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The Challenge of Building a New Plant: Paying the Electric Bill

Bob Tita of The Wall Street Journal reports on how high energy costs hurt businesses.

The C3 Take
  • High electricity costs have been a major factor for why the number of aluminum smelters in the U.S. has declined from 23 in 2000 to four today.
  • Century Aluminum idled its Hawesville, Kentucky smelter in summer 2022 due to high electricity costs and has no plans to restart it, as forward electricity prices remain too high to make operations profitable.
  • Century Aluminum estimates that for every dollar increase in the price of a megawatt-hour of electricity, it costs the company at least $3 million in annual profit.
  • Unleashing domestic production and adopting a technology-neutral “all of the above” energy approach is crucial to lowering costs for businesses and consumers.

“Domestic production of smelter aluminum—which is known as primary aluminum—is on pace this year for 689,000 metric tons, which would be the lowest since 1950. Smelters have been steadily going out of business for years, pinched between stagnant aluminum prices and escalating power costs, which in some cases have climbed by more than one-third in recent years.”

Read the full article here.

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.

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