US steel manufacturer Nucor has signed a power purchase agreement (PPA) with US power company NextEra Energy to acquire 250MW from the latter’s upcoming Sebree Solar project in Kentucky.
The Sebree project has a total capacity of 400MW and is being developed by subsidiaries of NextEra Energy Resources, itself a subsidiary of NextEra Energy. While neither company announced the duration of the deal or the finances involved, NextEra Energy will be keen to generate profits from the project, having invested US$452 million into the facility.
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“This solar energy project will generate low-cost, homegrown energy and provide millions of dollars in additional tax revenue to Henderson County over the life of the project,” said Rebecca Kujawa, president and CEO of NextEra Energy Resources. “Constructing our project from steel made sustainably and locally will help drive economic development in Kentucky.”
Nucor’s involvement in the project goes beyond signing the PPA, with the metals manufacturer providing steel for the first phase of the project and contributing to what Kujawa called Nucor’s “sustainability goals”. Construction will begin in autumn this year, and Nucor expects the work to be completed in December 2025.
The metals company will also provide steel for another solar project, to be built and operated by NextEra Energy Resources subsidiary Green River Solar, which will have a capacity of 200MW.
“Our country’s energy transition will be built with steel and the steel it is built with should be produced sustainably,” said Greg Murphy, executive vice president of business services and general counsel at Nucor. “And while Nucor is already among the world’s cleanest and most sustainable steel producers, this agreement will enable us to further reduce our climate footprint and meet our goals for improvement.”
The decarbonisation of the steel industry could make a significant difference to the world’s climate. According to the World Steel Association, steelmaking was responsible for around one-tenth of global greenhouse gas emissions in 2021.
Sustainable steel production relies on the adoption of electric arc furnaces, facilities which can take the place of coal-fired blast furnaces to smelt iron ore. The global steel industry has adopted an increasing number of such furnaces over recent years, with electric arc furnaces accounting for one-quarter of global steel production in 2012, increasing to 30% this year.
While Nucor has not specified how the electricity from NextEra’s solar project will be used, deals such as these, which introduce more renewable energy to the steel sector, are an encouraging development.
The news follows NextEra’s publication of its financial results for the second quarter of this year, which saw the company add 1.2GW of new solar PV capacity.