The whole business idea of making fossil-free and green steel is based on cheap green electricity.
We need fossil-free electricity quickly, then there are really no alternatives to wind power, says Jan Moström, CEO of LKAB to SVT.
The mining giant LKAB will be Sweden’s largest electricity consumer. By 2040, the need is expected to increase from the current 2 TWh to 50 TWh per year. That is more than all of Denmark’s consumption of electricity. In Gällivare alone, 10 TWh per year will be needed by 2030. This corresponds to electricity for four million electric cars.
And for Sweden’s largest electricity consumers, it is in a hurry, and the price is crucial.
LKAB believes that wind power on land today is the cheapest. In the energy companies’ recent report, the assessment is that new wind power on land costs 32 öre per kWh on average. Offshore wind power is estimated at 53 öre / kWh and new nuclear power at 56 öre per kWh.
Different scenarios for future electricity needs
If LKAB’s electricity were to become 20 öre more expensive per kWh, it would cost SEK 10 billion a year. Then the whole business idea is jeopardized.
I do not rule out nuclear power in the long run, but at least for the next 10-15 years we see wind power as clearly the most competitive, says Jan Moström.
The competitor H2GS in Boden needs up to 10 TWh by 2026. Even more by 2035. Industry and Swedish politicians believe that the electricity demand in Sweden can double in 25 years.
We chose Sweden because there is a lot of renewable electricity at a good price. It is easier to say “green steel” if you only have electricity from sun, wind and water, said H2GS Carl Erik Lagerkrantz about their plans in Boden.
Svenska kraftnät has different scenarios for future electricity needs. In scenarios with both life-extended reactors and new nuclear power plants by 2050, 3-4 times more wind power is still needed than today to cope with extensive electrification.
And the companies behind the green steel have the technology to handle days without wind.
Hydrogen storage in Luleå inaugurated
At least 80 percent of the electricity for green steel is used to make hydrogen – what replaces coal when steel is made from iron ore. This summer, SSAB will inaugurate a hydrogen warehouse in Luleå to test the technology. The warehouse provides the opportunity to produce the most hydrogen when there is a lot of wind and the electricity is the cheapest. When it is not blowing, you use hydrogen from the warehouse.
Then you take advantage of times with the lowest prices. LKAB also sees benefits for the whole of Sweden. On cold days with the greatest need for electricity, LKAB can completely flex out and send all current south. This reduces the risk of power shortages and rising prices.