Uniper to Supply 6 TWh of Power for Swedish Green Hydrogen Plant

Uniper SE has signed an agreement to deliver six terawatt hours (TWh) of electricity over six years for the electrolyzer unit of a steel production project by Stegra in northern Sweden.

The electrolyzer — an apparatus that extracts hydrogen from splitting the water molecule using electricity — will have a capacity of 700 megawatts (MW). The clean hydrogen it will produce will be used to reduce iron ore to green sponge iron that will feed the steel unit of the under-construction 270-hectare facility in the town of Boden. German gas and power utility Uniper will begin power delivery 2027.

The three-plant facility will produce 2.5 million tonnes a year of green steel in the initial stage, with operations planned to start 2026. By 2030, the capacity is expected to grow to five million tons per annum.

“We are proud to support the ongoing transition of the energy system by being a reliable and innovative partner to industrial off-takers”, Uniper Sweden chair Johan Svenningsson said in a joint statement by the companies.

Arne Österlind, head of Stegra’s energy portfolio, said, “The agreement with Uniper forms the base for a strategic partnership with a player which can provide us with long-term access to electricity for our plant in Boden, set to produce green hydrogen, green iron and green steel at scale”.

“This electricity delivery is central to our strategy and a key step towards accelerating reductions of industrial emissions in Europe”, Österlind added.

Earlier Stegra contracted Axpo Nordic for the delivery of 2.25 TWh of power over three years starting 2027.

“Both parties see this agreement as the beginning of a longer business relationship and an important element of the electricity supply to Stegra’s plant”, said a joint press release November 26.

According to Stegra, renamed from H2 Green Steel this year, using clean hydrogen instead of coal and electrifying the facility’s steelmaking process will result in a 95 percent reduction in carbon dioxide emissions.

Stockholm-based Stegra has secured several offtake agreements including with Porsche AG and IKEA’s biggest retailer, Ingka Group.

“Up to 35,000 tonnes of the low-emission steel produced in Sweden are to be used per year for the series production of Porsche vehicles”, said a joint statement October 31, 2023. “By way of comparison: in 2022, 220,000 tonnes of steel were used in Porsche vehicles”.

Meanwhile the green steel committed to Ingka will be used for IKEA warehouse racking. “The agreement forms part of Ingka Group’s ongoing action to reduce its climate footprint and will account for 50 percent of warehouse racking purchased globally”, Ingka said in a statement with Stegra September 13, 2023.

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