German’s steel producer Salzgitter said Dec. 5 it concluded a power purchase agreement with France’s multinational utility company Engie that’s effective at the start of 2023 and runs through end-2025.
The agreement covers the supply of 250 GWh/year of electricity during the period that will come from 10 onshore wind farms throughout Germany, including from turbines that no longer receive subsidies under the Renewable Energy Sources Act.
The PPA with Engie is an important building block for Salzgitter’s transformation into a producer of carbon-neutral, aka green, steel, and enables the producer to melt and process steel in electric arc furnaces with electricity verifiably coming from renewable sources as early as 2023, according to Ralph Schaper, the head of energy management at plate and coil products specializing steelworks Salzgitter Flachstahl.
Salzgitter aims for the highest possible availability of wind onshore electricity, said Schaper, with wind farms located in different regions with varying startup dates and technology standards.
The PPA allows urgently needed wind turbines to remain connected to the grid and new ones to be built, according to Salzgitter Senior Originator at Engie Energy Management Solutions Sarah Drevermann. “Strong signals and confidence in renewables are particularly important right now,” she said.
Salzgitter has been securing electricity supply from renewable power providers for a while, with its Salzgitter low carbon steel project, or SALCOS, at Flachstahl progressing well.
SALCOS will see the construction of two direct reduction plants and three EAFs at the mill that will incrementally replace its blast furnaces and converters. The first stage of the three SALCOS EAFs with a crude steel capacity of 1.9 million mt/year is scheduled to go live as early as the end of 2025, with full completion by 2033.
The transformation will enable steel production at Flachstahl, currently based on coking coal, to be replaced by a new hydrogen-based route and an electricity-intensive technology, which will require plentiful power supply.
Flachstahl, in Lower Saxony, is the largest steel subsidiary of Salzgitter. In 2021, it produced 4.3 million mt of crude steel and sold Eur3.2 billion worth of products.
— Ekaterina Bouckley
