German steel manufacturer Salzgitter has announced a long-term energy supply co-operation with Spanish renewables firm Iberdrola.

It will see the German steel manufacturer supplied with wind power for the next 15 years.

Starting in 2024, the German wing of Iberdrola will generate 114MW of power over those 15 years for Salzgitter. This will come from their new Baltic Eagle wind farm, off the north-east coast of Germany.

The Baltic Eagle wind farm will produce 476MW of wind power from 50 turbines from its 2024 completion date.

Felipe Montero, Iberdrola Germany’s CEO, said: “Through strong partnerships and long-term [power purchase agreements], we are supporting the ramping up of green hydrogen in the market. Our intention is to work together with other key players in this field in the German business arena and support them in achieving their climate targets with systems that are economically viable in the market”. The project is one of many renewable joint ventures the firm is engaged in.

The SALCOS program

The energy will facilitate Salzgitter’s SALCOS program, which will test hydrogen-based steel production technologies. This project comes with the aim of perfecting low-carbon steel production techniques. It could eliminate as much as 2.5 million tonnes of CO2 emissions per year. Steel manufacturing currently accounts for 30% of German emissions, but the government aims to achieve carbon neutrality by 2045.

Salzgitter this week received $1.1bn in funding from the German government for its SALCOS program. The project will involve Salzgitter replacing a portion of the blast furnace route with a 100MW electrolyser. It will also use an electric arc furnace, instead of one fed by coal coke, as a means of cutting out CO2 out of the steelmaking process.  

Of the funding, Salzgitter CEO Gunnar Groebler said: “Having taken our investment decisions last summer, we are well on the way towards implementing green steel production […] With the final notice of funding, we now also have the policymakers fully on board, and we have the long-awaited certainty that support for SALCOS will be forthcoming.”