- Salzgitter signs a 10-year Power Purchase Agreement with Octopus Energy Generation.
- Electricity generated by the project will directly support the future production of green steel by Salzgitter Group through its pioneering Low CO2 Steelmaking program.
Salzgitter Flachstahl GmbH (Salzgitter), a subsidiary of Salzgitter AG, one of Germany’s leading steel and technology groups, and Octopus Energy’s generation arm have signed a long-term Power Purchase Agreement (PPA) to enable the future production of green steel.
This PPA closed with the support of the advisory team at Pexapark, will see Octopus – which manages a €7bn portfolio of green energy projects – supply Salzgitter with 126,000 MWh of clean electricity generated at the Schiebsdorf solar farm in Brandenburg, Germany, for ten years.
Octopus acquired the Schiebsdorf solar farm last month on behalf of the Sky fund 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.
The deal comes as Octopus supercharges its green energy activity in Germany, as it plans to channel more than €1 billion into Germany’s clean energy infrastructure by 2027. Starting with the commission of the project later this year, it will secure more clean electricity for Salzgitter Flachstahl against rising electricity costs and underpinning its objective of producing green steel.
Through its Salzgitter Low CO2 Steelmaking program – SALCOS®, the company intends to use green hydrogen electrolysis using renewable energy to achieve a 95 per cent 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. With its extensive track record in European renewable energy, Octopus is an ideal long-term partner for us.”
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, and we are ready to announce more deals very soon.”
The German renewable energy PPA market is going from strength to strength – with solar power rising prominence. According to Pexapark’s European PPA Market Outlook 2024 report, 3.73GW of PPAs were signed in Germany in 2023, of which 1.77GW (18 deals) were for solar PV projects.