The works council at Alcoa Corp’s (NYSE:AA) aluminium smelter in Spain have urged government authorities to shorten as much as possible the permitting process for new wind energy projects that have committed to feed the power-hungry facility, Spanish media reported on Thursday.
Alcoa is also looking into solar PV as a power supply option, but it is important to have these wind farms up and running since multiple power contracts depend on it, the works council president, Jose Antonio Zan, told media on Thursday after the council’s regular meeting with the smelting plant management.
The San Ciprian smelter in the region of Galicia, north-west Spain, is currently curtailed until January 2024 to give Alcoa time to invest in plant refurbishment and secure competitive power purchase agreements (PPAs) after years of grappling with high energy bills, profit losses and an ensuing labour dispute.
The search for renewable energy PPAs started in late December 2021, just after the US aluminium producer struck a new labour agreement to curtail the San Ciprian plant for two years but keep the wages going.
Alcoa first signed a preliminary agreement with Spanish renewables group Greenalia SA (BME:GRN) to reserve up to 2,297 GWh of power per year generated from new wind farms in the Galicia region. This pre-agreement was followed by similar arrangements with developer Capital Energy and utility Endesa SA (BME:ELE), with both committing to supply wind energy from their Galicia-based projects.
Of the three, Greenalia was to only one to progress its pre-agreement to a PPA, signing up to provide 183 MW of wind power to meet 45% of the San Ciprian smelter’s needs until the end of 2033.
Zan and the workers are now pushing to unlock more wind projects so the plant can secure stable long-term power prices by the time it opens the gates in 2024.
Alcoa is currently working with the companies with which it signed pre-agreements, and is holding talks with other suppliers, local media outlet La Voz de Galicia reported, citing a company statement. There was no mention of talks with PV power suppliers specifically, the outlet noted.
At the end of May, the Alcoa San Ciprian works council met with Galicia’s regional government to discuss wind energy permitting and other issues that the plant is facing. According to the government’s statement, the region could only fast track projects that meet all environmental requirements and allocate 50% of their power production for industrial processes based in Galicia. However, the permitting for power projects of 50 MW and above is the job of Spain’s central government.
While praising PPAs as a good solution, the regional government said that an energy framework tailored to the needs of the energy-intensive industry is still necessary.
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Alcoa's Wagerup refinery. Image: Alcoa
