Power Purchase Agreement Confirmed for Green Steel Production

A long term Power Purchase Agreement (PPA) between Octopus Energy and Salzgitter Flachstahl GmbH (Salzgitter), has been signed to enable the future production of green steel.

Through the agreement, which was supported by Pexapark’s advisory team, Octopus will supply Salzgitter, a subsidiary of Salzgitter, one of Germany’s leading steel and technology groups, with 126,000 MWh of clean electricity generated at the Schiebsdorf solar farm in Brandenburg, Germany, for 10 years.

Salzgitter Flachstahl’s SALCOS programme, – Salzgitter Low CO2 Steelmaking – the company are set to utilise green hydrogen 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.”

Octopus currently manage a €7bn portfolio of green energy projects, through they are now looking to build upon their green energy activity in Germany, with plans to invest over €1 billion into Germany’s clean energy infrastructure by 2027.

Having acquired the Schiebsdorf solar farm last month on behalf of the Sky fund (ORI SCSp) it manages, the farm is currently under construction and due to enter operation later this year. It is the largest solar farm in Octopus’s renewable energy portfolio.

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.”