Shares of Tata Steel Ltd came under pressure after the company said its £1.25 billion green steel project at Port Talbot in the UK could face delays due to issues with high-voltage power connectivity.
The stock fell more than 2 percent during Monday’s session to an intraday low of Rs. 201.85. Shares were trading at Rs. 203.40, compared with the previous close of Rs. 206.80.
The company has a market capitalisation of Rs. 2,54,100 crore.
Power connection issues hit timeline
Tata Steel had initially targeted commissioning the project by late 2027 or early 2028.
However, the company now expects a delay of six to eight months, with the possibility of further slippages.
According to Koushik Chatterjee, Executive Director and CFO of Tata Steel, the National Grid has informed the company that its connectivity project is running behind schedule.
High-capacity electricity is essential for operating the new facilities, making the power connection a key requirement for the transition.
Work at Port Talbot continues
Despite the delay, work on the project is progressing.
Major demolition activity at the Port Talbot site has already been completed, while fabrication of equipment is continuing.
The project involves several agencies.
Key entities involved
- National Energy System Operator (NESO): Oversees connection contracts and grid operations.
- National Grid Electricity Transmission (NGET): Responsible for building and maintaining the physical infrastructure.
- Electricity System Operator (ESO): Signed an agreement with Tata Steel in May 2024.
Green steel transition
The Port Talbot project will replace the site’s traditional blast furnaces, which have already been shut down.
At the centre of the project is a 3.2-million-tonne Electric Arc Furnace (EAF).
The decarbonisation programme has received £500 million in support from the UK government.
Expected environmental benefits
Once operational, the project is expected to:
- Cut site-level carbon dioxide emissions by 90 percent
- Reduce emissions by around 5 million tonnes of CO2 annually
Minor fire at the site
The Port Talbot facility also witnessed a fire on June 3.
All personnel were evacuated safely and no injuries were reported.
Tata Steel said it is working with the UK government, National Grid and the ESO to minimise the impact of the power-related delays.
About Tata Steel
Tata Steel operates across the steel value chain, from mining iron ore and coal to producing and distributing finished steel products.
TL;DR
Tata Steel’s £1.25 billion Port Talbot green steel project in the UK could be delayed by six to eight months because of high-voltage power connection issues. The project includes a 3.2-million-tonne electric arc furnace and aims to reduce emissions at the site by 90 percent.
AI summary
- Tata Steel’s Port Talbot project may face a six-to-eight-month delay.
- High-voltage power connectivity issues are behind the setback.
- The project involves a 3.2-million-tonne electric arc furnace.
- The UK government has committed £500 million to the project.
- The facility is expected to cut emissions by 90 percent.
