Tata Steel signs power deal to make UK project green

Tata Steel has signed a deal with the UK’s Electricity System Operator (ESO) to develop the required power infrastructure to convert its Port Talbot site into a green steel project. 

The deal involves UK’s National Grid building electrical infrastructure capable of powering the 3.2 million-ton (mt) electric arc furnace by the end of 2027, Tata Steel said in a statement.

Financial details of the agreement were not disclosed. 

Tata Steel UK’s chief executive officer, Rajesh Nair, said the agreement was a critical milestone in transforming the company’s steelmaking operations in Port Talbot. 

“This will help us replace our aging and carbon-intensive blast furnaces with a state-of-the-art electric arc furnace capable of producing our customers’ most demanding steel products,” Nair said.

“This agreement means we will have sufficient power for our new electric arc furnace and the capability in the longer-term to further strengthen our business,” Nair added.  

Liquid steel production from two steel converters at Port Talbot is about 5 mt per annum.

“Having access to higher-power electricity is a foundation stone for greener steelmaking, regardless of the technology choice. That’s why we’ve been working closely with the ESO and National Grid for a number of years on how to strengthen our power infrastructure. This agreement means we will have sufficient power for our new electric arc furnace and the capability in the longer-term to further strengthen our business,” he said. 

UK industry minister Alan Mak said the project was “another positive step towards securing the future of steelmaking in South Wales and the UK.”

“I’m pleased to see Tata Steel reach this milestone,” Mak said.

“Our support for the steel industry is unwavering, and our historic investment alongside our grid capabilities means we can look ahead to cleaner, greener steel production in years to come. Accelerating grid connection timescales is a top priority for the government and we are working closely with Ofgem and the network companies to transform the electricity network at a scale and pace not seen for decades,” the minister added. 

Tata Steel Group is one of the world’s most geographically-diversified steel producers, with a consolidated turnover of $30.3 billion in the financial year ended 31 March 2023. 

The company’s plant at Port Talbot supports manufacturing and distribution operations at sites across Wales, England, and Northern Ireland as well as Norway, Sweden, France, and Germany.

Tata Steel in the UK has the ambition to produce net-zero steel by 2045 at the latest, and to have reduced 30% of its CO2 emissions by 2030.