Swedish green steelmaker Stegra has signed a six-year electricity supply agreement with Uniper for a total of 6TWh to power its inaugural green hydrogen-based steel plant.
The power purchase agreement (PPA) secured a yearly electricity supply between 2027 and 2032 for a total of 6TWh to the Boden plant, which will power the 700MW of on-site electrolysis and initial 2.5 million tonnes of annual steel production.
Expected to start operations in 2026, the plant will use green hydrogen to reduce iron ore into sponge iron, which will then be fed into steel production.
Uniper and Stegra have not specified if the electricity under the PPA will be entirely renewable. H2 View has contacted both companies for confirmation.
The Uniper PPA comes after Stegra signed a three-year 2.25TWh supply deal with Axpo Nordic, bringing Boden’s total 2027 electricity supply to over 8TWh.
“The agreement with Uniper forms the base for a strategic partnership with a player which can provide us with long-term access to electricity for our plant in Boden,” explained Arne Österlind, Stegra’s Head of Energy Portfolio.
“This electricity delivery is central to our strategy and a key step towards accelerating reductions of industrial emissions in Europe.”
According to Stegra, through its green steel process, involving hydrogen-based direct reduction of iron (DRI), it will be able to produce a maximum of five million tonnes of steel with up to 95% less CO2 emissions than traditional processes in Boden.
Is DRI key to producing sustainable steel?
Steel production accounts for 8% of global carbon dioxide (CO2) emissions1, making it one of the most polluting industries. With around 1.4 tonnes of CO2 emissions per tonne of steel produced2, against a backdrop of increasing environmental concerns, the need to clean up the process that produces a vitally important material only continues to grow.
Steel, in the most basic sense, is made by mixing carbon and iron at temperatures above 1,400˚C. Primary steelmaking uses a product dubbed Pig Iron – smelted iron from ore, which contains more carbon than needed for steel.
Steelmakers can use a system that bubbles oxygen through molten pig iron, creating equal oxidisation throughout the metal, in doing so, removing excess carbon, while also vaporising or binding impurities made up of elements such as silicon, phosphorus and manganese.
The systems, known as blast furnace-basic oxygen furnaces (BF-BOF), are one of the leading contributors to CO2 emissions from steelmaking. The direct emissions from integrated BOF plants typically amount to 1.8-3.0 tonnes of CO2 per tonne of steel when coal-fired, and 0.7-1.2 tonnes of CO2 per tonne of steel if gas-fired3.
However, a system first industrialised in the 1960s that uses fuels to react with oxygen in iron oxide pellets to produce highly metallised reduced iron for steelmaking, looks set to benefit from green hydrogen, leaving just steam as the residual, and potentially reducing CO2 emissions by over 95% – the direct reduction of iron – DRI…
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