Spanish steel association urges action on rising energy prices

Spain's steel industry has joined regional government and other large power consumers in demanding an immediate solution to rising energy prices that they say are putting their existence under threat.

The Unesid association said Dec. 1 it backed calls by the Association of Large Energy Consuming Industries (AEGE) in calling for a series of "urgent measures" to mitigate the impact of prices that have tripled over the course of the year.

The organizations have proposed giving them direct access to contract renewable energy in the market at a fixed price, while also pressuring the government to force power companies to fulfil their assurances that they would offer competitive prices to industrial groups which are not linked to escalating gas prices.

Industrial users usually buy their power in annual or quarterly blocks. Energy costs could rise from 60% of their costs to 75%, AEGE estimates. In the last three months, the government has backed down from proposals to charge a 90% "windfall clawback" on generators who, in exchange, agreed to support national industry through fixed price contracts.

Besides following through with that, AEGE said that a 7% generating tax that is currently suspended for the fourth quarter of 2021 and the first quarter of 2022 should be removed permanently while industrial groups could be granted an 80% discount on their transmission tariffs such as occurs in Germany and France, among other measures.

Alcoa halt

Spain's largest single power consumer, aluminum group Alcoa, said Nov. 29 it has proposed halting its electrolysis plant and anode units for two years to save costs and to keep operations running.

"In an effort to find a solution to the loss-making situation of the primary aluminum plant, Alcoa has offered the Work Committee an option that retains employment, gives the plant possibilities for the future and halts the large losses it is accumulating due to soaring energy prices," the statement said.

The suspension of the two units would last until 2024 with workers retained for the period, it said.

The smelter at the 228,000 mt/year will remain operational to ensure orders are met while the alumina refinery will not be affected, it said.

The plant has been hit by industrial action since Sept. 27 after a deadline of mid-September to find a buyer for the plant elapsed.

The company said it currently pays around three times the amount of its worldwide competitors, or around €95/MWh to supply the site.