Spanish renewable energy group Greenalia SA (BME:GRN) announced on Thursday that is has signed a power purchase agreement (PPA) to supply up to 183 MW of baseload wind energy to a smelter owned by US aluminium producer Alcoa Corp (NYSE:AA) in Spain.
The PPA signing comes some five months after Greenalia and Alcoa reached a preliminary agreement for the supply of renewable power to the San Ciprian smelter, which had been struggling to stay afloat amid sky-rocketing electricity prices.
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As agreed at the time, Greenalia committed to supply the electricity from a group of wind farms it is planning to install in the region of Galicia, with a focus on those developed in Lugo province where the San Ciprian smelter is located.
On Thursday, Greenalia said it had selected 29 wind projects with a combined capacity of 924 MW to meet the new commitment to Alcoa. The company estimates these projects would require an investment of over EUR 1 billion (USD 1.06bn).
Under the PPA, the power supply will commence in 2024 and run until the end of 2033. Alcoa will then be able to satisfy 45% of the smelter's needs for power to work at maximum capacity, Greenalia added.
After securing the supply commitment from Greenalia in December 2021, Alcoa went on to sign similar pre-PPA arrangements with Capital Energy and Endesa SA (BME:ELE) to secure wind power for its smelter.
(EUR 1.0 = USD 1.053)