Norwegian aluminium giant Hydro invests NOK 1.2 billion for its new storage power plant in Luster Municipality

Hydro has announced plans to construct a new pumped storage power plant in Luster Municipality, Norway. Construction is set to commence in 2025, with operations expected to begin in 2028 or 2029. Currently, Hydro produces aluminium in Norway with a carbon footprint approximately 75 per cent lower than the global average, with a goal of achieving zero-carbon aluminium by 2050.

"Hydro and the wider industry need more hydropower, wind, and solar power to successfully transition to a greener future and make further investments in Norway. As a major industrial player, we are committed to contributing to the development of these renewable energy sources," said Kari Ekelund Thørud, Executive Vice President of Hydro Energy

About the project

While Hydro's Norwegian aluminium plants are primarily covered by long-term power contracts until 2030, securing new contracts for energy supply is crucial beyond that period. The total investment for the project is estimated to be around NOK 1.2 billion. Once completed, the power plant will generate 84 GWh of renewable energy each year, primarily for industrial production.

The power plant will pump water from the Fivlemyrane reservoir, which is 1,018 meters above sea level, to the Illvatn reservoir, at an elevation of 1,382 meters. To enhance reservoir capacity in Illvatn, a new drainage tunnel will be constructed to lower the minimum regulated water level. This strategy aims to minimize water loss in the Fortun system during summer while increasing energy production during peak winter power demand.

Illvatn to be integrated into Hydro Energy's power portfolio

In April 2020, the Norwegian Ministry of Energy granted Hydro a concession to develop the Illvatn pumped storage power plant. The Norwegian Water Resources and Energy Directorate (NVE) is processing an application for a plan change. The project's implementation is contingent upon a favourable response to this application, with a final investment decision anticipated by the second quarter of 2025.

"We have carefully developed this project over an extended period, in close dialogue with authorities and the local community. With this project we can increase production, reservoir capacity and efficiency from our facilities in Fortun, as well as take better care of water resources with minimal environmental footprint. Our ambition for the project is 'net-zero' loss of prioritized nature," added Kari Ekelund Thørud.

Illvatn will be integrated into Hydro Energy's power portfolio, providing renewable energy for industrial production in Norway. The country's access to renewable energy and advanced technology has established its industry as a global leader. However, to further reduce emissions in existing sectors and encourage the development of new ones, Norway still needs to secure additional renewable power at competitive prices.

Other hydropower projects

Hydro is advancing several hydropower projects at various locations. In addition to the Illvatn project, the company has received a concession to construct the Øyane power plant within the same watercourse. Although the Øyane project presents more profitability challenges, Hydro is currently assessing its feasibility.

Another project in development is a new power plant at Torolmen, located in the Årdal municipality, expected to produce approximately 30 GWh annually. The total investment for this project could reach NOK 290 million, with construction potentially beginning as early as 2027.

In Røldal-Suldal, Hydro is collaborating with Lyse to upgrade and expand existing facilities. This initiative could enhance annual power production by 800 GWh and increase capacity by 650 MW. The total investment for this project is estimated to be between NOK 7 billion and NOK 8 billion, with construction possibly starting in 2027. Hydro currently holds a 25.6 per cent ownership stake in the Røldal-Suldal facilities.