Norddeutsche affinerie hits out on energy costs

In a hard hitting press release, Norddeutsche Affinerie says the dramatic rise in electricity prices compels it to reconsider the future viability of its energy-intensive production sectors. “The possibility of closing down particularly energy-intensive sectors, such as the secondary smelter (RWN) in Hamburg, until such time as the company’s own SF power plant is commissioned in 2009, is being considered in order to protect the company from considerable damage. Up to four hundred NA employees could be affected.”

NA says the key to avoiding this is to be found in German energy policy and the four German energy suppliers. “The four energy suppliers operating in Germany use their market-dominant position to the detriment of the German base industry and the whole of German trade and industry. As a result, the electricity costs for NA as an energy-intensive company with a requirement of 650 million KWh/y have doubled over the past three years. If NA buys its electricity at the current price level on the Leipzig electricity exchange EEX, it would have to absorb an additional annual financial burden of millions of Euros.”

NA says it does not “understand Vattenfall Europe’s comments that electricity could have been bought at a more favourable price at an earlier time. This statement can only come from someone who is aware in advance of constantly rising market prices and assumes that the market will not function anyway. Even at the time prices were at their lowest this year, the EEX price was far higher than the actual production costs with completely unjustified pricing of CO2 licenses which were allocated free of charge. The pricing of the CO2 licenses created a windfall profit for the four energy suppliers of €5.3 billion.”

“In order that NA can in future maintain its competitiveness worldwide, and to secure the Hamburg operations long-term, we must save costs until such time as they are reduced by the power plant we are planning”, said NA’s Chief Executive Officer, Werner Marnette. “We are counting on the full support of the Hamburg Senate for the erection of the substitute fuel power plant, so that we should have no delay in realising this project which is crucial for NA.”

The SF power plant which is planned for the long-term will make NA independent of the electricity price tariffs of the four energy suppliers. For NA, as Europe’s largest copper producer, it is the basis of the company’s long-term electricity supply at fair prices.

“We are doing everything in our power to safeguard the jobs in the recycling sector in Hamburg. Due to the good economic situation, I am optimistic that redundancies can be avoided if the power plant is commissioned in good time”, said Marnette. “For German citizens and German trade and industry, I hope that the politicians will ensure that the suppliers’ market-dominant behaviour will be effectively countered. Because in Germany not only NA’s jobs are at risk, but more than 660,000 jobs in energy-intensive enterprises.