No. 4: A solar-powered steel mill

Executives of Evraz say the key to their decision to build a $500 steel mill in Pueblo was the long-term cost reliability offered by solar power

Nowhere was the emergence of solar energy as a prime player in Colorado more graphically illustrated in 2021 than in Pueblo. The city has made its living from burning coal for about 150 years, at first directly in the foundries of the steel mill then called the Colorado Fuel and Iron Co. When electric-arc steel making arrived, coal was burned to produce that electricity at the nearby Comanche Generating Station.

On a semi-windy day in October, a tent was set up on a hill in a sea of solar panels, part of the 300-megawatt Bighorn project. The solar project is likely the very biggest in the United States east of the Rocky Mountains.

To the south was the coal-fired power plant and to the west and north was the steel mill, now owned by Evraz, a multi-national firm based in London.

Bighorn Solar and Comanche Generating Station

The first two coal-burning units of Comanche, on the left, were built in part to supply the steel mill. Now, as they retire, they will be replaced by solar energy. Photo/Allen Best

Bighorn is to supply about 90% of the electricity needed for production of quarter-mile rail segments increasingly required by Union Pacific and Burlington Northern-Santa Fe. The two railroads together constitute two-thirds of the U.S. rail market. A new mill is now being constructed at a cost of $500 million to deliver those long, seamless rails that are equally needed in places where temperatures reach 120 degrees and those where it gets 40 below.

Crucial was the quasi-net-metering deal with Xcel Energy, which was represented on the hilltop by Bob Frenzel, the utility’s president and chief executive.

The Pueblo event was part of a broad surge of solar in many locations in Colorado, from Aspen to Delta to Fort Collins. Membership in the Colorado Solar and Storage Association reflects that surge. Mike Kruger, the group’s chief executive, reports a 61% growth in members, from 140 to 230. Across Colorado, solar projects were steadily in the news.

Signs on the hilltop outside warned of serpents amid the sagebrush surrounding the tent. None seem to have interrupted the celebration of economic and environmental triumphs.

“I feel like I’m witnessing the energy transition right in front of me,” said Abby Hopper, the chief executive of Solar Energy Industries Association, a national trade association. She said that solar, now responsible for 3% of the energy production in the United States, is poised to deliver 30% by 2030.

“This is what policy makes happen, senator,” she said, looking at U.S. Sen. Michael Bennet, who was wearing a green sports jacket, blue jeans, and black cowboy boots. I guess he had prepared for the rattlesnakes.

Bennet, who once worked for Phil Anschutz, an industrialist who made his first large fortune in natural gas, tied his remarks to the warming climate.

“This summer was a rough summer for people across Colorado,” he said. “Here we are pretty used to seeing the mountains. That’s why a lot of us live here, and this summer there were many days you couldn’t see the mountains. There were a lot of days you couldn’t go outside” because of the fires on the West Coast. Further, he said, water supplies are being threatened by the warming climate.

The deal had come together in 2018 and 2019 as Evraz executives pondered how to best remain competitive. The new mill was needed.

The price of electricity was the crucial component in whether to stay in Pueblo. The deal cut with Xcel fixes electricity prices for 20 years.

And in the process, Evraz reduced its carbon footprint in the steel manufacturing process 75%, said Skip Herald, the boss for Evraz operations in the United States. He called it a “21st century success story.”

Kevin Smith, the chief executive for American operations of LightSource BP, the solar company that built Bighorn, called solar energy the most cost-effective energy right now. And Pueblo’s solar resource, he said, rates 8 or 9 on a scale of 10.

In an interview after the formal comments, Jerry Reed, the recently retired vice chief commercial officer, said Evraz was going to lose its rail business if it couldn’t deliver the long rails. The carbon-free component was an added value, he said.

Reed also shared that this was somewhat more than mere business. He had grown up in southwestern Virginia, amid factories towns that have become part of the rust bucket belt. He didn’t want to see that in Pueblo. “It’s a hard-working group of people here,” he said, describing the fourth, fifth, and even sixth generation steel workers he had met.

“It becomes very personal,” he explained.

Jerry Reed, former Evraz executive, at Pueblo

Jerry Reed, a former executive with steel company Evraz, says low-cost solar energy was crucial to the decision to build a new $500 million steel mill in Pueblo. Photo/Allen Best

Among the third-generation steel mill workers was Pueblo’s current mayor, Nick Gradisar. His grandfather, a Slovenian immigrant, worked at the steel mill for 50 years, his father for 30. Gradisar himself walked through the gates of the mill daily for three summers while working his way through college.

Gradisar said the project “points to a bright future for this mill and our community.”

Weaving together economics and environment, he explained that the mill was already the largest recycler in Colorado, it recycles one million tons of steel annually.

“And now it will be powered by renewable energy,” he concluded.

Adding further symbolism during the day were the looming towers of Comanche’s three generating stations. The older two units will cease operations in 2023 and 2025. As for the newest unit, Comanche 3, its fate is yet to be determined, and that’s another story.

No sooner than the Bighorn project became a wrap in early October than LightSource BP began work on a second, giant solar farm south of Pueblo, just a whisker smaller than Bighorn, for delivery to Xcel.

Elsewhere in Colorado, solar has been a growing part of the conversation. Just a few in the news in 2021:

Primergy Solar completed a 5-megawatt solar project near the Aspen-Pitkin County Airport in October, part of the plan by Holy Cross Energy in its drive toward 100% carbon-free energy by 2030.
Near Delta, an 80-megawatt solar venture is projected to deliver $10 million in property taxes over 35 years while delivering electricity to members of Delta-Montrose Electric Association.
Solar plays a large role in the plans by Xcel Energy to achieve its requirement of reducing carbon emissions 80% by 2030 (the plan before the Public Utilities Commission actually could push it to 87%). Included in the plan being reviewed is potential for more solar in the San Luis Valley.
In December, Platte River Power Authority, which also has a 100% carbon-free goal for 2030, announced it wanted proposals for solar—leading to conjectures of a 100-megawatt solar farm at the site of the current coal-fired power plant at Craig. After all, the land will presumably be inexpensive and the transmission is there to export the electricity to Platte River and its four member cities: Fort Collins, Longmont, Estes Park, and Loveland.

Looking into 2022

It was a big year – and it’s just possible that this year will be bigger for solar in Colorado, fulfilling the promise that visionaries in the 1980s and 1990s imagined when solar was still too costly for all but space ships.

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