NKT inks €1B contract with long-term partner for low-carbon aluminium wire rod supply

Denmark-headquartered power cable manufacturer and installation company NKT has signed an agreement with Norway’s aluminium and renewable energy company Hydro for the supply of low-carbon aluminium wire rod through to 2033. The two firms have been partners for over 40 years.

According to NKT, the agreement ensures access to Hydro’s REDUXA 4.0, the world’s lowest-carbon EC grade aluminium wire rod, said to have a carbon footprint below 4 kg CO2e per kg aluminum, which is one-fourth the global average.

Hydro also aims to reduce the carbon footprint by a further 25% by 2030, with NKT having first rights to Hydro’s REDUXA 3.0 aluminium.

Seen as a landmark one, the supply agreement has an estimated contract value of around €1 billion, depending on the quantity, duration options and future metal prices.

“This long-term supply agreement with Hydro not only guarantees a long-term, European supply of low-carbon aluminium, it also reinforces our position as a sustainability leader in the power cable industry,” said Claes Westerlind, CEO and President of NKT.

“It supports our strategy to continuously improve the carbon intensity of our power cables thereby supporting both our own short and long-term targets and our customers’ decarbonisation ambitions. Given the current geopolitical landscape, securing reliable, local supply chains is increasingly important.”

The majority of the low-carbon aluminium will go to medium-voltage sites in Falun, Sweden, and Asnaes, Denmark, with several high-voltage cable system projects, including 525 kV XLPE HVDC power cables, produced in Karlskrona, Sweden, set to also receive low-carbon aluminium from Hydro.

To meet NKT’s growing demand, Hydro recently announced a €140 million investment in a new casthouse.

“It is with a sense of urgency that Europe is now mobilising to reduce the dependency on fossil fuel imports, introduce more homegrown, renewable power, and ensure security of supply of critical raw materials. Together with NKT, we are building a supply chain to provide responsibly sourced aluminium for the infrastructure makeover that Europe needs to bring down energy prices, accelerate the energy transition, and boost European competitiveness,” said Eivind Kallevik, President and CEO of Hydro.

NKT recently launched an integrated monitoring platform to safeguard offshore and onshore cables and support their continuous operation by identifying and mitigating potential threats, including fishing accidents and deliberate damage.

Designed for both offshore and onshore cables with fiber-optics, the platform integrates multiple sensors and combines technologies to provide a comprehensive overview of power cable conditions, aiming to make power cable grids more reliable.