Linde has well-established routines for hedging electricity in such a manner that fluctuations are evened out, leading to more stable and predictable pricing of gas products towards our customers. This routine has served well over many years with positive feedback from and value to our customers.
However, we are still exposed to some risks associated with purchasing electricity on NordPool. EPAD is the transmission cost that sets the zone-specific prices and the Nordic region consist of 12 zones. Following an accident in the Oslo fjord, where a boat’s anchor damaged the transmission cables between Norway and Sweden, Norway’s export capacity was reduced to less than half. This led to a spike in EPAD costs because electricity had to be transported in non-optimal ways. It took roughly 3 weeks to repair the damaged cable but now it is restored - and transmission cost stabilized.
As a result, Linde has incurred substantial cost increases, which has been beyond our control to mitigate. Therefore, we have introduced a temporary surcharge in order to recover the cost increase. It is a temporary surcharge and it will only be added to electricity intensive products (LIN, LOX, LAR, LIC product family) and the surcharge level will be modest and align with the fair share of the actual cost increase.
Please reach out to your customer contact if you have further questions.