Tata Steel UK EAF faces 6-8 month 2027 power delay

What changed at Port Talbot

Tata Steel may have to defer the timeline of its £1.25 billion UK transition project by around six to eight months due to delays in securing access to electricity. The project is centred on building a 3.2 million-tonne electric arc furnace (EAF) at Port Talbot, replacing traditional blast furnace steelmaking. The company said the delay risk stems from high-voltage connectivity and associated infrastructure works that sit outside its direct control. Tata Steel is working with the UK government, the Electricity System Operator (ESO) and National Grid to mitigate the slippage. Until the power connection issue is resolved, the company’s commissioning plan for the EAF could shift beyond its earlier expectations.

CFO flags National Grid connectivity delay

Koushik Chatterjee, Executive Director and Chief Financial Officer at Tata Steel, said the company has been formally alerted by National Grid that the connectivity project is delayed. Tata Steel is coordinating with ESO and National Grid for the new electrical infrastructure required at the site. Chatterjee said major demolition work at Port Talbot has been completed and that fabrication and delivery of equipment are continuing. But he underscored that access to higher-power electricity is critical to the planned transition. He also indicated that the delay could be six to eight months, and possibly higher, after the plant is built, while Tata Steel tries to reduce the impact. The company did not share further details on the mitigation plan beyond ongoing discussions with the relevant agencies.

The ESO connection offer and the end-2027 target

In May 2024, Tata Steel signed a connection offer with ESO. Under the agreement, National Grid is to build new electrical infrastructure capable of powering the 3.2 million-tonne EAF by the end of 2027. Before the present issue over power access surfaced, Tata Steel was looking to begin EAF operations by late 2027 or early 2028. The current delay risk directly challenges that earlier window because the EAF’s commissioning is tied to high-capacity power availability. The company’s comments suggest that civil and equipment work can continue, but grid readiness remains the gating factor.

Shift away from blast furnaces and imported slabs

The transition at Port Talbot is designed to move production away from blast furnaces to EAF-based steelmaking. The blast furnace, described as the last of Tata Steel’s legacy steelmaking assets, went cold on September 30, 2024. During the interim, Tata Steel is servicing customers with imported slabs sourced from multiple geographies, including India, the Netherlands, Europe and South East Asia. This marks a major operational change from what was earlier a 2.5-3 mt plant running on inputs such as iron ore, coal, fluxes, oxygen and power. The imported-slab model adds complexity until primary steelmaking resumes under the EAF plan.

Funding structure and what it does not solve

The £1.25 billion transition is part-funded by about £0.5 billion from the UK government. However, the reported grid delay highlights that grant support and internal execution do not remove dependencies on third-party infrastructure delivery. The article text also noted that a longer timeline can affect production efficiency in the transition period, even if the subsidy supports accounting and project funding. Tata Steel’s leadership has focused on resolving the connectivity problem with the UK government, National Grid and ESO, but acknowledged imminent delays.

Labour government backdrop and closure commitments

Separately, Tata Steel has said it would continue with shutdown plans at Port Talbot even as the UK’s new Labour government took office. In a Q1 result statement, CEO and MD T V Narendran said one blast furnace had been safely ceased and the company was on track to close the remaining blast furnace by September 2024. The earlier support framework referenced a £0.5 billion financial package agreed under the previous Conservative government for the green steel transition.

Industrial relations and restructuring timeline

Tata Steel UK has also linked its broader restructuring to firm dates for winding down heavy-end operations. The company’s proposal set Port Talbot’s two blast furnaces, No.5 and No.4, to close by end-June and latest by end-September, respectively. Following the closure of Blast Furnace No.4, the remaining heavy end assets are expected to wind down, and the Continuous Annealing Processing Line is scheduled to close in March 2025. Tata Steel said it had progressed to an advanced stage of engineering and expected to place equipment orders for the EAF by September 2024, with construction expected to begin by August 2025 based on permitting timelines. The same update said Tata Steel UK had accepted a revised and updated connection offer from National Grid and would finalise documents in the coming days to keep power infrastructure in place to commission the EAF on schedule by end-2027.

Trade pressure: US tariff question tied to EAF timing

The article text also pointed to trade risks around the UK steel supply chain. The US may maintain 25% tariffs on some or all steel imports from the UK if specific guarantees are not provided regarding Port Talbot. The Trump administration was described as seeking assurances given the closure of blast furnaces and the interim reliance on imports until the planned 2027 opening of the EAF. The request reportedly includes clarity on the EAF launch date and when imports of raw material from abroad would stop.

Operational reminder in India: Jamshedpur outage

In a separate development, Tata Steel said a brief power outage affected parts of Jamshedpur, including its steel plant, and emergency protocols were activated. The company stated there was no fire at Jamshedpur Works and that the situation was fully under control. It also said power was restored later at Tata Main Hospital and operations were normal. Tata Steel Utilities and Infrastructure said the outage was caused by an issue in a DVC grid and that immediate action was taken.

Key facts at a glance

Market impact: why electricity access is the binding constraint

The central issue is that EAF commissioning depends on high-capacity electricity connectivity being delivered on time. Tata Steel says equipment fabrication and delivery are continuing, and site demolition has largely been completed, but grid readiness can still push back the operational start. The delay is therefore not presented as a problem with the furnace build alone, but with external infrastructure timelines. In parallel, the company is managing a customer supply chain based on imported slabs until primary steelmaking restarts. The text also flags that trade discussions can become more sensitive when supply chains shift from domestic steelmaking to imported inputs.

Conclusion

Tata Steel’s Port Talbot decarbonisation plan remains anchored to an end-2027 infrastructure target, but National Grid’s connectivity delay has opened the door to a 6-8 month pushback in commissioning. The company says it is working with the UK government, ESO and National Grid to mitigate the slippage, while continuing on-ground execution and managing interim slab imports. The next meaningful update for investors is likely to hinge on confirmed timelines for grid connectivity and any revised commissioning schedule communicated by Tata Steel and UK power agencies.