H2 Green Steel has signed a 14-TWh power purchase agreement with Norway's Statkraft for its planned low-carbon steel production plant in Northern Sweden, the companies said in a statement June 8.
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The seven-year contract for 2 TWh/year will power the planned 800 MW electrolyzer that will produce hydrogen for the plant at Boden.
The contract runs from 2026 to 2032, backed by guarantees of origin for renewable energy, sourced from Statkraft's hydropower plants in Northern Sweden.
Platts assessed Nordic hydro 2026 guarantees of origin at Eur2.38/MWh ($2.56/MWh) on June 7, up from Eur0.77/MWh a year before, according to data from S&P Global Commodity Insights.
The plant will produce 2.5 million mt/year of steel in a first phase, with first production expected in 2024.
"This is an important step in building our portfolio of renewable electricity, and we will continue to partner with front-runners in the industry that share our values and that can offer renewable electricity at competitive prices," H2 Green Steel Chief Procurement Officer Luisa Orre said in the statement.
"We also look forward to supporting the build-out of new renewable power in the region, and we are open to buying power from projects in all stages, sizes and forms, in baseload or pay-as-produced offtakes," Orre added.
The PPA with Statkraft would provide around 30% of the power requirements of the 800-MW electrolyzer.
By 2030 H2 Green Steel wants to produce 5 million mt of green steel annually, with gigawatt-scale electrolysis powered by wind to provide green hydrogen.
The hydrogen is then used instead of coke to reduce iron ore to iron releasing water instead of CO2.
Steel production accounts for about 7% of global CO2 emissions annually, H2 Green Steel said on its website.
The company has pre-sold over 1.5 million mt/year of its planned initial production across several contracts of more than five to seven years, it said May 10.
S&P Global assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur9.95/kg ($10.69/kg) June 7 (Netherlands, including capex), based on month-ahead power prices.
Power prices in North Sweden remain low, averaging below half the average values in the south in the year to May.