Fortum, Vargön Alloys sign 5-year power purchase deal

Finnish majority state-owned energy company Fortum and Swedish ferroalloys producer Vargön Alloys AB have signed a five-year power purchase agreement (PPA) with progressive pricing for delivery of approximately 0.4 TWh of electricity and Guarantees of Origin for nuclear power per annum in Sweden.

The contract term will starts in December 2024 and runs until the end of 2029, said Fortum in a press release onm Wednesday.

The power is sourced from Fortum’s nuclear portfolio in the SE3 (Stockholm) price area in central Sweden.

Long-term partnerships play a vital role in ensuring predictability in long-term energy procurement and advancing electrification in the clean transition.

The nuclear power supply agreement between Fortum and Vargön Alloys represents the commitment by both companies to work towards a more sustainable and environmentally conscious future.

“This partnership reflects our dedication to securing sustainable energy sources for our operations and underscores our commitment to environmental responsibility. We look forward to the positive impact this collaboration will have on our business and the environment”, Managing Director of Vargön Alloys Anders Lehman said.

This PPA contributes to Fortum’s strategic target to have at least a 20% share of its rolling 10-year outright generation volume hedged.

The PPA and long-term contracts are included in Fortum’s disclosure of the reported Nordic outright generation hedges.