Tata Steel’s switch to “green steel” at Port Talbot could be delayed by up to eight months, the company has warned — because of problems connecting its new furnace to the power network.
The £1.25bn electric arc furnace, which will make lower-carbon steel by melting scrap rather than burning coal, was due to be running by the end of 2027 — replacing the blast furnaces that closed two years ago with the loss of around 2,000 jobs.
But the project now hinges on a major upgrade to the electricity network — and that work has hit problems.
The new furnace will melt scrap steel using huge amounts of electricity, rather than the coal-fired blast furnaces it replaces, and securing enough power is critical to the switch.
Tata is working with the National Grid to build the infrastructure needed to feed it.
The warning came from the company’s executive director and chief financial officer, Koushik Chatterjee, during a conference call with investors last month.
Chatterjee said major demolition work on the site had been completed and the project was progressing, but that “securing access to high power electricity is critical for our planned transition”.
He said the National Grid had “formally alerted us that their connectivity project is delayed”, and that Tata was in talks with the grid operator and the UK government to resolve the issue.
Asked how long the hold-up might be, he said: “Somewhat between, say, six months to eight months will certainly be there, maybe higher, after we have built the plant.”
In a statement, Tata said timelines for major projects “continue to evolve” as engineering, construction and infrastructure work progresses.
The company said it was discussing “potential adjustments to the commissioning timetable” with its partners to deliver the project “safely and as quickly as possible”.
The scale of the grid work is considerable. The National Grid said it involved building two new substations, installing transformers and laying 2km of underground cables.
It said issues with ground conditions, along with environmental and planning considerations, had contributed to the delays, but that “good progress” was being made.
Much of that work has already been visible across Port Talbot. Earlier this year the council approved a major expansion of a substation described as “nationally important” to the steel project.
Motorists have also faced up to a year of roadworks as the underground electricity network is upgraded to carry the extra load.
The delay is the latest twist in a turbulent period for the works, which is partway through a £1.25bn transformation that has already cost thousands of jobs.
The setback comes during a difficult spell for the works. Days earlier, a major fire tore through a processing line at the site, leaving part of a building collapsed.
The company said the blaze had forced its Hot Strip Mill offline, with a restart planned for the middle of next week, and that it was routing some work through its Llanwern site to keep supplies flowing to customers.
Tata says the electric arc furnace remains central to its plans for steelmaking in Port Talbot — but for now, the question is when, not if, it will fire up.
