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Hydro has decided to invest in technology pilot in Karmøy

Staff writer |
Hydro has made a formal investment decision to develop a full scale pilot plant in Karmøy to demonstrate the world's most energy and climate efficient aluminium production.

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A final build decision for the project, with total costs estimated at NOK 3.9 billion, is conditioned on Hydro securing a robust power solution for the technology pilot.

Through the technology pilot in Karmøy, Hydro aims to industrialize the world's most energy and climate efficient technology for aluminium production, with an ambition to reduce energy consumption by 15% per kilo aluminium produced compared to the world average, and with the lowest CO2 footprint in the world.

The pilot plant is designed with an annual production capacity of approximately 75,000 tonnes, with a possible start-up in the second half of 2017, at the earliest. Project costs are estimated at NOK 3.9 billion, including NOK 1.5 billion in support from Enova. EFTA's surveillance authority, ESA, has recently approved this support.

An overall power solution includes new competitive power contracts for the pilot plant, and a clarification from Norwegian authorities regarding the industrial ownership of power within the current consolidation model, which will enable withdrawal of power instead of financial dividends.

During the last week, Hydro has entered into a new power contract with Lyse Produksjon AS of 330 GWh annually in the period 2031-2040, which covers a third of the plant's power needs in this period. Hydro is working actively to cover the remaining power needs for the pilot towards a final building decision.

Hydro has previously received assurance from Statnett that it will be possible to extend the power grid in the area in step with an industrial development in Karmøy.

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