Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Climate Tech

Electra Raises $186 Million to Decarbonize Steel

The company has developed a low-temperature refining process that’s similar to the one used for copper, nickel, and other metals.

Green steel.
Heatmap Illustration/Getty Images

Energy use in the iron and steel industry accounts for about 7% of global greenhouse gas emissions — that’s more than it takes to power commercial buildings, more than twice the emissions of the entire cement industry, and nearly four times as much as the aviation sector. Steel-related emissions are so high primarily because melting and refining iron ore, the base metal of steel, requires extremely high temperatures, which has typically come from burning coke — derived from coal — in blast furnaces.

Electra, a Colorado-based startup, is building momentum around a low-temperature electrochemical approach to iron refining that stands to drastically reduce emissions, and on Thursday announced a $186 million Series B funding round. The company’s battery-like devices would electrify the steelmaking process while their relatively small size could move the industry towards a more modularized, “Lego block” approach, negating the need to build a huge facility all at once.

If it works, there’s a lot of money to be made. “The steel industry is so big,” Electra’s CEO, Sandeep Nijhawan, told me. “We're talking about a $1 trillion a year market, and something like $600 billion of iron-making that has to happen every year.” The company’s latest funding round was led by the Singaporean investment firm Temasek Holdings and the sustainable investment firm Capricorn Investment Group.

Electra can refine iron at just 60 degrees Celsius — cooler than your average cup of coffee and orders of magnitude cooler than the 1,600 degrees Celsius that traditional steelmaking requires. This low-temperature approach is particularly conducive to working with renewables, as the process can be easily started and stopped in tandem with the availability of wind and solar resources. That’s not the case for high-temperature systems such as the one used by green steel startup Boston Metal, which works with molten ore that must be kept extremely hot at all times, lest it harden.

First, Electra’s process involves dissolving iron ore in an acidic solution at near room temperature, which separates the iron from impurities in the ore such as alumina and silica. Then an electric current is passed through the solution, which causes a chemical reaction that deposits the pure iron onto stainless steel sheets, a much lower-temperature process than refining iron in a blast furnace. Electra’s steelmaking partners then convert the sheets of iron into steel via an electric arc furnace, which has the potential to be nearly emissions-free if powered by renewables.

The process isn’t actually so different from the way other metals such as copper, zinc, nickel, or cobalt are produced, Nijhawan told me, and it allows Electra to use contaminated or low-grade iron ores that would otherwise be ill-suited to low-carbon steel production.

The reason it’s taken so long to figure out how to refine iron ore the way we’ve been refining other metals for centuries is because iron can be particularly difficult to work with. For one, it takes a whole lot longer to dissolve in acid than other common metals; one of Electra’s breakthroughs was finding a proprietary way to pre-treat its ores so that they would dissolve more quickly. Secondly, once the iron eventually dissolves, it’s no longer stable, and tends to fall out of the solution before all the impurities are removed. Figuring out how to stabilize the ore by changing its oxidation state was another one of Electra’s breakthroughs. “Putting that system-level package together is where our innovation is,” Nijhawan told me.

This latest funding round will help finance the construction of Electra’s demonstration plant in Colorado, where it already operates two pilot plants powered with 100% clean energy, procured via a renewables program from the local utility, Xcel Energy. The company’s demo plant, which should be operational by early next year, will also run on renewable power from Xcel, while its first commercial plant, planned for the end of the decade, will either be located in an area with high renewables penetration or be powered with help from renewable energy partners, Nijhawan explained.

“Eventually when this scales, you will purpose-build the renewables infrastructure to feed the plant,” Nijhawan told me. Some of the biggest strategic investors in the space have bought into this model of steel decarbonization, including three large iron ore companies — Rio Tinto, BHP, and Roy Hill — as well as two large steel producers — Nucor and the Japanese company Yamato Kogyo. Prominent climate tech investors such as Breakthrough Energy Ventures and Lowercarbon Capital also invested.

Once the process scales, Electra expects its iron to reach cost parity with traditional processes. Scaling-up, of course, is the tricky part, especially as tariffs and the generalized atmosphere of uncertainty is making infrastructure investors clam up when it comes to betting on large, first-of-a-kind projects. Nijhawan told me that so far, Electra’s scale-up strategy that he laid out last year remains unchanged.

“We are trying to replace how iron has been made for centuries with electro-iron, hopefully for decades to come”, he told me, explaining that in this moment of uncertainty, it helps to take the long-term view. “We now have this broad set of investors. Some of them have a 100 year history, they have deep manufacturing experience, and have been through administrations and policy changes. You just have to build a strategy that's built to last.”

Green

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Climate Tech

Climate Tech Companies Are All Data Center Companies Now

Artificial intelligence wants the energy and has the money, and climate tech companies need buyers.

A leaf and technology.
Heatmap Illustration/Getty Images

Their founders wanted to make transmission lines, powertrains, and electrical switches more efficient. Or maybe they wanted to unlock the potential of geothermal energy or low-carbon cement. Wherever they began, a bevy of deep tech climate startups, clean energy producers, and sustainable materials companies have found their way to the same destination: Building and powering data centers in the most energy efficient way possible.

“They might not have started out as data center companies, but they’ve been pulled — because of this huge market movement towards data centers — into being that,” Lee Larson, an investor at the venture firm Piva Capital, told me.

Keep reading...Show less
Green
Climate

AM Briefing: Trump Scythes Grain Belt Funding

On FERC’s ‘disastrous misstep,’ the World Court’s climate ruling, and 127 SMRs

Trump Cuts Off Funding for Grain Belt Power Line
Heatmap Illustration/Getty Images

Current conditions: West African countries including Guinea-Bissau, Guinea-Conakry, Senegal and The Gambia are facing flash flooding from heavy rainfall • The southwestern corner of New Mexico is suffering “exceptional” drought, the highest possible level in the U.S. Drought Monitor. • Already roasting in excessive heat, Des Moines, Iowa, is bracing for thunderstorms.

THE TOP FIVE

1. Energy Department yanks $5 billion guarantee for Grain Belt Express

The Department of Energy canceled a nearly $5 billion loan guarantee for the Grain Belt Express, a transmission project designed to move wind power from Kansas to the industrial upper Midwest. After more than a decade of development, the power line won bipartisan support and secured $4.9 billion in federal financing late last year to fund the first phase of the project, running from Ford County in Kansas to Callaway County in Missouri.

Keep reading...Show less
Yellow
Energy

Bigger Is Better in the Age of Trump, Says NextEra CEO

NextEra CEO John Ketchum projected serenity during the company’s earnings call Wednesday.

A sunglasses emoji amid the NextEra logo.
Heatmap Illustration/Getty Images

The business of renewable energy development in the United States is the business of NextEra. The company’s renewable division is one of the country’s largest and most sophisticated, with almost 30 gigawatts in its project backlog — including 3.2 gigawatts added in the past three months.

NextEra’s financial results and outlook for the future can be a guide to how the sector is thinking — or wants people to think it’s thinking — about the state of the development landscape. Now especially, that landscape looks confusing and contradictory, with power demand increasing sharply alongside hostility to wind and solar development.

Keep reading...Show less
Yellow