Octopus Energy’s generation arm has signed a long-term PPA with Salzgitter Flachstahl to enable the future production of green steel.
The PPA, closed with the support of the advisory team at Pexapark, will see Octopus supply steel maker Salzgitter with 126,000MWh of clean electricity generated at the Schiebsdorf solar farm in Brandenburg, Germany, for a period of 10 years.
Starting when the project is commissioned later this year, it will secure more clean electricity for Salzgitter Flachstahl, hedging against rising electricity costs and underpinning its objective of producing green steel.
Through its Salzgitter Low CO2 Steelmaking programme – SALCOS, the company intends to use green hydrogen, electrolysed using renewable energy, to achieve a 95% reduction in carbon emissions from conventional steel production processes.
Ralph Schaper, head of Salzgitter’s energy economy department said: “As we work towards our strategic emissions reduction goal, this latest PPA adds another significant source of clean electricity to power our operations, create green hydrogen and ultimately produce greener steel for our customers.
“Octopus, with its extensive track record in European renewable energy, is an ideal long-term partner for us.”
The deal comes as Octopus supercharges its green energy activity in Germany, as it plans to channel more than €1bn into Germany’s clean energy infrastructure by 2027.
Octopus acquired the Schiebsdorf solar farm last month on behalf of the Sky fund (ORI SCSp) it manages.
Currently under construction and due to enter operation later this year, it is the largest solar farm in the firm’s growing renewable energy portfolio in Germany and across the globe.
Alex Brierley, co-head of Octopus Energy Generation’s fund management business, said: “This partnership with Salzgitter is a giant leap towards decarbonising heavy industry and propelling Germany’s clean energy transition.
“Germany’s shift to net zero has many huge opportunities to get involved, and we’re geared up to announce more deals very soon.”