Uddeholm’s Steel Production Makes Material Gains with Demand Response

Uddeholm AB is the world’s leading industrial tool steel manufacturer, with over 3,000 employees worldwide and a presence in over 90 countries. Since 2021, Sympower has worked with Uddeholm’s Hagfors factory to monetise the flexibility of their high-heat furnaces with demand response.

By adjusting their furnaces' energy consumption during times of peak demand, Uddeholm provides 13 megawatts of electricity flexibility to the frequency reserve FCR-D Up. Their demand response participation helps balance the Swedish grid and generates extra gross revenue for Uddeholm.

 

Optimising flexibility in furnaces

Uddeholm’s teams were first introduced to energy flexibility and demand response by Sympower’s long-term partner Vattenfall. Demand response programmes allow large energy consumers, such as metallurgy factories, to temporarily adjust their electricity consumption in response to grid needs, all without disrupting production. This temporary adjustment reduces stress on the power system, and companies get remunerated for providing this service to the grid. 

The team’s innovative and forward-looking spirit made them eager to explore the opportunities within their metallurgy processes, especially knowing their core processes would remain unaffected while earning additional revenue. 

After running several extensive and successful pilot projects with Sympower’s teams to test how demand response would affect their operations, Uddeholm decided to use their most energy-intensive assets available for demand response: their furnaces. 

Uddeholm’s Hagfors factory operates several electric heat treatment furnaces across different production areas to manufacture their steel. These furnaces are extremely energy-intensive, with temperatures often exceeding 1000°C. Depending on its size, each furnace can consume more than 1000 MWh annually. They also have long-running processes, ranging from a few hours to several days, making them less sensitive to slight alterations in their energy consumption and, therefore, perfect assets for demand response. 

Uddeholm allows Sympower to use a large part of these furnaces to help balance the grid for an aggregated capacity of 13MW. Since the furnaces operate at different stages of steel production, Uddeholm can leverage their inherent flexibility without affecting the manufacturing process or product quality. Instead, this creates an additional revenue stream for the company.

Uddeholm began with 0.9MW of energy flexibility from their furnaces in 2021 and have since then, gradually added megawatts to total 13MW in 2024. 

Maximising revenue with minimal disruption

Sympower’s teams can activate each furnace individually via a controller to lower its consumption during peak demand. The power is turned down in 25% increments, and Sympower sends four signals, one before each increment, to Uddeholm’s teams.

Uddeholm participates in the frequency holding reserve FCR-D Up. The Frequency Containment Reserves for Disturbances (FCR-D), are the Nordics’ primary control reserves and the first to be activated to fix disturbances in the grid’s frequency. The “up” stands for upregulation, meaning that the customers participating in demand-side flexibility will have to reduce their electricity consumption for a few minutes to support grid frequency regulation until it is back in balance at 50 Hz. 

Because the FCR-D programme acts as a first defensive layer to prevent blackouts, the energy assets connected to it must be able to be reduced significantly within 2.5 seconds after receiving the activation signal.

In addition to generating a new revenue stream, participating businesses are directly contributing to Sweden’s energy transition by helping to create a more resilient grid and ultimately helping to integrate more renewable energy sources. In 2024, Uddeholm’s furnaces were activated less than four times per month to balance the grid. 

By pinpointing the best times for Uddeholm to activate their furnaces on the relevant balancing markets, Sympower helps streamline their processes, lock in maximum earnings, and minimise plant disruption.

“We were impressed with how forward-thinking Uddeholm’s teams were”, commented Tomasz Dziendziel, Sympower’s Technical Sales Engineer. “Their expertise and deep understanding of their processes makes them willing to try new energy optimisation techniques, and they immediately saw the value demand response programmes could bring to their business”. 

 

Future-thinking operations: the benefits of balancing markets for metallurgy companies

The metallurgy industry, steelworks, and factories like Uddeholm are ideal businesses that can benefit from demand response. By leveraging flexibility, Uddeholm turned their energy-intensive equipment into a strategic advantage to unlock new revenue and help reduce their energy costs.

Encouraged by their successful first participation in demand response, Uddeholm is now seeking ways to expand their position in the demand response market. Uddeholm’s and Sympower’s teams are working together to identify where existing flexibility lies in other processes, which equipment could also be used to balance the grid, and which other balancing market they could participate in.

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