German energy company RWE and steel producer Arcelormittal have signed a memorandum of understanding to jointly develop, build and operate offshore windfarms and green hydrogen production capacity to supply Arcelormittal’s German mills.

The two companies intend to jointly bid for North Sea offshore wind projects and deploy a 70MW pilot electrolyser by 2026. Long-term plans for green hydrogen production would see the companies aiming to cooperate on gigawatt-scale projects, subject to state funding being secured.

“Electricity from renewable energies and green hydrogen must become trademarks of industrial production in Germany,” says Sven Utermohlen, CEO of offshore wind for RWE Renewables.

“Industry needs both of these in large quantities as quickly as possible in order to achieve its climate targets. That is why we are planning one of the most ambitious expansion projects for offshore windfarms and electrolysers in Germany together with Arcelormittal.”

“Electricity from renewable energies and green hydrogen must become trademarks of industrial production in Germany” Utermohlen, RWE

Integrating energy and hydrogen supply into the steelmaker’s German business will help equip it for the future, according to Reiner Blaschek, CEO of Arcerlormittal Germany.

The company operates plants in Bremen and Hamburg in northern Germany, at Eisenhuttenstadt in the east and at Duisburg in the Ruhr region.

It outlined plans earlier this year to use green hydrogen at the Bremen and Eisenhuttenstadt sites to produce up to 3.5mn t/yr of green steel. Retrofitting the plants to use hydrogen would cost €1-1.5bn ($1.05-1.6bn), the firm says.

Opposing negative bidding

RWE also stressed its opposition to proposed legal reforms to introduce “negative bidding” to Germany’s offshore wind tender process. If enacted, this would see competing developers bidding for zero subsidies and then offering extra payments to the government for the rights to develop windfarms.

 This will make financing windfarms more difficult, according to RWE.

“Wind power would become unnecessarily expensive, sending false price signals to the market. Competitive electricity prices are absolutely necessary if energy-intensive industries such as the steel industry, which are in global competition, are to have a future in Germany,” the firm says.

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Author: Stuart Penson