Mining company LKAB this week announced an increase in the pace of a fossil-free iron production project in northern Sweden. It will require large amounts of energy.
In the past six months, electricity prices in northern Norway have been significantly lower than those in the southern parts of the country, but this may change if electricity consumption increases in northern areas.
Tuesday So The state owned Swedish mining company LKAB want to speed up the Hybrit project in Gällivare in northern Sweden and increase production targets. The project will ensure that fossil-free iron is produced using hydrogen instead of coal and coke.
Hydrogen must be produced by electrolyte.
The LKAB project will require a large share of electricity production in Sweden, and this may affect prices in northern Norway as well. LKAB warns that they need 20 terawatt-hours (TWh) of electricity in 2030, which will rise to 50 TWh in 2040 and 70 TWh in 2050.
20 TWh is equivalent to 12 percent of last year’s electricity production in Sweden, according to Swedish Energy Agency It was 166 TWh.
LKAB is just one of many players who want to use more electricity to cut emissions. LKAB believes that to avoid price increases, energy production must be increased.
“We need to double our electricity production over the next 25 years, as the iron and steel industry value chain may need nearly every other TWh of energy to come,” says CEO Jan Mostrom at LKAB.
The Hybrit project is being undertaken with a major customer of LKAB, listed steel producer SSAB and energy company Vattenfall. LKAB said they will use 400 billion Swedish krona on this change over the next 20 years.
Northern Norway prices can increase
LKAB’s plans to increase electricity consumption on the Swedish side of the border may also have consequences for electricity prices in northern Norway, according to Ishavskraft’s Director of Trade Tom Eric Olsen.
– It all depends on their pace. This is a plan they have been reporting on for a long time, and they need maybe 50-55 TWh to produce iron and steel. This is one reason why price expectations in northern Norway have risen from 2027 to 2028 and beyond, Olsen says.
– When you reach 2030, you will start to approach southern Norway prices in forecasts. The power that you cannot do today, is taken from the new consumption. After that, you’ll continue for hours more calling southern Norway prices, he says.
Requires increased energy production
On Thursday, LKAB made one investment decision. The company will spend 700 million Swedish kronor on preparations for the production of fossil-free iron.
Sweden should increase electricity production to ensure that ordinary consumers are not affected by increased consumption, LKAB notes.
When I write that we need to correspond to roughly half of Sweden’s electricity production, note that we don’t want to steal it from you, so buy a wood-burning stove and a wagon. No, there is a need to increase electricity production, otherwise we will not be able to do it, as LKAB press director Anders Lindberg wrote about Twitter.
He pointed out that LKAB’s electricity needs alone could be covered by 1,200 wind turbines. is over 4000 wind turbines In Sweden. According to Lindberg, it would require about 0.5 percent of Sweden’s land area if 100 TWh of onshore wind were to be developed.
It also indicates that the company is interested in power from neighboring countries, and that Northern Norway has a surplus of energy. But then more networks have to be built.
– We should be able to buy it, if only there were enough wires over the mountains, Write Lindbergh.
Builds a little strength
So far, there is an excess of force in the upper northern region, particularly in Sweden, according to Olsen in Eshafskraft. This has contributed to the recent price drop.
– There is currently an energy surplus in the Far North of about 59 TWh per year, perhaps 7-8 TWh of this on the Norwegian side. This fits right in with LKAB’s plans, he says.
He notes that relatively little new energy is planned to be developed in northern Norway, but that more is being developed in Sweden.
– More power will be developed on the Swedish side, but on the Norwegian side there is a complete halt so far. However, developing wind power in the north may become more attractive if prices gradually rise. Olsen says there are several plans for new wind energy in northern Norway.
Is this good or bad news?
– Everything is as you see it. Our low rates in the High North provide opportunities for the future business community to establish themselves. We hope this will provide permanent jobs to the area. He says Norway is very competitive in electricity prices.
– But some northerners may fear the prices of southern Norway?
– It will undoubtedly happen if you do not continue to expand the production of new energy. And he says it’s precisely because we have such a large surplus of energy that we have low prices now.
It is not only the power lines that determine the prices. Sweden has many north-south power lines with a total capacity of five times the capacity of Anglo-Norwegian cable, but prices are still lower in northern Sweden. This is because the area has more electricity than it can export, he said.
The climate can’t wait
At the beginning of the 1930s, the production of LKAB will be completely restructured from the manufacture of iron pellets using coal and coke to industrialization. iron mushroom with hydrogen.
Production is initially expected to be 5.4 million tons per year, but the company wants to increase it to 24.4 million tons by 2050.
– The climate cannot wait, and the demand for raw materials to be able to produce fossil-free steel is already here, even before we are put on the market, says LKAB Director, Mostrom.
– What we started is the industrial and technological development that occurred in the post-war years, which culminated in the landing on the moon. In addition to the urgent climate, the new global political situation is also affecting our need to increase the pace, says Jan Mostrom.
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