Both companies have signed a PPA (Power Purchase Agreement) that also incorporates energy management agreements that Alcoa may have with other companies.
Endesa will provide 1,151 GWh per year at a stable price that will come from part of the energy generated by 816 MW of wind farms in process in the north of Galicia. The towns surrounding these parks will benefit directly in terms of employment and economic activity.
Enel Green Power España (EGPE), Endesa’s renewables subsidiary, plans to invest more than 1,000 million euros to build these wind farms in the provinces of Lugo and A Coruña, which will cover a third of Alcoa’s demand to resume aluminum production in 2024.
Endesa and Alcoa have closed their long-term electricity purchase agreement, known as PPA (Power Purchase Agreement), which will allow energy to be supplied at a stable price to the primary aluminum plant in San Cibrao, on the north coast of Galicia. As established in the preliminary agreement reached in February, the alliance has a duration of 10 years and will be effective in 2024, coinciding with the date on which Alcoa plans to reactivate its electrolysis tanks after the break due to high energy prices. Endesa will invest more than 1,000 million euros in building the wind farms with which it will supply the complex, which are in the process of being classified as backbone projects by the Xunta de Galicia.
With this agreement, Endesa will provide a third of Alcoa’s energy needs at the San Cibrao plant. Specifically, it will supply up to 1,151 green GWh for each of the 10 years, a volume that will come from the new wind farms that Endesa’s renewables subsidiary, Enel Green Power España (EGPE), hopes to build in the provinces of Lugo and A Coruna. A part of the electricity generated in these parks will thus be used to supply Alcoa.
The plants have a total of 816 MW of renewable capacity and will generate 274 operation and maintenance jobs, in which local labor will prevail. All the parks will be built in the provinces of A Coruña and Lugo, so the energy they produce will revert directly to the well-being of the area through the generation or maintenance of a significant volume of employment and economic activity.
The wind energy projects associated with this collaboration have access and connection to the transport network. In this sense, the energy company has already officially applied to the Xunta de Galicia for their classification as exceptional projects for priority processing, in order to be able to meet the legal milestones for their processing and construction.
The company anticipates that wind power will be gradually incorporated into the PPA from 2025 and as the new renewable parks come into operation. This will prevent the emission of more than 600,000 tons of CO2/year into the atmosphere, equivalent to the absorption capacity of 3.84 million trees, and is part of Alcoa’s plan to reactivate primary aluminum production in San Cibrao from 2024, ensuring stable prices with which Endesa helps the competitiveness of the Galician industry and the Alcoa complex, established in 1980 between the Lugo municipalities of Cervo and Xove.
With this agreement, Endesa renews its commitment to Alcoa, because beyond providing a third of the energy it needs with its own wind megawatts, it will also have the role of marketer. In this way, the company will integrate and manage the energy from agreements that Alcoa may have with other companies.
Javier Uriarte, General Director of Marketing at Endesa, has highlighted that “at Endesa we are proud to contribute to maintaining the activity of one of the most important industrial plants in Spain, and at the same time of one of our most emblematic clients, Alcoa. On the other hand, the 816 MW of wind power that we are going to build contribute, on the one hand, to making the Spanish energy mix increasingly renewable and, on the other, reaffirm Endesa’s commitment to sustainability and the socioeconomic development of Galicia, one of the historical territories of Endesa”.
“This agreement demonstrates Alcoa’s efforts to find a viable solution for the San Ciprián primary aluminum plant,” said Álvaro Dorado Baselga, World Vice President for Energy at Alcoa and President of Alcoa in Spain. “Although these agreements represent an important advance, the success of the primary aluminum plant will depend on the development of a long-term competitive energy framework in Spain and the approval of these wind farms.”
Just energy transition
Endesa is firmly determined to advance in the energy transition and the total decarbonisation of the company’s mix in 2040, anticipating the limit set by the European Union to eliminate greenhouse gases by a decade. Already in 2024, 92% of Endesa’s peninsular energy production will be free of CO2 emissions.
To make decarbonization possible, Endesa plans to close all the thermal plants in Spain, taking over with renewable parks and carrying out a just transition. In Galicia, the Ministry of Ecological Transition already issued a resolution a few weeks ago to be able to close the As Pontes plant. The closure will be accompanied by a social and economic development program called Plan Futur-e. The fundamental objective of this plan is to replace the 1,400 megawatts (MW) of coal in As Pontes with 1,300 MW of renewables.