Statkraft Hydro power deal reaches 12.3 TWh across three long-term PPAs

The Statkraft Hydro power deal announced this week is the third long-term power purchase agreement (PPA) the two companies have signed in 2026, bringing the combined volume secured for Hydro’s Norwegian aluminium plants to 12.3 TWh over a decade.

The latest agreement covers approximately 8.8 TWh of electricity, at an annual supply of 876 GWh, to be delivered between 2031 and 2040 in Norwegian electricity price area NO5. Add that to the two PPAs signed in April 2026, covering 0.9 TWh per year in 2029 and 2030, and 1.3 TWh per year from 2031 to 2038, and the picture is materially larger than any single announcement suggested.

How the 12.3 TWh breaks down across price areas

According to Hydro, the full portfolio of three agreements splits across two Norwegian price areas: 8.8 TWh to be delivered in NO2 and 3.5 TWh in NO3. The report announcing the latest deal referenced NO5 as the delivery area, but the aggregate figure and the price-area breakdown come from Hydro’s own account of the combined package. That detail matters for anyone modelling Hydro’s Scope 2 position: the NO2 and NO3 areas have distinct price dynamics, and locking in long-term volume at fixed terms insulates the aluminium plants from the spot-price volatility that has periodically threatened European smelter economics.

Hydro noted it is pursuing a range of sourcing options to meet future power demand, including long-term contracts, new renewable power projects, and upgrades to assets in its own renewable energy portfolio. In other words, these PPAs are one instrument in a wider procurement strategy, not the whole answer.

What each side gets from the Statkraft Hydro power deal

For Statkraft, the three agreements consolidate its position as the dominant power supplier to Norwegian heavy industry. Hallvard Granheim, executive vice president Markets at Statkraft, said the deals ‘provide stable and competitive power to Hydro’s aluminium plants in Norway over the next decade and reinforce Statkraft’s position as the leading supplier of power to Norwegian industry.’

That framing is worth reading carefully. ‘Leading supplier’ is a commercial claim, and Statkraft has an interest in making it. What is not in dispute is the scale: three PPAs, signed within the same calendar year, aggregating to 12.3 TWh for a single industrial customer is a substantive commitment by either party’s measure.

For Hydro, the value proposition is spelled out by Kari Ekelund Thørud, executive vice president of Hydro Energy: ‘Long-term and predictable power at competitive prices is vital for Hydro’s aluminium production in Norway and enables us to continue delivering low-carbon aluminium and solutions to our customers in Europe.’

That last phrase carries the ESG weight. Aluminium smelting is an electricity-intensive process, and the carbon intensity of the final product is largely determined by the emissions profile of the power source. Norwegian hydropower is, in grid terms, close to zero-emissions generation, so securing long-term supply from a predominantly hydro operator gives Hydro a credible basis for its low-carbon aluminium claims, provided the underlying generation actually remains low-carbon and the contractual structure reflects additionality rather than simply redirecting existing certificates.

The agreements do not state whether they are backed by guarantees of origin or whether the power is additional renewable generation. That is a gap worth watching: a PPA that simply reallocates existing hydro output without supporting new capacity does not improve the grid’s carbon balance, even if it improves the buyer’s reported Scope 2 figures.

With all three PPAs now signed, the immediate question is delivery: the first tranches begin in 2029, giving both parties roughly three years to ensure the operational and contractual arrangements are in place. Hydro’s next disclosure on its power sourcing mix will be the clearest test of how this package sits within its broader decarbonisation pathway.