That’s because most steel production globally involves burning copious amounts of coal in a blast furnace to turn raw iron ore into iron; the iron is then made into steel in a separate furnace. The United States still operates a dozen blast furnaces, which account for roughly 30% of the country’s annual steel production.
The remaining 70% of U.S. steel output comes from electric arc furnaces, including the hulking unit at Rocky Mountain Steel’s facility, which is capable of producing 1.1 million tons of steel per year. These power-hungry furnaces turn scrap metal into a glowing orange liquid that is then transformed into recycled steel parts.
Producing steel this way can curb CO2 emissions by up to 75% compared to traditional coal-based methods, according to industry research. However, the carbon intensity of steel made in an electric arc furnace depends on the electricity used — and most of the 100-plus such facilities operating in the U.S. rely primarily on coal- and gas-fired electric grids.
Until a few years ago, Rocky Mountain Steel got its power from Xcel Energy’s coal-fired power plant in Pueblo.
Lightsource bp financed, owns, and operates the neighboring $285 million Bighorn Solar project. The developer sells the electricity it generates to Xcel under a 20-year power purchase agreement; the utility then provides power to Evraz North America for the steel mill. When the 1,800-acre solar array came online in late 2021, Bighorn became the nation’s largest on-site solar facility dedicated to a single customer.
“This project proves that even hard-to-abate sectors like steel can be decarbonized when companies come together with innovative solutions,” Kevin Smith, who was then the CEO of Lightsource bp, Americas, said in an October 2021 press release. The fixed-rate power agreement gives the mill’s owner “the low, predictable electricity prices it needs to stay in Pueblo and invest in its future there, keeping more than 1,000 jobs in the local community,” according to the release.
Evraz North America first announced plans to sell its assets in August 2022 after its parent company, Evraz plc, was sanctioned by the British government following Russia’s invasion of Ukraine. Evraz plc is part-owned by a Russian oligarch.
Atlas Holdings, the firm acquiring Evraz North America, didn’t immediately return questions this week about whether the sale would affect the solar-power agreement in Pueblo. However, Atlas noted in its June 27 news release that the “Pueblo steel mill stands as a remarkable testament to commitment to sustainability” owing to the solar project.
