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An enormous array of over 750,000 solar panels blankets the prairie landscape in Pueblo, Colorado, providing clean energy to one of the largest electricity-based steel mills in the country.
The Rocky Mountain Steel mill, which opened in 1881, today uses electricity instead of coal to produce steel rails and pipes. In late 2021, it became the first and largest solar-powered steel plant in the United States — and possibly the world — when electricity began flowing from the 300-megawatt Bighorn Solar project next door, supplying roughly 90% of the power used by the facility’s electric arc furnace.
The storied steel mill recently marked a different kind of milestone. Atlas Holdings, a private-equity firm in Connecticut, said last month that it plans to acquire Evraz North America, which owns the facility in Pueblo as well as steelmaking operations in Portland, Oregon, and Western Canada. The sale is expected to close later this year.
“This [is] a major investment in creating a more vibrant domestic steel production industry right here in the United States and Canada,” Sam Astor, a partner at Atlas, said in a June 27 news release.
The deal, which could reach up to $500 million, arrives at a complex moment for U.S. steelmakers working to decarbonize their facilities.
Recent U.S. efforts to build cutting-edge, low-emissions ironmaking facilities that use green hydrogen — made with renewable power — have all but vanished due to challenging economics and shifting political tides. Building large clean-energy projects like Bighorn Solar to power industrial sites just got much harder to do under the megabill that President Donald Trump signed into law this month, which slashes incentives for and imposes restrictions on wind and solar.
At the same time, the nation’s steel industry is slowly getting cleaner as manufacturers invest in new capacity that relies on electricity and fossil gas, not coal. And Rocky Mountain Steel is no longer the country’s only solar-powered steel plant. U.S. Steel’s Big River Steel mill in Arkansas draws from the 250-MW Driver Solar project, while steelmaker Nucor Corp. has a deal to buy 250 MW of power from the Sebree Solar farm under construction in Kentucky.
Steel is an essential material used to make everything from railroads, bridges, and buildings to solar-panel racks, electric vehicles, and grid components. Producing the high-strength metal is currently an extremely dirty business, responsible for as much as 9% of global carbon dioxide emissions and a significant amount of harmful local air pollution.
That’s because most steel production globally involves burning copious amounts of coal in a blast furnace to turn raw iron ore into iron; the iron is then made into steel in a separate furnace. The United States still operates a dozen blast furnaces, which account for roughly 30% of the country’s annual steel production.
The remaining 70% of U.S. steel output comes from electric arc furnaces, including the hulking unit at Rocky Mountain Steel’s facility, which is capable of producing 1.1 million tons of steel per year. These power-hungry furnaces turn scrap metal into a glowing orange liquid that is then transformed into recycled steel parts.
Producing steel this way can curb CO2 emissions by up to 75% compared to traditional coal-based methods, according to industry research. However, the carbon intensity of steel made in an electric arc furnace depends on the electricity used — and most of the 100-plus such facilities operating in the U.S. rely primarily on coal- and gas-fired electric grids.
Until a few years ago, Rocky Mountain Steel got its power from Xcel Energy’s coal-fired power plant in Pueblo.
Lightsource bp financed, owns, and operates the neighboring $285 million Bighorn Solar project. The developer sells the electricity it generates to Xcel under a 20-year power purchase agreement; the utility then provides power to Evraz North America for the steel mill. When the 1,800-acre solar array came online in late 2021, Bighorn became the nation’s largest on-site solar facility dedicated to a single customer.
“This project proves that even hard-to-abate sectors like steel can be decarbonized when companies come together with innovative solutions,” Kevin Smith, who was then the CEO of Lightsource bp, Americas, said in an October 2021 press release. The fixed-rate power agreement gives the mill’s owner “the low, predictable electricity prices it needs to stay in Pueblo and invest in its future there, keeping more than 1,000 jobs in the local community,” according to the release.
Evraz North America first announced plans to sell its assets in August 2022 after its parent company, Evraz plc, was sanctioned by the British government following Russia’s invasion of Ukraine. Evraz plc is part-owned by a Russian oligarch.
Atlas Holdings, the firm acquiring Evraz North America, didn’t immediately return questions this week about whether the sale would affect the solar-power agreement in Pueblo. However, Atlas noted in its June 27 news release that the “Pueblo steel mill stands as a remarkable testament to commitment to sustainability” owing to the solar project.
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