The two companies have formed a partnership that enables H2 Green Steel to purchase Fortum’s carbon-free electricity on both short and long-term bases for its green steel operations in Northern Sweden. The parties will strengthen the cooperation further in long-term Power Purchase Agreements (PPAs). The frame agreement is initially planned to include two deals for 2.3 TWh per year: an index-based PPA of 1.3 TWh annually (from 2026) with a five-year hedging horizon, and a fixed price PPA of 1 TWh for up to nine years (from 2027).
Significant volumes of electricity are needed to power the 700-800MW electrolyzer that will generate green hydrogen, which in turn will reduce iron ore to sponge iron that will feed the steel production at H2 Green Steel’s plant in Boden. In this important partnership with Fortum, another big step is taken in support of H2 Green Steel’s ambitious venture and the decarbonization of the steel industry.
H2 Green Steel’s plant in Boden will initially produce an annual volume of 2.5 million tonnes of green steel. In the second phase, the company will ramp up production to about 5 million tonnes. It is expected to start operation 2025.
“The decarbonisation of industrial processes is a fundamental next step towards carbon neutrality. H2 Green Steel is one of the companies paving the way for this green industrial transition in the Nordics. We believe that the complex nature of electrification and hydrogen projects at scale requires cross-sectoral partnerships as well as large amounts of clean energy”, says Rikard Dagerbäck.
“Fortum takes a frontrunner position among Nordic companies supporting the region’s green industrialization. Despite a historic energy crisis with record-high prices of electricity, Fortum demonstrates true sustainability leadership and takes a long-term view to solve the fundamental issue, namely the climate crisis. We are proud to bring Fortum on board as a core partner in our energy portfolio and will continue to build our portfolio with long-term renewable electricity at competitive price levels,” says Luisa Orre.