Tata Steel is seeking discussions with the UK government over delays in securing power for its planned electric arc furnace at Port Talbot, Wales, a setback that could affect the delivery schedule of the company’s major industrial decarbonisation project.
Tata Steel CEO TV Narendran said the company was in conversation with the UK government about the issues affecting timely implementation of the project. He was responding to questions on the future course of action for the facility at the 53rd National Management Convention organised by the All India Management Association.
“There is no delay from Tata Steel in construction” of the project, Narendran said, referring to the 3.2 million tonne electric arc furnace being built at an investment of £1.25 billion. He added that the company was discussing with the government what could be done to address the concerns.
The immediate issue is access to electricity. Tata Steel had signed a connection offer with the Electricity System Operator in May 2024. Under that agreement, National Grid is to build new electrical infrastructure capable of supplying the electric arc furnace by the end of 2027.
In August, Narendran said Tata Steel UK was expecting to secure access to electricity for the 3.2 million tonne furnace by 2029. The difference between the infrastructure agreement’s stated 2027 target and the company’s later expectation of power access by 2029 highlights the importance of grid readiness to the project’s operating timeline.
The electric arc furnace is intended to replace the existing coal-based blast furnace route at the Port Talbot site. Tata Steel has said the project is supported by £500 million in government funding and aims to reduce site-level carbon dioxide emissions by 90 per cent, equivalent to about five million tonnes annually.
The project illustrates how the transition from conventional steelmaking to electric production depends not only on a company’s construction programme but also on the availability and timing of surrounding power infrastructure. A large electric furnace requires a reliable, high-capacity grid connection, making transmission upgrades and connection agreements critical implementation milestones.
Asked whether Tata Steel had sought fresh funding from the UK government, Narendran did not deny the possibility but said it was too early to say where the discussions stood. He said the company was sharing its concerns with the government.
The timing of the power connection is significant for the Port Talbot site, where the furnace is expected to provide the production capacity associated with the project while lowering emissions from the steelmaking process. The supplied report did not provide a revised commissioning date or specify the precise cause of the delay in securing electricity.
Narendran also said international steel markets were still struggling, while demand in India was rising. He said Indian steel demand was strong and prices had started moving up over the previous six to eight weeks, even as coking coal prices had increased by $50-60 per tonne.
The next step is a further discussion between Tata Steel and the UK government on the power-supply concerns and the wider status of the Port Talbot project. No final decision on additional funding or a revised implementation schedule was announced in the supplied report.
