Decarbonizing Steel Manufacturing Through Renewable Energy Integration: Technical, Economic and Environmental Assessment of Mobarakeh Steel Company

ABSTRACT

Decarbonizing the steel industry, which accounts for approximately 7.2% of global emissions, is a critical challenge in achieving net‐zero targets. This study presents a real‐world techno‐economic and environmental case study of integrating renewable energy sources (RESs) into the power supply system of the Mobarakeh Steel Company in Iran. A hybrid energy system consisting of photovoltaic (PV) panels, wind turbines, battery storage, diesel generators and grid connection is modelled using HOMER Pro. Twelve different energy scenarios are evaluated based on net present cost (NPC), levelized cost of energy (LCOE), renewable energy penetration and emissions. In addition, a sensitivity analysis is conducted to investigate the impact of load variations on system performance. The results indicate that the cost‐optimal configuration achieves an NPC of $‐5629M and an LCOE of −0.0034 $/kWh, while supplying 87.4% of the demand from renewable sources. In contrast, the environmentally optimal scenario reduces annual emissions to 321,997 tons, representing a significant reduction compared to conventional supply systems. However, incorporating battery storage increases system reliability at the expense of economic performance. The findings highlight a critical trade‐off between economic and environmental objectives in industrial energy systems and demonstrate that carefully designed RES‐based hybrid systems can significantly enhance sustainability and energy independence in large‐scale steel production.