Alcoa has announced an additional power purchase agreement (PPA) to support the future restart of the San Ciprián aluminium smelter in Spain.
This agreement was reached with Endesa, a company in the Spanish electricity sector that is a subsidiary of the Enel Group. The agreement will provide power balancing services for the smelter load from 2024 to at least 2030. Balancing services provide electricity to the smelter’s consumption point, either from base load volumes from a power purchase agreement with Endesa, via other third-party agreements, or from the market directly.
Wind power purchase agreement represents 30 % of the smelter’s energy requirement
The agreement with Endesa would include up to 131 MW beginning in the second half of 2025 and through 2033, representing slightly more than 30 % of the smelter’s energy requirements at maximum capacity. The final volume and start of the base load power deliveries can be adapted as the process to develop wind farms evolves.
“This agreement demonstrates Alcoa’s efforts to find a viable solution for the San Ciprián smelter,” said Álvaro Dorado Baselga, vice-president Global Energy in Alcoa and president of Alcoa in Spain. “While the energy agreements represent important progress, the success of the smelter will depend on the development of a long-term competitive power framework in Spain and getting the permitting process approved for these wind farms.”
Agreements with Endesa and Greenalia secure 75 % of the smelter base load power
The agreement with Endesa will supplement the terms of a separate agreement reached earlier this year with Greenalia for up to 183 MW. That agreement, which is subject to wind farm permitting process, would represent around 45 % of the energy required to meet the smelter’s maximum capacity.
Together, the agreements with Endesa and Greenalia could provide up to 75 % of the smelter base load power. Alcoa is continuing to pursue options for the remaining 25 % of the smelter’s electricity requirements.
Due to exorbitant energy prices, Alcoa announced in December 2021 a two-year curtailment of aluminium smelting at the San Ciprián plant. During the curtailment, Alcoa is working to secure power purchase agreements and make improvements to prepare for the future restart.