Finance

High gas prices also hit the industry hard

Large electricity consumers, such as the zinc and aluminum industries, have even had to scale back production. It is no longer profitable to run factories at full capacity.

This applies, for example, to the Nyrstar zinc factory in Budel. A private connection to the main voltage grid is no superfluous luxury for Nyrstar. Making zinc is a complicated chemical process that requires a lot of electricity. Nyrstar in Budel consumes approximately 1 percent of total Dutch electricity consumption. That is as much electricity as a large Dutch city needs annually.

Higher costs, but yield remains the same

Once the zinc has been melted down into ingots, it can be sold, but making money is now difficult. The zinc price remains the same, while the production costs, of which a very large part is linked to the electricity price, rises.

That means you earn less on it and at some point you don’t even make any money with it. As a result, only 30 percent of the plant’s total capacity is now used.

Aluminum smelter Damco Aldel

The same story applies to aluminum smelter Damco Aldel near Delfzijl in Groningen. A lot of electricity is needed to convert bauxite raw material into aluminum and losses are also incurred at this factory.

The factory now employs 325 people on a permanent basis. The jobs may be at stake.

Electricity price tripled

Electricity prices have tripled this year. It was especially hard in the last few weeks. This is due to the high gas price. A lot of electricity is generated from natural gas.

Electricity producers pass on the natural gas costs they incur to their customers. In practice, this means that the electricity price rises with the natural gas price and falls when the gas price falls again.

Government compensation?

It has been agreed in the Budget Memorandum that factories will receive compensation for a year. But other countries have regulations that last longer, and the Dutch factories want that too.

Without the scheme, there is no level playing field for us and we cannot compete with other parties, they say at Damco Aldel. And that while the Dutch factories are known for being sustainable.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button