Greenalia signs 895-MW wind power supply deal with Alcoa smelter in Spain

Spanish renewable energy producer Greenalia SA signed a deal to supply 895 MW of wind energy to Alcoa Corp.'s struggling aluminum plant in San Ciprián, Spain.

Under a preliminary agreement, Greenalia would supply up to 2,297 GWh per year from 18 wind projects in Galicia in the province of Lugo, it said Dec. 27. The agreement provides for a minimum duration of 10 years starting from January 2024.

The agreement is part of Alcoa's plan to reactivate the San Ciprián aluminum smelter in 2024. The wind resources would help ensure medium-term competitiveness for the facility, Greenalia said.

In October, Pittsburg, Pa.-based Alcoa warned that it could face production slowdowns at the San Ciprián smelter due to an ongoing labor dispute and soaring electricity prices in Europe at a time when demand for its products balloon.

Iberian power prices in the first nine months of 2021 surged 146% year over year, driven by the rising cost of gas. Spain is seeing some of Europe's most far-reaching regulatory interventions to protect consumers, with a clawback mechanism proposed on low-carbon operators.

Greenalia's selected projects have already secured grid access and are admitted for processing, with eight going to public information, the developer said.

Greenalia has a pipeline of 3,272 MW in Spain, of which 584 MW accounts for wind projects in Lugo, with grid access granted by Red Eléctrica Corp. SA in the Xove electrical substation next to the Alcoa facilities. The company expects to start construction on the portfolio by the end of 2022, pending governmental approvals and other obligations.