Norwegian firms Hydro and Lyse are to merge part of their respective hydropower production, creating Lyse Kraft DA, a hydropower company with a normal annual power production capacity of 9.5TWh, that will be owned 74.4% by Lyse and 25.6% by Hydro.

Under the terms of the agreement, Hydro remains operator of the assets operated by RSK, established in 1963 to supply power to Hydro’s aluminum plant at Karmøy, and resumes operator responsibility for Lyse’s fully owned hydropower plants. Consequently, Hydro will increase its total operator responsibility of Norwegian hydropower and wind power to 13.6 TWh in a normal year, and can use its share of the power produced by the new company for aluminum production in Norway.

“This is a great day for the future of Norwegian renewable-based industry. The agreement is strategically important for Hydro, as it secures the value of our RSK hydropower assets and contributes to predictability for further industrial development in Norway,” said Hydro President & CEO Hilde Merete Aasheim.

Lyse will become responsible for the water management and market activities with a portfolio of 9. TWh. The CEO of Lyse, Eimund Nygaard, said the agreement creates value in several areas.

“The agreement makes Lyse the third-largest power market entity in Norway and gives us a chance to build an even more competent and robust power management organization in Stavanger,” he said, adding that the operator agreement with Hydro will also give economies of scale, increased professionalism and new development opportunities for the power plants and the employees who will get a new employer.

“The power sector is changing, and we would eventually risk becoming too small to run these plants efficiently on our own. When we now join forces, we can make better use of our combined competences, including in digitalization in a larger system,” added Nygaard. 

Thirty-four employees will be transferred from Lyse to Hydro, and Lyse’s fully owned hydropower plants will become part of Hydro’s operator portfolio.

Hydro President & CEO Hilde Merete Aasheim and Lyse CEO Eimund Nygaard. (Photo: Hydro/Halvor Molland)