Oil report

Norsk Hydro steps up sustainability drive with two new divisions

OSLO, Oct 13 (Reuters) - Aluminium producer Norsk Hydro is setting up two new divisions called Renewables Growth and Batteries as it increases its focus on sustainability, the company said on Tuesday.

Hydro supplies aluminium, which is highly energy intensive to make, to a range of industries including the construction and automotive industry, among others.

“The battery sector is expected to grow very fast globally and in Europe, mainly on the back of the ongoing automotive industry transformation from fossil fuel to electrical vehicles,” Hydro said in statement.

The Batteries division would group Hydro’s current joint ventures and seek new business opportunities along the battery value chain, it said.

Hydro has a minority share in Norwegian marine batteries firm Corvus Energy, a small stake in Sweden’s Northvolt, which is building factories to make batteries for electric vehicles, as well as battery recycling joint venture Hydro Volt.

The Renewable Growth division would focus on developing renewable power  projects, initially in the Nordics and Brazil.

Hydro already operates hydropower plants and one onshore wind farm in Norway and buys a lot of renewable energy from suppliers with power purchase agreements (PPAs).

“We aim to enter projects at an earlier stage so we can take part in developing, commercialise, construct, co-own and in some places operate them,” Arvid Moss, executive vice president for energy and corporate development, said in the statement.

It will also investigate options for integrating battery storage into its plants to alleviate the costs of having to use more expensive power at peak times.

Internal recruitment for the two divisions has already started and Hydro was also looking for external candidates with the necessary specialist knowledge, spokesman Halvor Molland said

The new divisions are part of the Energy business area and will help to align the company focus on sustainability and profitability, he said.

Presenting second-quarter earnings in July, Chief Executive Hilde Merete Aasheim said Hydro would grow and diversify into the “megatrends” of recycling, renewable energy and batteries. (Reporting by Nora Buli; Editing by David Clarke)