The Brazilian state of Bahia will see the construction of a new 554 MW wind power farm. The project, named Babilonia, will be developed by a JV established for this purpose between steelmaking company ArcelorMittal Brazil and Casa dos Ventos, developers and operators of renewable energy projects.
Under the joint venture partnership, ArcelorMittal Brazil will hold a majority stake of 55 percent and Casa dos Ventos the remaining 45 percent. “As well as making climate sense, this project makes financial and operational sense. It reduces electricity costs and provides energy security to our Brazilian business and will deliver consistent, attractive long-term returns,” states Aditya Mittal, CEO, ArcelorMittal.
Capacity expansion and growth in Brazil
The Babilonia project complements ArcelorMittal’s organic growth in downstream operations in Brazil and its acquisition of Companhia Siderúrgica do Pecém, completed in March 2023. In addition to being a production facility for high-quality slab, CSP also provides expansion potential for new steelmaking (including DRI production), rolling and finishing facilities.
“These expansion plans will lead to a natural increase in our energy requirements. This project will help to prepare us for the future, ensuring we secure our long-term energy requirements in a responsible, sustainable and cost-effective manner,” Jefferson de Paula, President, ArcelorMittal Brazil, adds.
The Babilonia project
Reasons for the selection of the site for the Babilonia project include high-capacity forecast load factors and infrastructural aspects such as short distance to the national electricity grid. The potential to add solar power capacity of about 100 MW has also been considered in the selection process. Construction is expected to start before the end of this year, with the plant scheduled to come on stream in 2025. It is estimated to cover around 38 percent of ArcelorMittal Brazil’s electric power requirements by 2030. The supply will be based on a 20-year purchase agreement between ArcelorMittal Brazil and the JV.
Green energy partnerships
Before this wind farm project in Brazil, ArcelorMittal already entered into two other international green energy partnerships in 2022: first, with the Greenko group in India for the development of a 975 MW solar and wind power project to supply AM/NS India, ArcelorMittal’s Indian steelmaking JV; and, second, in Argentina, a partnership with PCR for a solar and wind power project that is set to cover more than 30 percent of ArcelorMittal’s local electricity needs.
Faster progress towards climate targets
Aditya Mittal further commenting on the project: “By collaborating with a respected energy transition operator in Casa dos Ventos, we can take advantage of the favourable Brazilian climate for renewable energy generation and make faster progress towards our climate targets.” In its second Climate Action Report (CAR2), ArcelorMittal defines as its new 2030 Group target a 25 percent reduction of its Scope 1 and 2 CO2 emissions from its 2018 level.