Liberty to invest £700m in new 'green steel' strategy

Lochaber power
Some of the new power generation will come from expanding existing hydropower generation in Scotland

Steel-maker Liberty House is about to launch a massive green investment campaign as it looks to quadruple production capacity.

Liberty’s parent GFG Alliance will this week begin a three-year, £700m spending spree on renewable green power assets via its energy arm Simec.

The privately held business is expected to announce a £35m investment to expand its existing hydro power generation facilities around its aluminium plant at Lochaber, in the Scottish Highlands.

Later this week a second deal to buy another green energy supplier is expected. Sources close to GFG said the goal is not only to gain control of its assets, but also staff who have extensive experience in rolling out renewable power generation projects.

Their know-how is seen as crucial in developing further green energy projects needed to provide the extra 500 megawatts of generation required to power Liberty’s ambitious expansion plans. The company is also planning a £170m wind farm in Scotland.

steel worker
The extra power will be used to fuel Liberty's steel-making ambitions

Last week, Liberty, which is led by entrepreneur Sanjeev Gupta, said it wanted to raise its steel-making capacity from the current 1.1m tons a year to 5m, a level which would make the company responsible for about half of the UK’s current total production.

It wants to do this through its “green steel” initiative, recycling scrap steel instead of producing it from scratch through polluting coal-fired blast furnaces. Liberty wants to use electric arc furnaces to melt the steel but these need immense amounts of power.

GFG currently has about 500 megawatts of power generation capacity from its biomass-fuelled power station in Uskmouth, South Wales, other biodiesel generators around the country, and hydropower generators in Scotland.

Jay Hambro, GFG chief investment officer, said: “We have serious green power ambitions to achieve the green steel targets.”

The company has expanded at breakneck speed over the last year, spending £1bn snapping up distressed industrial and energy assets, with staff numbers ballooning to about 5,500.

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