Last week, Iceland’s national power company, Landsvirkjun, announced that they had successfully negotiated a new electricity price for 161 MW of electricity for the expansion at the Nordural (Century Aluminium) smelter at Grundartangi. The price will be valid from 2019 for four years and, for the first time ever, will be linked to the market price for electricity in the Nord Pool electricity market instead of being linked to the world price of aluminium, which is extremely low at the moment. This is a breakthrough, as up till now the aluminium companies have negotiated very low prices for contracts lasting much longer than four years – Landsvirkjun sells 37.5% of its energy to the Alcoa Fjardaal smelter in East Iceland, which came on line 10 years ago, and that contract doesn’t run out until 2048.
The Rio Tinto Alcan plant at Straumsvik, which reported a loss for the last financial year, also has a contract for cheap energy for a long time.
Meanwhile, out at Helguvik on the southwest tip of Iceland, what is supposed to be Nordural’s second aluminium plant remains half-built.
How about a competition: What can be done with a half-built aluminium smelter? I think that something along the lines of the Eden Project in Cornwall would be brilliant. It’s logo sums up the situation: Transformation: it’s in our nature.