Stegra Signs 6 TWh Electricity Deal to Power Green Steel Production

Swedish green iron and steel maker Stegra (formerly H2 Green Steel) announced that it has signed a long-term power purchase agreement (PPA) with German low-carbon power producer Uniper for a yearly supply of electricity produced over the 6-year period ranging from 2027-2032, covering a total of 6 TWh (terawatt hours).

Founded in 2020, Stegra is developing its flagship green steel plant in Boden, Sweden, with the project including a giga-scale green hydrogen plant as an integrated part of the steel production facility. The company utilizes hydrogen produced using green power to remove the oxygen from iron oxide, avoiding most of the CO2 emissions normally produced, and uses electricity from 100% renewable sources for the energy requirements generated in the manufacturing process. Construction began in 2022 and the plant is expected to start operations in 2026, with a goal to annually produce five million tons of green steel by 2030.

The deal will enable the production of low-carbon hydrogen, iron and steel at Stegra’s plant in Boden, supplying electricity needed to power the 700MW electrolysis plant that will generate green hydrogen, which in turn will reduce iron ore to green sponge iron. That iron will be used to produce steel at the Boden plant.

Arne Österlind, Head of Energy Portfolio at Stegra, said:

“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, set to produce green hydrogen, green iron and green steel at scale. This electricity delivery is central to our strategy and a key step towards accelerating reductions of industrial emissions in Europe.”

Düsseldorf-based Uniper has set targets to achieve carbon neutrality by 2040, and for its installed power generating capacity to be more than 80% zero-carbon by the early 2030s.

Johan Svenningsson, Country Chairman at Uniper Sweden, said:

“We are proud to support the ongoing transition of the energy system by being a reliable and innovative partner to industrial off-takers.”