3 hours ago
8
Trade unions have called for the government to intervene to speed up Tata Steel’s connection to the electricity grid in south Wales, after the company said its new furnace would be delayed by up to a year.
Tata Steel last month told investors that National Grid had said it would face a six- to eight-month delay. That could stretch to 12 months amid unexpected engineering difficulties.
The delay will add to the complications facing one of the UK’s most important industrial building projects. The companies are looking at options to speed up the connection including changing the order of works, and installing a smaller, interim electricity supply so that Tata Steel can begin testing.
Tata Steel shut its blast furnaces in Port Talbot, south Wales, in September 2024, making 2,000 people redundant as it prepared to shift to a less polluting electric arc furnace.
The Indian conglomerate has been pledged £500m in government subsidies to build the 3m tonne electric arc furnace, which will notably reduce the UK’s carbon emissions. It had been hoped the new furnace would be operating by late 2027.
However, National Grid, the listed company that runs much of the UK’s electricity infrastructure, said the crucial connection to the grid has run into problems including unsuitable ground conditions, and planning and environmental issues. National Grid has faced persistent criticism over the length of the backlog of projects waiting for connections.
The Community, Unite and GMB unions representing steelworkers said the government should step in.
Roy Rickhuss, general secretary at Community, said: “This is concerning news and we are seeking urgent clarification. Jobs and livelihoods are dependent on this vital project progressing on time. Our members and the wider community in Port Talbot demand this.
“A secure supply of energy is absolutely critical to the decarbonisation agenda. It is vital that the government, National Grid and Tata Steel swiftly resolve any issues causing delays.”
The delay adds to the problems facing Tata Steel’s UK business, after a fire last week destroyed part of the remaining Port Talbot operations, known as the pickle line, that removes surface impurities. Nobody was hurt in the large fire, and Tata is now looking to reopen another pickle line in Llanwern, near Newport, in south Wales.
Koushik Chatterjee, Tata Steel’s chief financial officer, said National Grid had warned initially that the electricity delay could be as long as 18 months, according to a transcript of last month’s call with investors collected by data company Alphasense. The comments were first reported by Kallanish Commodities, an industry news site.
National Grid is a £60bn member of the FTSE 100, meaning the government has no ability to direct its investments. National Grid was privatised in 1995.
The Unite general secretary, Sharon Graham, said its failure to install the Port Talbot connection on time showed that it “acts only in the interests of its shareholders – not the wider UK economy”, and called for the firm to be nationalised.
“The national grid is systematically failing businesses seeking to maintain and increase employment and expansion plans,” she said.
Charlotte Brumpton-Childs, national secretary at GMB, said: “The transition at Port Talbot has been painful for the local community and workers can’t be kept in the dark on developments at the electric arc furnace.
“National Grid needs to get its act together to deliver this project and put an end to the uncertainty felt by workers, their families, and the wider community.”
A Tata Steel spokesperson said the companies are “still discussing potential adjustments to the commissioning timetable” but said it had already reached several “key milestones in the construction phase”.
A National Grid spokesperson said: “We recognise the importance of this project and are committed to delivering the connection safely and quickly. Construction is underway and good progress is being made, and we have been working constructively with Tata Steel and government to explore options to accelerate the programme.
“This is a major, multimillion pound programme involving complex engineering, subject to environmental and planning considerations which require careful design and delivery.”
