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

Here is a story making headlines in the economy: Tata Steel says new £1. 25bn furnace may be delayed due to electrical issue20 minutes ago Share Save Add as preferred on GoogleAndy GourlayBBC WalesReutersThe new electric arc furnace was supposed to be up and running by 2027Plans 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 and running by the end of 2027, replacing the traditional blast furnaces which closed 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 that boss Koushik Chatterjee warned investors during a conference call last month that problems with electrical connectivity might put the project back.

Economic Details

Getty ImagesTata's Port Talbot site pictured in 2025Chatterjee said the project was progressing with major demolition work completed, and that "securing access to high power electricity is critical for our planned transition". "While we are working with the electricity system operator and 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 and the UK government on resolution of the issues.

"Asked about how long the delay might be, Chatterjee, Tata's executive director and 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 and its electricity supplier to "see if we can mitigate". Tata Steel carried out a controlled demolition of an empty gas holder on its Port Talbot site earlier in JuneIn a statement, Tata said, as with many major projects, "timelines continue to evolve as detailed engineering, construction and infrastructure work progresses".

It said it was "discussing potential adjustments to the commissioning timetable" with its partners "to deliver the project safely and 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 and planning considerations had contributed to the delays although "good progress is being made".

Financial markets are tracking the development closely as investors assess the likely impact.