Endesa, Alcoa ink pre-PPA for over 900 MW of wind power in Spain

Spanish utility Endesa SA (BME:ELE) said today that it has signed a pre-agreement to supply 906.3 MW of wind power to US aluminium producer Alcoa Corp (NYSE:AA) for its San Ciprian smelter located in the Galicia region, northwestern Spain.

The contract, which will presumably mature into a full-fledged power purchase agreement (PPA), will enable Alcoa to secure up to 1,349 GWh of competitively priced electricity per year for ten years. The power supply will commence in 2024 when the San Ciprian smelter is due to re-start activities after two years of curtailment, Endesa said.

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The San Ciprian plant struggled to make profit for years due to high energy costs. Alcoa considered closing the facility, but reached an agreement with its workers in late December to curtail the activity until it makes further investments in the plant and secures PPAs.

The US company already signed pre-PPAs with Spanish renewables developers Greenalia SA (BME:GRN) and Capital Energy to procure over 1,400 MW of wind power for the smelter.

Just like Greenalia and Capital Energy before it, Endesa is also offering the customer wind power from its Galicia-based projects. The utility said that its renewables subsidiary Enel Green Power Espana is currently handling the permitting for the 900 MW-plus wind projects reserved for Alcoa. These projects have previously secured grid access and connection points, Endesa added.

The utility currently operates 565 MW across 23 wind farms in Galicia.