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The steel industry is playing an essential role in manufacturing the structures that facilitate the production of renewable energy – especially in the cases of solar and wind power generation, sources said.
“Each new megawatt (MW) of solar power requires between 35 and 45 tonnes of steel, and each new MW of wind power requires 120 to 180 tonnes of steel,” a case study published by ArcelorMittal said.
According to the International Energy Agency’s (IEA) latest report, “World Energy Investment 2022,” published in June, green technologies such as wind and solar photovoltaic (PV) energy remain the cheapest options for new power generation in many countries, even before accounting for the spike in oil and gas prices in 2022.
Solar PV takes up “almost half of new investment” in renewable power, the IEA report said, and for wind power, the focus is shifting from onshore deployment to offshore, with 2021 being a record year for offshore. More than 20 gigawatts (GW) of offshore wind power was commissioned that year, and the expenditures reached approximately $40 billion, the IEA said.
In the 2010s, many world-renowned steelmakers launched unique products designed for high strength and high durability. These characteristics are essential for solar and wind structures, which are constantly exposed to extreme weather conditions.
ArcelorMittal, for instance, is providing a spectrum of steel products suitable for wind turbine constructions. Their Special Bar Quality steels, Quarto plate, and higher strength hot-rolled coil, Amstrong, are all widely used in manufacturing wind tower structures.
PosMAC (POSCO Magnesium Alloy Coating Product), a specialized galvanized steel created by POSCO, is a corrosion-resistant product that is five to ten times more resistant than a normal hot-dip galvanized steel sheet with the same coating weight. It has been extensively used for photovoltaic support frames, its product brochure says.
Magnelis by ArcelorMittal and MagiZinc by Tata Steel are also examples of steel products with high corrosion resistance which are widely used in solar farms.
China’s National Development and Reform Commission (NDRC), together with its National Energy Administration (NEA), published an action plan on May 30 to support high-quality development of renewable energies in the country and accelerate the construction of a low-carbon, safe and efficient energy system.
The total installed capacity of wind power and solar power should reach more than 1.2 billion kilowatts (kw) by 2030, according to the action plan.
“China’s ambition of developing large-scale green power and reducing dependence on fossil fuel is making solar and wind power very popular,” a trading source based in Shanghai told Fastmarkets. “Those two are probably by far the most developed renewable technologies. Steelmakers in China are surely going to play an important part in renewable power generation when it comes to installations of solar panels and wind turbines.”
The central government emphasized in the action plan that to reach the 1.2-billion-kw-capacity goal, China should accelerate the construction of large-scale wind-power and solar-photovoltaic bases in desert areas.
In recent years, major mills in China have already been making progress in supplying products that are specially designed for renewable power generation, contributing to global efforts to reduce greenhouse gas and slow down global warming.
Major Chinese producers Baosteel and HBIS, for instance, have both successfully developed high-strength and high-corrosion-resistant hot-rolled products used in solar panel mounting systems. As an important component of photovoltaic power generation systems, solar panel mounts are gaining more market interest.
The specialized products supplied by Baosteel are already widely used in the market, and the quality is highly recognized by some leading solar PV companies, the company’s secretary to the Chairman said on the firm’s investor relations platform on May 30.
Surging investments in renewable energy projects in China are sending a bullish signal to the country’s steel sector, especially regarding the high-strength and high-durability steel products suitable for solar and wind power generation structures, market sources said.
Mills in other parts of the world are also making use of their distinctive specialties to grab business opportunities brought by energy transition.
Kobe Steel, a major Japanese steel manufacturer, said in its Integrated Report 2021 that one of its renewable energy initiatives for the 2020-2030 decade is to work on the development and commercial application of high-efficiency welding processes and optimal welding materials to support offshore wind projects in Japan.
Clean energy investment is starting to pick up and is expected to exceed $1.4 trillion in 2022, accounting for almost three-quarters of the growth in overall energy investment, the IEA report said.
One reason for the investment growth, IEA said, is the policy and fiscal measures enacted to support energy transition, often as part of efforts to ensure sustainable post-pandemic recoveries.
In May, amid the ongoing Covid-19 situation and China’s stringent zero-tolerance policy, infrastructure and industrial investment were among the few initiatives taken to support the country’s economy during lockdowns imposed in some of China’s major cities.
Retail sales in May contracted by 6.7% year on year, the latest data published by China’s National Bureau of Statistics (NBS) showed. Among all retail businesses, catering took the hardest hit, with income decreasing by 21.1% year on year in May.
But investment in infrastructure and the industrial sector increased by 6.7% and 11.1% respectively in the first five months of 2022 compared with a year earlier. Investment in electricity, heat, gas and water production and supply increased by 11.5% in May year on year, NBS data showed.