Innstallasjon av vindkraftverk. Foto: Vestas Wind Systems

Press release: Guarantee for new wind farm secures power supply to smelter

A new long-term power purchase agreement has been entered into between Guleslettene Vindkraft and the aluminium producer Alcoa Norway ANS. GIEK has contributed by guaranteeing Alcoa Norway's payment obligations. This is GIEK's third power purchase guarantee issue since October 2017.

Guleslettene Vindkraft AS will build the new wind power plant at Guleslettene in Bremanger and Flora municipalities in Sogn og Fjordane, at the west coast of Norway. The power is sold to the aluminum company Alcoa Norway ANS through a long-term power purchase agreement, and will be used at the aluminium smelter in Mosjøen, which employs over 450 workers. Alcoa Norway is the second largest power consumer in Norway; The company's two Norwegian aluminum plants have accumulated annual consumption of about 5 TWh.

GIEK have provided a guarantee of 88 million euros (approximately NOK 840 million) for Alcoa Norway's payment obligations under the power purchase agreement.

Enough wind power for a large Norwegian town

This is the third major wind power project realized with a guarantee from GIEK. The first was the wind farm to be built at Kvitfjell and Raudfjell in Troms, and then the wind farm to be built at Øyfjellet in Vefsn municipality in Nordland. "We build trust between long-term commercial parties," CEO in GIEK, Wenche Nistad says. All GIEK guarantees are given on commercial terms, she adds. "I am pleased that together we can help with the transition to renewable energy and secure important industrial activity in Norway."

The wind farm will be ready for operation by the end of 2020. The wind farm will have an estimated annual output of 710 GWh, which corresponds to the electricity consumption of more than 40,000 Norwegian households.

The power purchase guarantee contributes to renewable power and value creation in industry

¬The power purchase guarantee scheme has existed since 2011, but no guarantees were issued before 2017. The tree power purchase guarantees issued in a short period of time, is due to the fact that many power agreements expire around 2020. Wind power has in the meantime become a competitive alternative for the industry.

Guaranteed guarantees issued now amount to nearly four billion of the power purchase scheme's limit of NOK 20 billion.

"It is very pleasing that the industry has several projects and power agreements that are realized using the power purchase scheme. It shows willingness to strive forward and to create jobs. Agreements between the power-intensive industry and the wind power suppliers reinforce the green footprints of Norwegian industry, showing the unique flexibility of the Nordic power system, "says Minister of Industry Torbjørn Røe Isaksen.

"The power purchase guarantee allows wind farms to provide long-term power purchase agreements to the industry, thereby contributing to maintaining important Norwegian industrial sites," says Nistad.

"It is also nice that the west coast gets a wind farm with GIEK guarantee for the first time," she concludes.


The power purchase guarantee scheme

• Was approved by the Storting (Norwegian Parliament) in 2009 and was established after the EFTA Surveillance Authority ESA approved the scheme in 2011.
• Contributes to industrial companies entering into long-term power agreements on commercial terms. The scheme is thus not directly related to export transactions.
• Gives GIEK the opportunity to provide guarantees to power suppliers and financial institutions linked to long-term power purchase agreements with power-intensive industries.
• Reserved for power-intensive industrial companies registered in Norway within wood processing, chemical products and metals.
• Has a limit of NOK 20 billion, of which NOK 4 billion has now been utilized.


Press contacts GIEK:

Senior Communications Adviser Jannicke Bache-Wiig, 917 917 99

Communications Manager Allon Groth, 93251124