TATA STEEL may delay the timeline of its £1.25 billion UK low-carbon steel project by six to eight months due to delays in securing electricity access for the site.
The company is building a 3.2 million-tonne electric arc furnace (EAF) project at Port Talbot as part of its decarbonisation plan. The project will replace Tata Steel’s blast furnace plant of similar capacity, which has now been shut.
Before the delay in power access, Tata Steel was aiming to begin operations at the new facility by late 2027 or early 2028.
"While we are working with ESO (Electricity System Operator) and National Grid for the new electrical infrastructure, National Grid has formally alerted us that their connectivity project is delayed," said Koushik Chatterjee, Executive Director (ED) & Chief Financial Officer (CFO) at Tata Steel.
Chatterjee said National Grid had informed the company about possible delays to the original schedule for the high-voltage connection. He said Tata Steel was working with stakeholders, including the UK government, to reduce the impact and prepare revised timelines.
He said major demolition work at the site had been completed, while fabrication and delivery of equipment continued. He added that securing higher-power electricity access was important for the transition project.
The project, which is receiving £500 million in government support, aims to cut site-level CO2 emissions by 90 per cent, equal to around 5 million tonnes annually.
Meanwhile, a fire incident took place at the Port Talbot project site on Wednesday (June 3). Tata Steel UK said on Thursday that all personnel were accounted for and evacuated safely.
Chatterjee said the company was continuing discussions with National Grid and the UK government to resolve the issue.
"We are working with the UK government, the National Grid and (Electricity System Operator(ESO), which is the electricity supplier, to see if we can mitigate it, but somewhere between six months to eight months will certainly be there, maybe higher, after we have built the plant," Chatterjee said in response to a question on whether the company was facing delays in commissioning the project.
The Tata Steel executive said the company was trying to reduce the duration of the delay but could not avoid some disruption.
"We are actively working to see if we can reduce it (the delay) further, but there will be some imminent delays," the ED & CFO said without sharing further details.
In May 2024, Tata Steel signed a connection offer with the Electricity System Operator (ESO). Under the agreement, National Grid would build new electrical infrastructure to power the 3.2 million-tonne electric arc furnace by the end of 2027.
According to Tata Steel, NESO (the National Energy System Operator) is a public body that manages the connection process, including the connection contract with Tata Steel UK. NESO also manages operations of the electricity grid in the UK.
National Grid Electricity Transmission (NGET) is the private company responsible for building, owning and maintaining the connection.
A Tata Steel spokesperson said: "This is a major industrial project, and like all projects of this scale, timelines continue to evolve as detailed engineering, construction and infrastructure work progresses.
"While we are still discussing potential adjustments to the commissioning timetable, we are working closely with National Grid, our construction partners and the UK government to deliver the project safely and as quickly as possible."
The Tata Steel Group is one of the world's leading steel producers with an annual crude steel production capacity of 35 million tonnes. The company also operates across multiple geographies.
