Norsk Hydro: Hydro invests NOK 1.2 billion to build Illvatn pumped storage power plant
Rhea-AI Summary
Hydro (OTC:NHYDY) has taken a final investment decision to build the Illvatn pumped storage power plant in Luster Municipality, with construction starting November 2025 and operations expected in 2030.
The project delivers 107 GWh of new annual renewable production dedicated to Hydro’s aluminium operations. Gross investment is NOK 2.5 billion, with a net after-tax investment of NOK 1.2 billion under Norway’s cash flow tax scheme. The scope includes a new tunnel, increased Illvatn reservoir capacity, and a 13 km power line using 48 aluminium towers to reduce water loss and boost winter production.
Positive
- New renewable generation: 107 GWh annual
- Net investment after tax: NOK 1.2 billion
- Gross project value: NOK 2.5 billion
- Dedicated supply to aluminium production, improving energy security
- 13 km new power line with 48 aluminium towers
Negative
- Operations not expected until 2030, multi-year lead time
- Gross capital outlay of NOK 2.5 billion increases near-term spending
News Market Reaction – NHYDY
On the day this news was published, NHYDY declined 1.93%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Hydro has made the final investment decision for its largest hydropower development in over 20 years. Construction of the Illvatn pumped storage power plant in the Luster Municipality will begin this November, with operations expected to start in 2030.
The new pumped storage plant in the Luster Municipality in Norway will provide 107 GWh of new annual renewable power production, dedicated to Hydro’s aluminium production. The gross investment amounts to NOK 2.5 billion. Through Norway’s cash flow tax scheme for hydropower investments, Hydro’s net investment after tax is estimated at NOK 1.2 billion.
“Renewable energy has never been more important. We are now making the largest investment in our hydropower portfolio since the development of the New Tyin power plant in Årdal in 2004. The Illvatn pumped storage plant will contribute increased energy production, reservoir capacity, as well as installed power capacity from our facilities in Fortun. As we take this major step, our ambition is net-zero loss of prioritized nature. With this, we are setting a new standard for our hydropower development,” says Kari Ekelund Thørud, Executive Vice President of Hydro Energy.
Contributing to more power and balance in the power system
The planned pumped storage plant will pump water from the reservoir at Fivlemyrane (1,018 meters above sea level) to the Illvatn reservoir (1,382 meters above sea level). The investment includes the construction of a new tunnel and the reservoir capacity will be increased by lowering the minimum regulated water level in Illvatn. By pumping water to Illvatn, water that would otherwise be lost during the summer months, water loss in the Fortun system is reduced, and total production increases during winter when power demand is high.
As part of the project, Hydro will also build a new 13 kilometer power line from Fivlemyr to Sveinsøystølen. The plan is to build 48 power towers made with aluminium. By replacing traditional composite and steel with aluminium, Hydro is paving the way for a new and sustainable approach to power grid development.
Power for industrial development
Access to renewable energy and modern technology makes Norwegian industry world leading. To succeed in reducing emissions in existing industry and developing new industry, Norway needs more renewable power. Illvatn will be part of Hydro’s power portfolio supplying renewable energy to aluminium production in Norway.
“We need to develop more power and grid infrastructure to secure jobs, new industry, and welfare. As a major industrial player, we want to contribute to building out this power. Increased and more flexible hydropower production is an important and integrated part of our efforts to ensure power at competitive prices for Hydro’s Norwegian aluminium plants,” says Thørud.
Hydro currently produces aluminium in Norway with a carbon footprint approximately 75 percent lower than the global average. The goal is to produce zero carbon aluminium by 2050.
Investor contact:
Elitsa Blessi
+47 91775472
Elitsa.Blessi@hydro.com
Media contact:
Anders Vindegg
+47 93864271
Anders.Vindegg@hydro.com
FAQ
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