Swedish company H2 Green Steel has signed a contract with and Scandinavian energy supplier Fortum for the supply of green electricity. The supply is for H2 Green Steel's steel plant in northern Sweden. The plant is scheduled to come on stream in 2025.
With the help of this partnership, H2 Green Steel aims to source CO2-free electricity for its production of green steel in northern Sweden in both the short and long term. Both parties are interested in further developing the collaboration through long-term power purchase agreements (PPAs). The framework agreement is initially expected to include two contracts for 2.3 TWh per year: an index-based PPA for 1.3 TWh per year (starting in 2026) with a five-year hedging horizon and a fixed-price PPA for 1 TWh for up to nine years (starting in 2027).
Production of up to 5 million t of green steel
The H2 Green Steel plant, located in Swedish soil, relies on an electrolyzer for hydrogen supply, with a capacity of 700-800 MW, according to the company. However, to supply the hydrogen to reduce iron ore to sponge iron, this requires huge amounts of electricity. H2 Green Steel therefore describes the partnership it has now entered with Fortum as a "major step toward decarbonizing the steel industry."
Initially, the plant is to produce a volume of 2.5 million tons of green steel per year. In the second phase, the company plans to ramp up production to an annual volume of around 5 million tons per year.
"Decarbonization of industrial processes is a fundamental next step towards carbon neutrality. H2 Green Steel is one of the companies paving the way for this green industrial transformation in the Nordic countries. We believe that the complexity of large-scale electrification and hydrogen projects requires cross-sector partnerships as well as large amounts of clean energy," says Rikard Dagerbäck, Sales Manager & Strategic Customer Director, Fortum.
