RWE agrees green power supply contract with steelmaker Salzgitter
FRANKFURT, Aug 6 (Reuters) -German utility RWE's RWEG.DE trading arm and steelmaker Salzgitter SZGG.DE have reached agreement on a sizeable long-term green electricity supply contract to help Salzgitter on its route to covering power demand with renewables by 2030.
RWE Supply & Trading (RWEST) will provide Salzgitter with 64 gigawatt hours (GWh) of power from Brandenburg-based solar park Boitzenburger Land for seven years from 2027, the companies said in a joint statement on Tuesday.
Salzgitter's SALCOS conversion programme to low-carbon technology seeks to enable its flat-steel business, its biggest unit, to gradually reduce carbon dioxide (CO2) emissions in steel production by introducing green hydrogen from 2026.
Conventional steelmaking is one of the largest industrial contributors to CO2 emissions, with its damaging effects on the climate.
SALCOS entails exchanging the traditional blast furnace iron ore route based on coal input with so-called direct reduction (DR), using hydrogen derived from green electricity in an electrolyser, as well as, separately, electric arc furnaces (EAFs) using steel scrap.
The 64 GWh delivery volume in the contract represents three days' worth of power output from a big nuclear plant, or five years of output from one wind turbine.
"We are getting serious about green energy sources," said Marco Hauer, head of energy procurement at Salzgitter Flachstahl. "By 2025, half of our electricity requirements will come from non-fossil sources, and by 2030 we want to be using 100% green electricity."
The contract is a so-called Power Purchase Agreement (PPA), arranged by RWEST as part of its energy solutions activities.
Boitzenburger Land, a 180 megawatt solar photovoltaic park, has been in operation since 2023 and is jointly owned by Solarenergie Boitzenburger Land, GP Joule Group and Mainova.
Financial details of the transaction were not disclosed.
Reporting by Vera Eckert; Editing by Miranda Murray and David Holmes
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