The management of Montenegrin aluminium producer KAP announced that it has started the preparations for the complete shutdown of production as of 15 December, due to extremely high electricity price proposed by their supplier, state-owned power utility EPCG, as of 1 January 2022.
During 2021, KAP paid 45 euros/MWh (without VAT) for electricity supplied by EPCG. However, in recent months, the price of electricity on the exchanges skyrocketed, exceeding 250 euros/ MWh. EPCG is not willing to suffer financial losses due to the fact that it procures a part of electricity from imports, which is why it offered a new supply contract to KAP, valid from 1 January 2022, with the price of 183 euros/MWh.
Uniprom, the owner of KAP, said that it will not be able to operate with such high electricity prices and it will be forced to shut down the company and lay off some 500 workers.
Uniprom said that it received a draft of a new supply contract, according to which, the price for February 2022 will be based on the price of baseload on the Hungarian electricity exchange HUPX for the month of January, with a 15 % discount for paying the bill on time. Based on current HUPX prices, the new price would be above 183 euros/MWh, which is unacceptable. Moreover, KAP is the only company which received contract proposal with increased prices, while other companies within same consumer category as KAP, will continue to pay 45 euros/ MWh in 2022.
EPCG said that the average price at which it imported electricity during the eleven months of 2021 is 92 euros/MWh. During this period, EPCG supplied a total of 526,424 MWh of electricity to KAP, which amounted to earnings of 23.7 million euros. If compared to prices on HUPX in the same period, the value of supplied electricity to KAP is 53.4 million euros.
