Executive vice president for Energy in Hydro, Jørgen C. Arentz Rostrup, was speaking after the Norwegian government today circulated a green paper proposing a new scheme for reversion. Hydro and the other parties affected have now six weeks in which to reply to the authorities before they submit their final proposal to the Storting.
”We want to further the development of Hydro’s aluminium business in Norway. When we look into new investments, we take a long-term view of some 30 to 40 years. It is therefore vital that the legal framework governing our access to power remains constant. Producing our own power for our aluminium business gives us a predictability that we cannot get in any other way,” explains Rostrup.
He emphasizes that the hydroelectric power produced by Hydro itself forms the basis the company’s aluminium operations in Norway.
Rostrup also emphasizes that solutions are available which meet industry’s needs for long-term ownership of power resources as well as the political intention of maintaining national control of hydroelectric utilities.
“We can accept that only public bodies can acquire our power plants in the event of a divestment. This will ensure that the proportion of public ownership gradually increases, while the industry continues to produce power for industrial purposes. A condition for this would be that private interests, in the same way as public bodies, obtain perpetual ownership to their power plants as long as the power is used industrially,” says Rostrup.
At the crossroads
Hydro’s operations at Karmøy have now come to the crossroads. Environmental regulations require production from the outdated Søderberg technology to be phased out by 2010. To replace the old technology Hydro intends to build a completely new and modern, prebake line and increase aluminium production at Karmøy.
“The challenges in obtaining more power for a Karmøy expansion make it difficult for us to reach an investment decision for a new production line. The proposal now under consultation creates further uncertainty around our current production,” states Rostrup.
: March 14, 2008