Nucor, a North American steel producer, has signed a 15-year Virtual Power Purchase Agreement (VPPA) with EDF Renewables North America for 250 MW of new solar energy, set to be constructed in Texas.
Nucor marks the second major steel manufacturer this fall to turn to solar to power its operations, after Lightsource BP closed on a $285 million financing package for the 300-MW Bighorn Solar project with Xcel Energy. The power generated by that project will be purchased by Xcel under a long-term contract with Lightsource BP and supplied to Evraz North America, the steel mill that provided land for the project’s development.
This deal is distinct from the Evraz project because it marks the steel industry’s largest virtual PPA signed to date. Unlike the Evraz contract, the electricity generated by EDF’s project will go towards powering Nucor’s entire North American operations, rather than feeding directly into one plant.
A transforming industry
A 2018 report, Cold Steel, Hot Climate, found that steel represented approximately 5% of final energy use and 7% of emissions worldwide in 2013 and named the iron and steel sector is the “world’s largest industrial source of climate pollution.”
According to Nucor’s CEO, Leon Topalian, the company has a specific focus on producing sustainable steel, reducing its carbon footprint and supporting the addition of clean power to the regional electrical grids. And while the company’s 2020 Sustainability Report doesn’t lay out any specific targets for renewable energy procurement, or any goals to become entirely renewably-powered, the company has shown commitments to clean energy in the past.
In 2019, Nucor announced that the company’s micro-mill in Sedalia, Missouri, would become the first U.S. steel plant to run on wind energy. The $250 million plant, is set to receive that energy as part of a partnership between Nucor and local utility Evergy, which will power the plant via a 75 MW PPA between the companies.
Outside of renewable energy commitments, the company boasts that all of the water used in steel production operations is recycled multiple times throughout its life cycle and that none of the company’s plants are located in high or extremely high water stress areas.
The Texas project will create “hundreds”of jobs during its roughly one-year construction period, with the majority of the workers hired from the local community. Construction is expected to commence in 2022.
Recent studies have found that 14% of steel firms’ market value is in jeopardy if they are unable to decrease their environmental impact. Nucor is one of the largest player in the steel industry, especially in North America and currently employs roughly 27,000.
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