ELK: Elkem and Landsvirkjun sign long-term power agreement in Iceland
2026-10-22 12:30:10
Oslo, 22 October 2026
Elkem and Landsvirkjun have signed a new power purchase agreement (PPA) that
secures long-term electricity supply at competitive terms and enhanced
operational flexibility for Elkem's ferrosilicon plant in Iceland.
The new PPA superseding the existing agreement and remaining in effect until
2039, covers a contracted volume of 127 MW and is structured on a take-or-pay
basis. The agreement, which provides flexibility for both parties, will from
April 2029 have power price with a fixed floor price and partial link to the
market price for ferrosilicon. With this mechanism, both parties benefit from
higher ferrosilicon prices, while the plant remains competitive during periods
with lower market prices.
"We are pleased to have reached a new agreement with Elkem, one of
Landsvirkjun's longest standing customers," said Hörður Arnarson, CEO of
Landsvirkjun. "Our companies have enjoyed a strong and mutually beneficial
partnership for decades. This agreement builds on that relationship and
provides a solid foundation for continued cooperation. We look forward to
supporting Elkem's future operations and development in Iceland."
"Today's agreement demonstrates the value of the long-standing partnership
between Elkem and Landsvirkjun," said Birkir Guðmundarson, acting plant manager
of Elkem Iceland. "It gives us greater visibility and helps us preserve
flexibility as we continue to improve performance and assess strategic
opportunities for the plant.."
The new power agreement will improve the plant's competitiveness and strategic
attractiveness. This will be an important element in the ongoing strategic
review of the Iceland plant announced in the second quarter of 2026 and the
continued work to evaluate all strategic alternatives to secure viable
operations.
Elkem Iceland operates three furnaces and employs approximately 160 people. With
an annual production capacity of 120,000 metric tonnes, the plant is one of the
world's largest ferrosilicon facilities outside China. Its products are
primarily supplied to customers in Europe, Japan and North America and are used
in the automotive, construction, renewable energy and defence industries.
For further information, please contact:
Odd-Geir Lyngstad, VP Finance & Investor Relations
Tel: +47 976 72 806
Email: odd-geir.lyngstad@elkem.com
Marianne Stigset
VP Corporate Communications & Public Affairs
Tel: +47 411 88 482
E-mail: marianne.stigset@elkem.com
About Elkem:
Elkem is a global metals and materials company established in 1904. The company
holds leading positions in silicon, ferrosilicon, foundry alloys and carbon
solutions, supplying materials essential to modern society - from critical
infrastructure and manufacturing to digitalisation, mobility and energy
solutions. Elkem produces its materials by combining natural raw materials,
renewable energy and advanced process technology, creating solutions that enable
a more sustainable future. The company employs around 3,000 people, operates in
more than 30 locations across Europe, Asia, the Americas and Africa, and is
headquartered in Oslo, Norway where it is listed on the Oslo Stock Exchange
(ELK). Driven by innovation. Powered by nature. Shaping the future.
About Landsvirkjun:
Landsvirkjun is Iceland's largest electricity producer and one of Europe's
leading renewable energy companies. Wholly owned by the Icelandic state, the
company generates approximately 14 TWh of electricity annually from renewable
hydropower, geothermal energy and wind. Landsvirkjun supplies electricity to a
diverse range of industries, including aluminium, ferrosilicon, data centers and
aquaculture. The company is committed to meeting growing demand for renewable
energy through continued investment in new generation capacity and sustainable
development.
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