German utility RWE's trading arm and steelmaker Salzgitter have reached a significant long-term green electricity supply contract to support Salzgitter's goal of meeting its power demands with renewable energy by 2030.
RWE Supply & Trading will provide Salzgitter with 64 gigawatt hours (GWh) of power from the Brandenburg-based solar park Boitzenburger Land over a seven-year period starting in 2027, according to a joint statement from the companies on Tuesday.
Salzgitter's SALCOS conversion program aims to transition its flat-steel business, its largest division, to low-carbon technology. The initiative will gradually reduce carbon dioxide (CO2) emissions in steel production by introducing green hydrogen from 2026. Conventional steelmaking is a major industrial contributor to CO2 emissions, impacting the climate significantly.
The SALCOS program plans to replace the traditional blast furnace iron ore route, which relies on coal, with direct reduction (DR) using hydrogen produced from green electricity in an electrolyser, along with electric arc furnaces (EAFs) that utilize steel scrap.
The 64 GWh delivery volume under the contract is equivalent to three days' power output from a large 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 agreement is a Power Purchase Agreement (PPA), organized by RWEST as part of its energy solutions activities. Boitzenburger Land, a 180-megawatt solar photovoltaic park, has been operational since 2023 and is jointly owned by Solarenergie Boitzenburger Land, GP Joule Group, and Mainova.
