Several companies entered into long-term contracts for power 10-12 years ago. In a short time they will go out. This could have major consequences for Norwegian industrial companies in a situation with high electricity prices. – Many companies are about to reach a point where previous contracts for power supplies are about to expire, confirms the head of Norsk Industri, Stein Lier-Hansen. CRUCIAL: – It is crucially important that the companies clarify their future framework conditions by putting in place completely new power agreements, says Stein Lier-Hansen in Norsk Industri. Photo: Patrick da Silva Sæther / Patrick da Silva Sæther Stopping investments Lier-Hansen describes the situation as very serious. These companies have a large need for electrical power. It is absolutely crucial that they get new power agreements in place, he points out. The industrial companies must invest billions in production equipment and compete in global markets. – They cannot live in a situation where power prices quadruple, five and sixfold overnight. Then they will not be able to invest or operate in Norway at all, he says. If the high electricity prices continue and the industry does not get long-term power contracts in place, there is danger on the way, he warns. – Then it will obviously stop investment plans, and over time lead to bankruptcies, closures, or the company’s owners moving production out of Norway, says Lier-Hansen. He asks the power companies to sit down at the negotiating table in good time. – Now it is perhaps more important than ever because the uncertainty is so great, he says. Can destroy the company Inovyn in Bamble has a long-term contract with Statkraft that expires in May next year. The offers they have received for new long-term contracts are more than doubled from the agreement they have today. Now the company doesn’t know what to do, says production director of Inovyn Nordic, Nils Eirik Stamland. CONCERNED: – We are experiencing that the prices of the long-term contracts have risen sharply. We have a very difficult decision ahead of us, says production director at Inovyn Bamble, Nils Eirik Stamland. Photo: VIGDIS HELLA / news – We have a very difficult decision ahead of us, he says. – If we go wrong with a long-term contract, we run the risk of being forced to buy a significant amount of electricity at the same time that we do not make money from using the electricity. In the worst case, it can destroy a business, he says. When Inovyn entered into a long-term contract in 2011, the electricity price was also high. The company lost between NOK 1.5 and 2 billion in the first 8-10 years, Stamland estimates. But it was still at a level where production was justifiable. Now the situation is far worse. The green shift The company’s billion-dollar plans for the green shift can also go down the drain. They have two major projects that will reduce CO2 emissions by 40 per cent. But the plans depend on electric power. – There is a great danger that they will have to be put in the mothballs until we can clarify a sensible power situation, says Stamland. He believes the solution is for the power market in Norway to be regulated to create predictability. Uncertain industrial group Eramet with plants in Porsgrunn, Sauda and Kvinesdal is in a similar situation. The company is a major consumer of electricity with two terawatt hours a year. In the next few years, several power agreements will be renewed. – We are concerned about that, says director of strategy and communication at Eramet, Kåre Bjarte Bjelland. UNCERTAIN: If we are to be able to operate profitably, we must be able to renegotiate power agreements at roughly the level we have had in the past, says Director of Strategy and Communications at Eramet, Kåre Bjarte Bjelland. – Energy is our most important input factor nationally. There is now great uncertainty about the conditions going forward. It strongly affects us, and our owners’ investment decisions, he says. Spot price is not an option, believes Bjelland. – The spot price today is ten times what we are used to from long-term agreements, so it would never be justifiable. Today it is a poor alternative, he says. Villige Statkraft is Norway’s largest supplier of power to industry and has agreements with many customers. They understand the concerns of the companies and are willing to engage in dialogue about new long-term power contracts. – We will offer contracts, and then we have to negotiate the price. It is the case that Statkraft and all other power companies offer power on commercial terms based on market prices, says Lars Magnus Günther in Statkraft. UNDERSTAND THE CONCERN: – We are willing to engage in dialogue with those who wish and discuss long-term contracts, says Lars Magnus Günther, press contact at Statkraft. Photo: Statkraft Currently, there are not that many companies whose contracts will expire in the near future, according to Günther. Temporary measures that can help the situation now are a political issue, he replies. – We are neither benefited from nor do we think it is good with a situation with such high prices. We hope and believe that it will change over time, says Günther. news has requested comments from both the Ministry of Oil and Energy and the Ministry of Trade and Fisheries, but has not received a reply.
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Fears bankruptcies and closures – news Vestfold and Telemark – Local news, TV and radio
