There is no shortage of iron, while this is another way to make usage of abundant renewable energy. Especially when at the destination actually heat is required. Apart from that, neither wind turbines nor more transmission lines help with the problem of making excess energy available for future use.

Using electricity to run a heat pump will beat combustion in efficiency, and that only becomes way more true when the energy source starts as electricity being sunk into creating a synthetic fuel.

While that is probably true, the problem still exists that renewables produce a lot of electricity when there is not enough demand for it. Iron combustion is a solution for that problem.