Hydro signs agreement with Lyse for new hydropower company

Hydro has signed an agreement with Lyse for the establishment of new hydropower company. The new company called Lyse Kraft DA will have a normal annual power production capacity of 9.5 TWh, of which Hydro will own 25.6% and Lyse 74.4%.

 “This is a great day for the future of Norwegian renewable-based industry. The agreement is strategically important for Hydro, as it secures the value of our RSK hydropower assets and contributes to predictability for further industrial development in Norway,” says Hydro President & CEO Hilde Merete Aasheim.

The new company includes Hydro’s hydropower assets Røldal-Suldal Kraft (RSK) and the majority of Lyse’s power production portfolio.

The transaction is in line with Hydro’s strategy to strengthen its position in low-carbon aluminium and grow in the renewable energy sector.

“The agreement supports both objectives, as we secure long-term access to renewable power, and Hydro will become a larger hydropower operator. At the same time, we secure the value that RSK represents for Hydro,” she said.

The CEO of Lyse, Eimund Nygaard, said, “The agreement makes Lyse the third-largest power market entity in Norway and gives us a chance to build an even more competent and robust power management organization in Stavanger.”

“The power sector is changing, and we would eventually risk becoming too small to run these plants efficiently on our own. When we now join forces, we can make better use of our combined competences, including in digitalization in a larger system,” says Nygaard. 

 “We look forward to welcoming new colleagues to the Hydro team, and we look forward to becoming an even larger entity on the southwest region of Norway, where we already have invested in the world’s most climate and energy-efficient aluminum production at the Karmøy Technology Pilot,” said Aasheim.

The transaction is expected to close in the fourth quarter of 2020, pending approval by the Norwegian Competition Authorities.