Interesting. Not necessarily practical, but unusual.
I had heard about iron flow batteries which also change the oxidation level of iron, but not about burning iron powder and reverting the rust to iron using hydrogen.
I think electrochemistry has better prospects in warm climates, where you most likely cannot sell the heat. Burning and converting heat into anything always has a penalty in terms of efficiency - but can get high power densities. In cold climates where reaction heat is a useful thing to consumers - maybe.
This is a cool concept. There are definitely possible issues that need to be hammered out, but I like seeing diverse ideas for energy production! Thanks for sharing!
Current (pilot test scale) electrical iron reduction is a bit more efficient than commercial hydrogen electrolysis. It may have some as-yet-unknown barriers to commercialisation though.