Landsvirkjun and Norðurál Grundartangi ehf. last May reached an agreement on terms to extend the companies’ 161 MW power contract, which was originally entered into in 1997, on market-based terms. Signature of the agreement awaited completion of an informal review by the EFTA Surveillance Authority (ESA). That informal review has now been positively concluded and the contracting parties have therefore signed the agreement, which is still subject to conditions.
The signed contract will now be sent to ESA for formal and final procedure. A final decision from the Authority is expected before the end of this year.
The four-year contract extension covers 161 MW of power, which is nearly one third of the energy required at Norðurál‘s aluminum smelter located at Grundartangi. The contract extension will come into effect in November 2019 and extend until the end of 2023. The terms of the current contract will remain in place through October 2019.
The agreed contract extension is linked to the market price for power in the Nord Pool power market, replacing the previous link to aluminum prices in the current contract.