Tata Steel has announced that the opening of its new electric arc furnace at the Port Talbot steelworks could be delayed by up to 12 months due to issues with securing a sufficient electricity supply. The £1.25 billion project, partly funded by the UK Government, aims to replace the historic blast furnaces with one of the largest electric arc furnaces in the world. However, delays in connecting to the National Grid have pushed back the start date.
Power Supply Challenges
Tata Steel's chief financial officer, Koushik Chatterjee, stated that the initial delay estimate of 18 months has been reduced to 12 months, and the company is working to further minimise it. "Securing access to high-power electricity is critical for our planned transition," he said. "National Grid has formally alerted us that their connectivity project is delayed. We are in conversation with National Grid and the UK Government to resolve these issues."
Mr. Chatterjee noted that the delay could range from six to eight months after the plant is built, but he expressed hope for further reductions. The company is collaborating with partners including the UK Government, National Grid, and its electricity supplier to mitigate the impact.
Preparatory Work and Ramp-Up Plans
During a recent call, CEO TV Narendran revealed that the company is exploring options to connect at least one power line as soon as the plant is ready to allow trials and equipment testing. "We are planning to compress the ramp-up schedule after commissioning to catch up on the project timeline," he said. Chatterjee added that fixed costs in the UK have fallen by 50% over the past two years.
Before the power access delay, the operational estimate was late 2027 or early 2028. The National Grid is constructing a new substation at its Margam site and a second 275kV substation on Tata Steel's Port Talbot site, requiring new supergrid transformers and a 2km underground cable. Ground conditions, environmental, and planning considerations have caused delays, but work has been ongoing since September.
Background on the Project
Tata Steel's decision to shut the two blast furnaces at Port Talbot, ending primary steelmaking in Wales, was driven by cost-cutting and decarbonisation goals. The last blast furnace closed on September 30, 2024, ending 100 years of primary steel production. The site is being transformed around the electric arc furnace to recycle used steel, a move that led to 2,800 job losses, with 2,162 employees leaving between September 2024 and July 2025.
Tata has reported losses of £4 billion in Port Talbot since 2007. The new furnace aims to ensure a "financially and environmentally sustainable future" and reduce carbon emissions by 90%. The UK Government contributed £500 million to the project. A Tata spokesperson said timelines are evolving as engineering and construction progress, and key milestones have been met, with major components like EAF shells and the Consteel conveyor set to ship soon. National Grid reaffirmed its commitment to delivering the connection safely and at pace, with construction underway.
