Alcoa signs PPA with Endesa to reopen the San Ciprián aluminium smelter

On Thursday, September 6, Alcoa Corporation announced a new power purchase agreement (PPA) with Endesa to facilitate reopening the San Ciprián aluminium smelter in Spain. Endesa is a well-known power provider in Spain and a division of the Enel Group. From 2024 through at least 2030, the agreement will include power balancing services for the smelting load.

Electricity is delivered to the smelter's consumption point through balancing services directly from the market or baseload volumes from a power purchase deal with Endesa. The agreement with Endesa would cover up to 131 megawatts starting in the second half of 2025 and continuing through 2033, or little more than 30 per cent of the smelter's maximum-capacity energy needs. As the process of building wind farms progresses, the final volume and beginning of the baseload electricity delivery may be modified. The specifics of the price are private.

"This agreement demonstrates Alcoa’s efforts to find a viable solution for the San Ciprián smelter. 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 windfarms,” said Álvaro Dorado Baselga, Vice President Global Energy in Alcoa and President of Alcoa in Spain.

The parameters of a different arrangement made earlier this year with Greenalia for up to 183 megawatts will be supplemented by the agreement with Endesa. That deal, which is subject to the approval procedure for wind farms, would account for around 45 per cent of the energy needed to operate the smelter to its fullest potential.

The agreements with Endesa and Greenalia together may supply up to around 75 per cent of the base load electricity for the smelter. For the remaining 25 per cent of the smelter's electrical needs, Alcoa is still looking for solutions. Alcoa stated in December 2021 that it will halt aluminium smelting at the San Ciprián smelter for two years due to skyrocketing energy costs. Alcoa is attempting to establish power purchase agreements and make modifications during the curtailment to get ready for the upcoming restart.