The power cable sector is witnessing a significant shift with NKT’s strategic move to secure a long-term supply of low-carbon aluminium wire rod from Hydro. This €1bn agreement, stretching to 2033, is more than just a business deal; it’s a bold statement in the energy transition and a testament to the growing importance of sustainability in the power cable industry.
NKT’s president and CEO, Claes Westerlind, underscores the strategic importance of this agreement, stating, “This long-term supply agreement with Hydro not only guarantees a long-term, European supply of low-carbon aluminium – it also reinforces our position as a sustainability leader in the power cable industry.” This deal is a clear response to the increasing demand for medium and high-voltage power cable solutions, driven by the global push towards renewable energy and electrification.
The agreement is set to significantly reduce the carbon footprint of NKT’s power cable solutions, aligning with its sustainability goals and supporting its customers’ decarbonisation ambitions. This is not just about meeting current demands but also about future-proofing the business. Westerlind highlights the geopolitical context, noting, “Given the current geopolitical landscape, securing reliable, local supply chains is increasingly important.”
Hydro’s investment of €140m in a new casthouse to support NKT’s expanding demand is a clear indication of the commitment to building a sustainable, local supply chain. This investment will also help mitigate risks associated with potential regulatory and geopolitical changes, ensuring a steady supply of responsibly sourced aluminium.
Hydro’s president and CEO, Eivind Kallevik, echoes this sentiment, stating, “It is with a sense of urgency that Europe is now mobilising to reduce dependency on fossil fuel imports, introduce more homegrown, renewable power, and ensure security of supply of critical raw materials.” This agreement is a step towards building a supply chain that supports Europe’s energy transition, reduces energy prices, and boosts competitiveness.
The agreement also gives NKT first rights to Hydro’s REDUXA 4.0 aluminium, the lowest embodied carbon grade available, and future REDUXA 3.0 aluminium, which Hydro is targeting to have a 25% reduced carbon footprint by 2030. This is a significant move in the right direction, but it also raises questions. How will other players in the industry respond to this strategic move? Will we see more such agreements in the future? And how will this shape the power cable industry’s approach to sustainability and supply chain management?
Moreover, this agreement comes on the heels of NKT’s framework agreement with Enexis Netbeheer to supply medium voltage power cables, signed in October 2025. This further solidifies NKT’s position in the market and its commitment to supporting Europe’s clean power grid ambitions.
The energy sector is watching closely. This deal could spark a wave of similar agreements, driving the industry towards more sustainable practices. It could also accelerate the development of low-carbon technologies and strengthen Europe’s position in the global energy transition. However, it also underscores the need for robust policy frameworks to support such initiatives and ensure a level playing field. The ball is now in the court of policymakers and other industry players to respond to this challenge.
