Swedish court approves Hydro Energi’s PPA settlement with Markbygden

Norwegian renewable company Hydro Energi has settled its long-term power purchase agreement (PPA) with Swedish wind farm operator Markbygden Ett. 

Originally signed in 2017, the PPA was intended to supply 1.65 TWh annually from 2021 to 2039, backing the financing of Markbygden’s onshore wind park in northern Sweden, which had a projected output of 2.2 TWh per year.

However, due to financial difficulties, Markbygden Ett halted power deliveries to Hydro Energi on February 6, 2023, and entered a reorganisation in November 2023. By Q3 2024, the undelivered power amounted to 2.5 TWh. 

As part of the reorganisation plan approved by Sweden’s Umea district court, Hydro is set to receive €248 million ($268 million) in compensation for non-performance and voluntary contract termination, though the final amount will depend on the wind park’s future sale and a value-sharing agreement.

Hydro’s smelters in Norway maintain a stable power sourcing position through 2030, with an average annual hydropower output of 9.4 TWh and a contract portfolio of 10 TWh. Hydro continues to explore additional renewable sources, including onshore wind, to ensure cost-effective energy for its operations.