energy prices. Traditional price forecasting models often fail to anticipate major disruptions, such as the 2022 energy crisis. This work applies Monte-Carlo Analysis (MCA) to evaluate the financial stability of decarbonization pathways under energy crisis scenarios and report on the resilience of the alternative solutions. In the modelled secondary aluminium production facility, direct electrification is assumed for lower temperature furnaces of annealing heat treatments or preheating, while the study defines the decarbonization options based on the melter furnace technology, a key bottleneck in terms of load and viable technological alternatives with roof temperatures exceeding 1,000°C. In this study, four decarbonization pathways characterized by unique melting furnace solutions are analyzed, namely: an oxyfuel scenario using natural gas with carbon capture, a biomass-based approach relying on syngas, a hydrogen-based solution utilizing onsite electrolysis, and a plasma-based system with torches for melting. These options are compared to a natural gas baseline. Differences in electrification levels and reliance on imported energy sources result in varied economic resilience under price shocks that can occur during different times of the plant’s life. Results obtained for a set of initial price levels at moderate or crisis energy price profiles revealed a more resilient oxyfuel scenario, followed by biomass utilization, and finally the all-electric scenarios utilizing either hydrogen or plasma. For instance, the oxyfuel option demonstrates a 54% probability of negative incremental Net Present Value (iNPV) with reference to the base case under both crisis and moderate price profiles. Conversely, the biomass scenario was found to have a 95-98% likelihood of economic loss under similar conditions while the all-electric solutions were at 100% likelihood of loss regardless of the initial price or profile. This is because electricity prices start at a higher baseline than combustible fuels and spike dramatically during crisis events. This analysis highlights the importance of considering energy price volatility and the need for diversified energy sources when developing decarbonization strategies for the aluminium industry.