Elkem wants to limit energy exports to prevent expensive electricity from affecting old and new industries. – Unfortunately, this is something we were waiting for, says the union delegate of the group Terje André Hanssen in Elkem.
The industrial company Elkem accounts for almost four terawatt hours (TWh) of Norwegian electricity consumption of 135 TWh per year. Now the company and its employees are concerned about high electricity prices and the bottling of Norwegian water tanks.
– Unfortunately, this is something we were waiting for, says chief shop steward Terje André Hanssen in Elkem to E24.
– It is not a surprise to us, the main shop stewards, we have sent reports of concern about this for a long time. Norway has gained more transmission capacity and we have been waiting for European energy prices, he says.
Reservoirs can fill up if it rains this fall, but as it seems now, at worst you may be rationing in the spring, energy analyst Tor Reier Lilleholt told Volue Insight at E24 this week.
Elkem’s energy director Alexander Strøm Arnesen believes exports should be limited to prevent Norway from facing challenges with electricity this winter.
– When it comes to cables, I doubt that we are currently doing full exports. So far it is okay to export a lot if we have a good resource situation in Norway. But now the magazines are unusually low and yet we export in full. It seems very unfortunate, Arnesen tells E24.
– What we want is for politicians to take control of power and make sure that we have enough power for ourselves before we start exporting. We must be prepared for the worst case scenario. I don’t know if we’re there yet, but if the magazines aren’t full, we may be there around the turn of the year, he says.
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(+) Seven questions and answers about the soaring prices of electricity
– It should be a form of restriction.
Norwegian reservoirs contain much less water than normal at this time of year, down to 65 percent. The 36-week median in recent years is an 82 percent fill rate, according to NVE.
According to NVE, the new cables to Germany and the UK will increase the security of Norway’s electricity supply, but Arnesen believes this has changed since the cables were licensed in 2013. Several countries in Norway are phasing out fossil energy stable and relying more than before, among other things, on wind energy.
– Both the UK and Germany now have weather dependent systems, just like we do. In demanding periods, they will have no power to send us, says Arnesen.
– I don’t have a fully designed solution on how energy exports can be limited, but it should be a form of restriction when there is little water in reservoirs like now, he says.
Elkem notes that it is undesirable to have full exports on English North Sea Link cable at the current fill level. The cable will go into trial operation on October 1, where half of the 1,400 megawatt capacity will be used.
Electricity exports lower this year than the average of the last ten years: – Not that production is plummeting now
Fears stop in production
Greater political control over electricity exports is also something that SP leader Trygve Slagsvold Vedum defended in an interview with E24 just before the elections, but without elaborating on how this will happen.
Shop Steward Hanssen fears that it is profitable for Norwegian industry to shut down production and sell its energy on the market, which is very rare. The energy crisis in Europe has already led fertilizer manufacturers Yara and CF Industries to shut down part of their production.
– We fear that companies will have to stop production. If we look forward with three or four years, not only the new battery factories will stop, but also the old industry in the future. Bremanger and Bjølvefossen, who have already been going green for many years. We must not only build new, we must also take care of the old, says Hanssen.
– Change the willingness to invest
Elkem has covered its electricity needs with long-term contracts. But these need to be renewed eventually, and then higher energy prices could take effect over time. A persistently high energy price can affect homeowners’ willingness to invest in Norway, it warns.
– Absolutely. This changes the will to invest in the energy intensive industry in Norway and in Europe. Elkem is also considering establishing a new energy-intensive industry in Norway, but of course it is not as attractive to achieve the energy prices that we are seeing at the moment, says Arnesen.
Among other things, the company will invest up to 11 billion in the Vianode factory in Porsgrunn, which requires “a lot of energy”. Elkem notes that Hydro and Yara also have big investment plans in batteries and green hydrogen and ammonia.
– Many of the industry initiatives to be decided these days are energy intensive activities, but the energy prices we see now may threaten investments in these types of businesses in Norway. if they persisted. We hope for a long time that this does not become a reality, but that politicians will be able to take the right steps now, says Arnesen.
Yara cuts production due to high gas prices
– It does not work
In the future, perhaps up to 80 TWh of additional demand is expected, but there are few plans to develop new energy in Norway. How are you?
– It does not work. Politicians talk about electrification of the platform, transportation and new industry. Everyone thinks he’s cool, but he’s very quiet about the new production. There is a lot of talk that offshore wind power will arrive in 10 years or more. You have to have new power, says Arnesen.
Energy consumption in Norway is expected to increase dramatically to achieve Norway’s climate goals. Statnett has estimated that consumption could reach 220 TWh in 2050, 70 TWh more than current energy production in a normal year. At the same time, little wind power will likely be developed in the 2020s.
– It can be a long-term solution to develop more energy to ensure a surplus of energy. But we believe that export restrictions can be a short-term solution in a situation as tense as the current one, says Arnesen.
Electricity prices in Europe have risen following the impact of coal and gas prices and record prices for CO quotas. Elkem believes that it is critical for Norway to continue and strengthen CO₂ offsetting to businesses, and scheme where companies are assigned free CO quotas.
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