Romania, Alro records loss in H1 2021 due to high energy prices

, SEE Energy News

Aluminum producer Alro Slatina, the Romania’s largest electricity consumer, has posted losses in the first half of 2021. The company’s management pointed to high electricity costs and electricity supply uncertainties as the main challenges it encountered during the period.

The company’s revenues amounted to 314 million euros in the first half of 2021, up by 13 % compared with the same period of last year. Namely, the company produced and sold more primary and processed aluminum and at higher
prices.

However, it couldn’t fully benefit from the higher prices as it faced challenges in the local electricity market. Alro is the biggest industrial consumer of electricity in Romania and energy has a significant share in the company’s production costs. Alro posted a net loss of 9.7 million euros in H1 2021, compared to a net profit of 51.5 million euros in the same period of 2020.

The statement from the company said that, in the analyzed period, the electricity market was dominated by a surge in electricity prices delivered in the local market that also embed a surge in the prices of the emission certificates. As
a direct consequence, several of the company’s electricity suppliers claimed amendments regarding the prices contracted in advance, reducing quantities and terms of payment, while others have cancelled the previous signed
contracts.

Last month, Alro said that it plans to invest in the construction of gas-fired power plant in Slatina, cogeneration power plant in Tulcea and several solar and wind based electricity generation facilities.

This decision comes after the company announced that it would have to procure about 30 % of its electricity needs on the spot market because several suppliers have terminated long-term supply contracts with Alro. According to the
company, the gas-fired plant should be commissioned by 2025, while RES projects are even further along – the deadline is 2030. Besides, the company also plans to sign new, long -term (up to 15 years) electricity supply contracts
with reputable suppliers.

Alro is the largest electricity consumer in Romania and its consumption profile is mainly band-type (constant through the day). Last year, the company consumed 3.22 TWh of electricity (a decrease compared to 2019), worth some 330 million euros.