As of: February 21, 2024, 10:00 p.m
By: Bona Hyun
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For the production of green steel: Salzgitter Flachstahl GmbH, in collaboration with Pexapark, concludes a power purchase agreement with Octopus Energy Generation.
Salzgitter - Green ray for the future: Octopus Energy Generation and Salzgitter Flachstahl GmbH (Salzgitter), a subsidiary of Salzgitter AG, one of the leading German steel and technology groups, are joining forces to drive steel production in Germany using solar energy.
The contract starts this year and has a term of 10 years, Octopus Energy said.
Octopus Energy and Salzgitter Group confirm contract for the purchase of 122 MWp of solar power for the production of green steel © Octopus Energy Generation
Renewable energy in steel production: Octopus Energy and Salzgitter Group confirm contract
The agreement between the two companies supports Salzgitter's pioneering program for low-CO₂ steel production.
This is intended to reduce carbon emissions from the German steel sector, which currently accounts for around 28 percent of industrial CO₂ emissions in Germany, according to a press release from Octopus Energy.
As part of a power purchase agreement (PPA), Octopus supplies Salzgitter with 126,000 MWh of green electricity per year from the Schiebsdorf solar park in Brandenburg, which Octopus recently acquired.
“The partnership with Salzgitter is a significant step towards decarbonizing heavy industry and driving forward the clean energy transition in Germany.
Germany’s transition to Net Zero offers many opportunities to get involved,” said Alex Brierley, co-head of Octopus Energy Generation’s fund management business.
They are preparing to announce further deals very soon.
Green hydrogen and for the production of steel should reduce CO₂
Salzgitter wants to use the energy from the Octopus solar park for electrolysis to produce green hydrogen, which will replace fossil fuels in steel production.
The aim is to reduce emissions by 95 percent compared to conventional steel production.
Ralph Schaper, head of the energy industry department at Salzgitter AG, said in a press release:
“Our strategic goal is to reduce CO₂ emissions.
This latest PPA opens up another important source of clean energy for us, including the generation of green hydrogen and thus the production of CO₂-reduced steel for our customers.
Octopus is another long-term partner for us.”
How Octopus Energy Generation and Thyssenkrupp are getting involved in renewable energies
In any case, the production of green steel is on the rise.
At the beginning of February, Federal Minister of Economics Robert Habeck announced the long-awaited funding commitment for the conversion of a steelworks in Bremen.
The federal government supports the switch to climate-neutrally produced steel at ArcelorMittal's locations in Bremen and Eisenhüttenstadt.
“Everything has been clarified,” said the Green politician at a company staff meeting in Bremen.
The final step from Brussels is still missing with the notification, but the workforce can rely on the funding.
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Germany's largest steel company Thyssenkrupp is now officially looking for hydrogen suppliers for a planned plant for more climate-friendly steel production.
The steel division of the industrial group announced on Friday that the tender for the hydrogen supply to the first so-called direct reduction plant had started.
The first use of hydrogen is planned for 2028, and the ramp-up to full hydrogen operation should be completed in 2029.
The company states its annual requirement at around 143,000 tons.
This could save up to 3.5 million tonnes of carbon dioxide per year.
(bohy with agencies)