The power of partnerships: Statkraft and Alcoa

The energy crisis in 2022 forced Alcoa to make the difficult decision to close one of three production lines at the Lista aluminium plant. Collaboration and power agreements with Statkraft helped them through the crisis.

A short drive west from Norway's southern tip, where south meets west, you will find Lista, a scenic area in the municipality of Farsund with around 10,000 residents. Here, the cornerstone company Alcoa has been providing aluminum and local jobs since 1971. 

Today, approximately 300 employees walk through the doors of the plant each morning to produce as much as 100,000 tonnes of aluminium every single year.

Get to know Alcoa’s aluminium plant at Lista:

From Lista with love

At the heart of the plant in Lista you’ll find an impressive line of bulky melting furnaces. To say the furnaces can get hot is the definition of an understatement: temperatures inside can reach upwards of 1000 °C.

Aluminium from Norway and Lista ranks among the world's cleanest, produced almost exclusively using renewable hydropower.  It’s no surprise that aluminium has become essential in our society. It is a strong, lightweight, and infinitely renewable metal, used in buildings, smartphones, and cars, among other things, ending up in products across Europe and beyond.

One job at Alcoa means two in the local community

A locally integrated company like Alcoa delivers many positive ripple effects to the community. Primary among them is employment.

When the energy crisis in 2022 threatened parts of the operation, it became clear that the impact would be widely felt, not just on the factory floor.

Grethe Hindersland, General Manager of Alcoa Norway

"Cornerstone companies like Alcoa Lista are very important for small communities like Farsund. Each individual industrial job creates two other jobs in the local community.", explains Grethe Hindersland, Regional Director of Alcoa Norway.

Powering power-processing

Alcoa is a crucial part of Norway's power-intensive industry, where the electrolysis process for aluminum requires a huge amount of electricity.

And while Alcoa has signed power purchase agreements and had a close collaboration with Statkraft for several years, it’s also the case that parts of their power have also come from the spot market (where the price of electricity is calculated).

This meant that when the Russian invasion of Ukraine led to a major gas shortage in Europe and a rapid rise in electricity prices, the situation had a direct impact on Alcoa at Lista.

At one point, the energy crisis hit so hard that they were left with no choice but to stop one of the three production lines at the plant.

"The price of electricity has a huge impact on how the plant is performing financially," says Ole Løfsnæs, Nordic Energy Director at Alcoa,.

<h2>Alcoa's plant at Lista produces as much as 100,000 tons of aluminum – every single year. </h2>

Short-term and long-term power purchase agreements with Statkraft

In Alcoa’s case when the energy crisis hit, the company already had a close collaboration with Statkraft which meant there was a low threshold to get in touch and discuss the opportunities that could help mitigate the situation. This is where new power purchase agreements (PPAs) came into play.

Statkraft offers tailor-made PPAs to the power processing industry. These agreements provide industry with a stable supply of electricity at an agreed price, helping businesses avoid drastic fluctuations in electricity costs.

<div class="OutlineElement Ltr SCXW114049326 BCX8"> <h2 class="Paragraph SCXW114049326 BCX8">Alcoa’s plant at Lista is Norway’s southernmost aluminum plant and consists of three electrolysis halls and a foundry primarily producing extrusion billets </h2> </div>

<div class="OutlineElement Ltr SCXW119236768 BCX8"> <h2 class="Paragraph SCXW119236768 BCX8">Alcoa is a cornerstone company for employment at Lista, employing approximately 280 full-time staff.</h2> </div> <div class="OutlineElement Ltr SCXW119236768 BCX8"> <h2 class="Paragraph SCXW119236768 BCX8">At full capacity, the foundry produces around 94,000 tons of primary aluminum </h2> </div>

<h2>Part of the plant’s production is used by the neighboring factory – the automotive parts manufacturer Aludyne – while the rest is exported as billets to the EU by land and sea </h2>

The total production capacity of the foundry is about 150,000 tons.

Technology development and balancing power: a powerful pair

Statkraft is committed to understanding the customer's needs in order to tailor a power agreement that suits each individual industrial company. And as Hallvard Granheim, Executive Vice President for Markets in Statkraft, explains, Norway and renewables together have some unique attributes when it comes to powering green industry:

"The technological development we’re seeing across solar and wind, together with the flexibility we have with Norwegian hydropower, should provide fantastic framework conditions for existing and new green industry in Norway," says Hallvard Granheim, executive vice president for markets in Statkraft.

The power of power

Power has always been crucial for industrial development in Norway and abroad. Where you have industry, you need power.

Statkraft is a proud partner to industry, both in Norway and in Europe.