Salzgitter Contracts 147 MW of Solar With Battery Storage for Low-Carbon Steel

Salzgitter Flachstahl GmbH, a subsidiary of German steelmaker Salzgitter AG, has signed a long-term power purchase agreement with renewable energy developer Zelestra covering 147 MW of solar capacity combined with battery storage. According to marketsteel.de, it is the largest hybrid solar-plus-storage PPA concluded in the German market to date.

Two hybrid sites in Brandenburg and Thuringia

The agreement spans two projects that Zelestra will build and operate, each pairing a solar plant with directly coupled battery storage. One installation is located in Brandenburg, the other in Thuringia. Salzgitter takes the combined output of both sites and itself controls the operation of the batteries, marketsteel.de reported.

• 147 MW of contracted solar capacity across two hybrid installations
• 158 GWh of electricity supplied per year
• 79 MW / 237 MWh of battery storage, directly connected to the solar plants
• Batteries charged exclusively with surplus solar power from the same projects

The structure lets the steelmaker shift delivery in time instead of taking power only when the sun is shining: storage is used to align the supply profile with actual consumption. For both companies it is the first hybrid PPA in the German market, and the first time Salzgitter operates a battery storage asset.

Battery dispatch sits with the steel buyer

Placing battery dispatch with the offtaker rather than the developer changes what an industrial PPA delivers. A conventional solar contract supplies electricity along the generation profile, leaving the buyer to cover the remaining hours from the grid or other contracts. With 237 MWh of storage under its own control, Salzgitter can move part of the contracted volume into hours when its own demand makes it more valuable, while the restriction to charging from surplus solar keeps the delivered electricity fully renewable.

The company frames hybrid contracts as a procurement tool rather than a one-off transaction. "The combination of solar energy and battery storage opens up the possibility for us to procure renewable energy for our industrial processes as needed and on competitive terms," said Marco Hauer, Head of Group Energy Procurement at Salzgitter Flachstahl GmbH. He added that the agreement supports the company's decarbonisation of steel production and helps secure the competitiveness of the Salzgitter site.

Power supply for the SALCOS transformation

The contracted volumes are earmarked for the transformation of steel production under SALCOS. According to marketsteel.de, hybrid PPAs are an important building block for Salzgitter Flachstahl in covering its rising green power requirement over the long term and at competitive cost. Because low-carbon steelmaking replaces coal-based process inputs with electricity, the price and availability of renewable power feed directly into the cost of the finished product, which is why long-term supply contracts now sit alongside plant investment in the transformation programmes of European steelmakers.

For Zelestra, the agreement underlines rapid expansion in Germany. The developer is advancing more than 2 GW of solar, hybrid, wind and storage projects in the country, which it treats as a core market. "As the largest hybrid deal in Germany so far, it demonstrates the ambition of both partners, and we expect this market segment to grow considerably in the coming months," said Mathias Kunicke, CEO of Zelestra in Germany. He said the deal builds on hybrid expertise the company developed in other European markets and comes as Salzgitter takes an important step toward commercial production of green steel.