Tata Steel says new £1.25bn furnace may be delayed due to electrical issue

Plans for a £1.25bn electric steel-making furnace in Port Talbot may be delayed for up to eight months due to problems with electrical connectivity. Tata Steel has warned.

The new electric arc furnace was hoped to be up. running by the end of 2027, replacing the traditional blast furnaces whichclosed two years ago with the loss of 2,000 jobs.

Tata Steel is working with the National Grid to upgrade electrical infrastructure and support the new electric arc furnace.

But it has emerged. boss Koushik Chatterjee warned investors during a conference call last month that problems with electrical connectivity might put the project back.

Chatterjee said the project was progressing with major demolition work completed,. that "securing access to high power electricity is critical for our planned transition".

"While we are working with the electricity system operator. the National Grid for new electrical infrastructure, National Grid has formally alerted us that their connectivity project is delayed.

"This is critical for Tata Steel UK for the project commissioning, we are in conversation with National Grid. the UK government on resolution of the issues."

Asked about how long the delay might be, Chatterjee, Tata's executive director. chief financial officer, said: "Somewhat between, say, six months to eight months will certainly be there, maybe higher, after we have built the plant."

He said the company was working with partners including the UK government, the National Grid. its electricity supplier to "see if we can mitigate".

In a statement, Tata said, as with many major projects, "timelines continue to evolve as detailed engineering, construction. infrastructure work progresses".

It said it was "discussing potential adjustments to the commissioning timetable" with its partners "to deliver the project safely. as quickly as possible".

National Grid said the work involved constructing two new substations, installing transformers as well as laying 2km of underground cables.

But issues with ground conditions as well as environmental. planning considerations had contributed to the delays although "good progress is being made".