Image Credit: Salzgitter AG
Octopus Energy Extends European Reach, Secures Major Solar Power Deal with Salzgitter Group.
In a significant move toward decarbonization, Octopus Energy, a prominent energy player, has finalized a substantial agreement to supply solar power to Salzgitter Group, a leading steel manufacturer in Germany.
The agreement, facilitated by Octopus Energy's generation arm, entails a power purchase agreement (PPA) with Salzgitter Group, ensuring the delivery of 126,000 MWh of clean electricity annually from the Schiebsdorf solar farm in Brandenburg.
While the financial specifics of the 10-year deal remain undisclosed, its overarching objective is clear: to bolster Salzgitter's strategic shift toward low-carbon steel production. By providing the company with a stable, long-term electricity supply, the agreement empowers Salzgitter to reduce the carbon footprint associated with its steel manufacturing processes, mainly by adopting hydrogen-based furnaces.
Salzgitter's forthcoming plans include the utilization of an electrolyzer powered by Octopus' solar farm to produce green hydrogen, a pivotal step in replacing fossil fuels in steel production.
This initiative underscores Salzgitter's commitment to emission reduction within the steel industry, aligning with broader industry trends focusing on hydrogen adoption, carbon capture, and electric arc furnace technologies.
Octopus Energy's acquisition of the Schiebsdorf solar farm, executed last month on behalf of the Sky fund (ORI SCSp), represents a strategic investment toward building clean energy infrastructure in Germany. This move is part of Octopus Energy's ambitious plan to allocate over €1 billion toward German clean energy ventures by 2027, further solidifying its position as a critical player in the renewable energy landscape.
Alex Brierley, co-head of Octopus Energy Generation's fund management business, hailed the partnership with Salzgitter as "a significant leap towards decarbonizing heavy industry and propelling Germany's clean energy transition."
"Germany's shift to net zero has many opportunities to get involved, and we're geared to announce more deals very soon," he added.Â
Ralph Schaper, head of Salzgitter AG'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."