Tata Steel: Out with the Old and In with the New

The relationship between steel making — both on the manufacturing and construction side — and the energy industry is multifaceted and complex.

Steelmaking is, unsurprisingly, an extremely energy-intensive process.

For example, Tata Steel’s operations in India currently rely heavily on fossil fuels, using blast furnaces that consume iron ore and coking coal to produce its products. In response to this, the industry giant is actively working to reduce its reliance on fossil fuels and decrease carbon emissions, with plans to meet 25% of its energy needs through green sources by 2030.

One step as part of this wider plan involved the recent shutdown of the last blast furnace at Tata’s Port Talbot steelworks — with the site described as the beating heart of the community in South Wales and its closure dubbed a bitter blow for the town.

But the closure of Port Talbot’s last remaining blast furnace not only marked the end of an era in steel manufacturing, it — coupled with operations ceasing at Ratcliffe-on-Soar, the UK’s last coal-fired power plant — opens a new chapter for Britain’s green energy transition.

Can steel survive in a post-fossil fuel economy?

Hard-to-abate industries — such as steel — have difficulty reducing their greenhouse gas emissions and account for a large portion of the world’s energy consumption, as well as CO₂ emissions. 

30 September 2024 saw the last liquid iron tapped from Blast Furnace 4 at Tata Steel’s Port Talbot site — and the last steel from the traditional ironmaking route cast into slab as the company starts its transition to what it calls “scrap-based, low CO₂, electric arc furnace steelmaking” in the UK.

In the move away from long-established and conventional production practices, come 2027, the site is set to be home to a £1.25bn (US$1.6bn) electric arc furnace. Expected to be the biggest of its kind in the world, this new kit will melt mostly scrap to produce more than three million tonnes of new steel each year.

Imports will be relied on until the electric furnace is built, with Tata continuing to meet customer demands by processing imported steel slabs at Port Talbot.

Tata’s UK blast furnaces are the UK’s biggest single carbon polluter.

This transition to electric arc furnace technology at Port Talbot designed to reduce carbon emissions by five million metric tonnes a year and secure the future of steel manufacturing in Port Talbot and the UK at large.

North Carolina-based Nucor produces steel and related products and, as well as being the largest steel producer in the US, is the largest recycler of scrap in North America.

“We make steel through an electric arc furnace — which is very different from the traditional steel making ways — and we’ve been doing this for 60 years,” Tabitha Stine, Nucor’s General Manager of both Marketing & Branding and Energy Solutions Services explains.

“So, 70% of the world’s steel is made through blast furnaces, with the other 30% made through an electric arc furnace. In the US, it's different — 70% is made through electric arc furnaces and 30% via a blast furnace.

“But there’s no question the steel industry in totality faces challenges due to the dirty steel that's produced in a lot of countries that don't have the same regulations as modern economies.”

Nucor’s steel has a third less embodied carbon compared to blast furnace steel. And with experience in this practice spanning more than 60 years, shows that producing more eco-conscious steel is doable — and viable.

However, this does not come without its challenges, too. Tabitha is eager to highlight that Nucor's electric arc furnace process is more electricity-intensive, which makes energy security and costs an important consideration for the company.

As an aside, energy consumption is one of the two biggest costs for Nucor, alongside raw materials, highlighting the importance of energy in the company’s production process. And with a workforce of 32,000 and operations across 300 locations, in many of the states it operates in, Nucor is the local utility’s largest customer.

Explaining the significance of energy and decarbonisation for Nucor's operations and costs, Tabitha adds: “If we can find ways to reduce and find better sources for clean energy and accelerate that transition, we not only directly benefit, but all of our customers do as well, who need cleaner steel or who also need energy.”

But there is only a finite amount of scrap material available to power these electric arc furnaces — and in the eyes of Jon Bolton, Executive Chairman of Materials Processing Institute, not enough to power the electric arc ambitions of Europe.

“It is a simple process and a proven process,” he says, speaking of changes to steelmaking in Teesside, in the north west of England. “Moving from blast furnace technology to electric arc technology is an important step, both to decarbonise the industry but also to make it more competitive.”

Reimagining the steelworks and the broader power grid

In the financial year 2022/2023, Tata Steel’s energy intensity per ton of crude steel produced amounted to a staggering 23.3GJ.

At Port Talbot alone, the steelworks used as much electricity as that of the whole of Swansea, a city a few miles down the road from the iconic site.

With electric arc furnace steel production demanding significant amounts of energy from the grid, it's no surprise that Tata Steel’s Port Talbot site is undergoing a transformation that will — hopefully — result in it using more electricity and becoming less carbon-intensive.

However, this shift necessitates a major overhaul of the local power grid to support the increased electricity demand. To support this behemoth-scale transition, Tata Steel has signed an agreement with British grid operator National Grid to build the energy infrastructure needed to switch its Port Talbot plant to green steel production.

Tata Steel’s agreement with National Grid to build a new power infrastructure for the Port Talbot site is a significant development that will contribute to the reimagining of the steelworks and the broader power grid.

The agreement outlines National Grid’s commitment to construct a new power infrastructure by the end of 2027, designed to meet the substantial energy requirements of Tata’s incoming electric arc furnace.

Rajesh Nair, Tata Steel UK’s CEO says: “This will help us replace our ageing and carbon-intensive blast furnaces with a state-of-the-art electric arc furnace capable of producing our customers’ most demanding steel products.”

The impact of a new electric arc furnace

It’s probably no surprise from reading this far that new infrastructure at Port Talbot is going to have an impact on the grid, energy use and pressure as well as emissions.

Although expected to reduce emissions by around 85% per year — equivalent to the annual emissions of nearly two million homes — and being generally less energy-intensive than blast furnaces, the electric arc furnaces at Port Talbot will need upgraded electrical infrastructure, including a new 275kV substation linked to the larger 400kV Swansea North substation.

This represents approximately a 90% reduction in carbon emissions compared to Tata’s existing blast furnace technology.

On top of this, the Crown Estate’s Celtic Sea Offshore Wind Leasing Round aims to develop up to 4.2GW of floating wind capacity off the coasts of south Wales, leading up to the Future Port Talbot project — transforming the port into a hub for floating wind farm manufacturing.

The electric arc furnaces can be powered by renewable energy, meaning the infrastructure’s emissions and impact can be considerably lowered.

Thachat Viswanath Narendran, Tata Steel’s CEO and Managing Director says: “Tata Steel is committed to creating a low-CO₂ steel business at the heart of a green industrial ecosystem in Wales and the wider UK to safeguard steel supplies and create economic opportunities for generations to come.” 

Rajesh adds: “Tata Steel has always been a responsible, long-term and patient investor in its UK business and we are committing significant additional capital to ensure that we can create an operationally, financially and environmentally sustainable business for the future.”

To read the full story in the magazine click HERE

Explore the latest edition of Energy Digital Magazine and be part of the conversation at our global conference series, Sustainability LIVE.​​​​​​​

Discover all our upcoming events and secure your tickets today.

Energy Digital is a BizClik brand