In order to deliver the renewable energy and green hydrogen needed to create low-emission steel in Germany, RWE and steel producer ArcelorMittal have inked an agreement to collaborate on the development, construction, and operation of offshore wind farms and hydrogen facilities.
ArcelorMittal Germany needs a significant amount of renewable energy to decarbonize its production locations in Bremen, Hamburg, Eisenhüttenstadt, and Duisburg as planned.
RWE and ArcelorMittal are considering alternatives for collaborating in bids for North Sea offshore wind farm sites. Success depends on the ongoing revision of the “Wind Energy at Sea Act” (WindSeeG), which will fundamentally alter the cost structure of the German offshore wind industry. Financing wind farms would be more difficult and would send the wrong pricing signals to the market by making wind power unduly expensive if the government were to introduce “negative bids” in offshore wind tenders. If energy-intensive sectors in Germany, such as the steel industry, which competes internationally, are to survive, competitive power costs are a must. RWE and ArcelorMittal have a strong conviction that German green steel has the potential to set a new standard for the manufacture of steel with low carbon emissions.
In order to supply the steel production facilities in Bremen and Eisenhüttenstadt, RWE and ArcelorMittal want to work together to develop green hydrogen. To this end, they are looking for locations where electrolysis plants can be built, with the goal of starting with a 70 MW pilot plant by 2026 and eventually expanding to Gigawatt-scale projects, provided that public funding is approved.
The two businesses think they have strong potential for a successful collaboration arrangement given the combination of RWE’s experience in offshore wind farms and electrolyzers and ArcelorMittal’s role as a guaranteed buyer of green power and hydrogen. Long-term purchase agreements for wind energy and green hydrogen are planned to be finalized by RWE and ArcelorMittal.
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