Symposium: German power market

(June 28, 2004) High energy prices, significantly above EU standards, endanger the future of large energy users in Germany - foremost the five companies active in primary aluminium production. Consequently, the companies organized a symposium "Power Market Germany - the final countdown for large energy users?"

Managers and experts discussed the German power market and its critical impact to e.g. the aluminium industry.

The challenge is threatening the five German aluminium metal plants, with combined annual production of 650,000 metric tons of liquid primary aluminium.

The companies running them - Alcoa, Amag, Corus, Trimet and Hydro, with alone more than 300,000 mt of production - had agreed on the need to raise awareness for the critical situation, since Germany's Federal Cabinet is discussing the new law on energy business and its regulation.

In the span of eight weeks, the companies were able to shape an event that attracted more than 100 managers and experts.

They gathered to express and hear a wide range of statements and solution proposals - and participated in a vivid and controversial discussion. It was ended by stating the common hope, that the symposium conclusions will lead to subsequent considerations in the government.

Hans-Christof Wrigge, who heads the 33-percent Hydro-owned Hamburger Aluminium-Werk GmbH, presented the main statements from the aluminium side:

• Aluminium industry in German is well positioned – energetically, ecologically and economically, with leading energy efficiency and some of the lowest environmental impacts.
• Aluminium production starts a value chain, where Germany is obtaining a top position – which is even more important, since Germany lacks any natural resources to profit from.
• To keep this position – with profits, process chain, material and technology competence, and with jobs in the country – Germany is in need of a pro-active energy and industry policy.

This is because deregulation has not led to a more efficient market, but to power prices increasing by up to 70%, plus net transport costs on top.

Aluminium production closures in Germany will lead to more aluminium production on non-Kyoto states; with more energy needed and more emissions produced for each new kg aluminium; this backfires German efforts to lower CO2 emissions worldwide.

Hartmut Rossel, who is managing director of Corus Aluminium Voerde GmbH, presented the aluminium industry's main demands:

• Adapt liberalized German power market to the needs of energy-intensive industries
• Lower power costs based on market comparison principles
• Keep energy, when main resource (as in aluminium production), 100-percent free from legal burdens/fees, etc.
• Secure power supply and reliable planning for the renewal of the German power infrastructure