Landsvirkjun and Norðurál have signed an amendment to the companies' power contract from the year 1997 in order to reduce risks due to large price fluctuations in markets.
As a result of the amendment, the companies' 161 MW contract will remain largely indexed to the Nord Pool power market, but now a portion of it will have a fixed price, and an aluminum price link will be added later in the contract period. The contracting parties intend to lift confidentiality after three years, but until then the contract remains confidential for commercial reasons.
There have been major fluctuations in the Nordic power market in recent years, and to a much larger extent than has been seen before in the almost 30 years that it has been in operation. These increased price fluctuations have been disadvantageous to both parties to the contract.
The change in the contract is beneficial for both companies, as it ensures a more predictable cash flow for both parties in the long term.
The amendment does not make changes to the amount of electricity or the term of the contract.