Last year the close down of Aluminium Delfzijl (Aldel), the only smelter in Netherlands is not considered to be the last. That is what Citicorp’s David Wilson says.
With an overall capacity of 110,000 metric tons annually, the smelter announced its closure after the owners was not able to negotiate a low-cost energy deal. “There’s no reason to produce aluminium in Europe,” and “production in Europe will fall to 2 million tons this year, the lowest since 1971,” Wilson predicted. He said smelters in Germany and Spain are under greatest threat.
With the shutdown of Italy’s Fusina permanently last year, future of aluminium smelters in Europe has been quite doubtful. Lynemouth and Anglesey smelters in UK also closed down due to financial crisis. The overall production of France is in a better condition (400,000 + tons) due to high and stable supply of nuclear power. Germany and Spain contributes approximately 1 million tons of total capacity of Europe. If they close down, Norway will emerge as the largest and dominant supplier.
Citicorp’s warnings cannot be ignored completely.
Germany started a disastrous gamble with energiewende over last decade and planned to generate 80% of the electricity supplied to the country from solar, bio-mass and wind by 2050.
This has resulted in German consumers forced to pay €20bn ($27bn) in order to subsidize electricity from wind, solar and bio-gas plants power with a price of €3bn ($4bn), the Telegraph says.
To pay for the Green Adventure, the electricity surcharges for households have gone up by 47% in the last year alone. German consumers pay the highest electricity prices in Europe already, 40 percent more than France and Netherlands and 15% more than the average of European Union.
While heavy energy consumers like aluminum, steel and cement sectors have enjoyed tax reduction in comparison domestic consumers, they still have to undergo a hike of €740m ($1bn) and they might have to forego this protection if EU’s investigation considers the tax reduction as illegal. Likewise Spain and also Italy, to a lesser extent, have made huge investments in wind and solar, providing subsidies which would be difficult for Europe to maintain in the years to come.
It is quite clear why Europe’s domestic smelting industry is at such risk.
