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Alcoa mulls closure of 2 TWh/year Norway plant

21 Nov 2023 12:01

21 Nov 2023 12:01

(Montel) International aluminium giant Alcoa is considering closing its plant at Lista in southern Norway, partly due to elevated power prices, according to a letter seen by Montel on Tuesday.

“After reducing operations in 2022 as a result of high electricity prices, Lista is still struggling with tough margins, and it is expected that 2024 will be a particularly demanding year,” Alcoa’s energy director Ole Lofsnaes wrote in a letter to Norway’s oil and energy ministry.

“For that reason, Alcoa is now considering all possible future scenarios for Lista. As you probably understand, full shutdown is one of the scenarios being considered.”

The group halted parts of the production at Lista when electricity prices reached record highs in August last year, affecting 60 MW of demand. In February, it announced that 30% of the plant’s capacity would be curtailed for the whole of 2023.

Lofsneas told Montel it was of crucial importance for the firm to sign a new power supply deal soon that could shield it against high spot prices going forward.

Plans by the Norwegian government to cut the CO2 compensation for industrial firms from the start of the new year will also compound the problems for the plant, Lofsnaes told Montel.

Montel understands that plans by the Norwegian government to cut the CO2 compensation for industrial firms from the start of the new year will compound the problems for the plant.

The smelter at Lista uses roughly 2 TWh of electricity a year and is one of the largest power consumers in Norway.

Alcoa also operates a smelter at Mosjoen in northern Norway, with an annual demand of 3 TWh.

The spot power price in southwest Norway (NO2) has so far this year averaged EUR 78.79/MWh, far below the 2022 average of EUR 211.28/MWh but still above the average price of EUR 26.91/MWh in northern Norway.

Updates published story with additional comments from Alcoa.

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