- The pre-agreement signed between both companies is an important milestone in the negotiation process of a 10 year PPA contract from renewable sources starting 2024 onwards.
The Galician renewable energy producer Greenalia has just signed a pre-agreement to supply renewable energy to Alcoa’s aluminum factory in San Cibrao (Lugo). Consequently, Alcoa would guarantee a stable cost for a very relevant energy volume of its Lugo factory from 2024.
According to the document signed between the two companies, the group chaired by José María Castellano would commit to Alcoa to supply renewable energy up to 2,297GWh/year.
The renewable energy producer would provide this energy with wind farms fully developed in Galicia, mainly in the province of Lugo, where the Alcoa plant is located.
The regulatory framework signed would provide for minimum duration of 10 years, starting from January 2024.
This pre-agreement is part of Alcoa’s proposal to reactivate the installation on 2024, in an bullish context in terms of electricity prices. Therefore the Galician wind resource is a real opportunity to ensure medium term competitiveness of the Galician industry, and in particular, for Alcoa, through a PPA structure like the one offered by Greenalia.
To assume this commitment, in terms of time and amount of energy to be supplied, Greenalia offers up to 18 projects, all of them located in Galicia, with a total installed capacity of 895MW. These projects, already got grid access, have been admitted for processing, and 8 of them have gone to public information already. In addition, the projects offered under the agreement, have been selected based on evacuation nodes, in order to minimize the environmental impact and commissioning calendar.
It is worth to mention, that Greenalia has a current pipeline of 3,272MW in Spain, 80% of them have grid access and at a very advanced state of permitting. Among these, 584MW correspond to wind projects in the province of Lugo, with grid access granted by REE in the Xove electrical substation, next to the Alcoa facilities. Part of these projects are being processed through the National Government of Spain, and some other through the Regional Galician Government. More than 50% have already gone throught public information and it is expected that the remaining will do so at the beginning of next year, which will allow to start its construction by the end of the year.
An opportunity for development
For Greenalia “this operation is a clear evidence of our strong commitment to support the electro-intensive industry of our country; key element in national economic and labor development. In this regard, Alcoa is an essential player in the Galician industry. For this reason, we are willing to work hard so that the projects will take place on the expected calendar, “said Greenalia’ s Chairman José María Castellano. In this way, added Castellano, “Greenalia contributes with its renewables projects and structure so that the Alcoa plant in Lugo can become one of the most competitive aluminum production plants with renewable energy sources at European level, a very important step for Galicia and fundamental for Lugo”.