Energy Central-News Article

The director of Stellantis Vigo, Ignacio Bueno, took advantage of the assembly of the Cluster of Automotive Companies of Galicia (Ceaga) to put on the table the keys to the automotive industry of the future. Through an analysis of the drift of the sector towards the electric vehicle, the engineer highlighted the keys to improving the competitiveness of the companies in the area, which include squeezing labor flexibility, optimizing costs by "shelling out every opportunity for improvement" and, above all, betting on "developing energy autonomy". On this last point, the Balaídos plant wants to lead by example. In addition to the solar panels announced last year, the management's intention is to incorporate energy from the many wind farms installed in the community so that 100% of its consumption comes from renewable sources. And, according to this media, negotiations are already at an advanced stage with at least three companies and would only be pending the group's approval.

According to what Bueno said during his speech on Wednesday at the headquarters of the CTAG, the automotive companies have to bet on lightening their bills with saving measures and also with "self-sufficiency through renewable energies", since they have become "a factor of competitiveness between countries" and between Stellantis' own plants. Without going any further, manufacturing a car in the Kénitra factory (Morocco) costs 50 euros less than in Vigo in terms of energy expenditure.

The group's boss, Carlos Tavares, continues to push to cut all possible costs, and the energy issue has become the current battlefield in Balaídos. In September last year, the plant already announced the installation of 27,000 photovoltaic modules to cover 14% of the factory's needs with an investment of more than 12 million euros together with Prosolia Energy to obtain 23.7 GWh/year of decarbonized electricity. Now it is the turn of wind power.

Stellantis Vigo is in advanced talks to reach a PPA (power purchase agreement) agreement with a company in the sector. With this, the factory will buy the energy from a wind farm installed (or to be installed) for a given period of time. Something similar to what the factory in Figueruelas (Zaragoza) is doing, although in its case four windmills will be installed on its own land, which will be managed by Prosolia Energy, which will assume the investment and distribute the energy to the company for at least 15 years.

According to the industry sources consulted, at a time when the "market is hot", the horizon being considered in the PPAs being negotiated is 10 years, although they usually last from 5 to 15 years, as is the case of the one reached in the Aragonese plant of Stellantis. As far as prices are concerned, everything will depend on the guarantee of origin of the energy itself, i.e., whether it has a greenfield guarantee of origin (which proves that it is 100% renewable) or not. In the first case its value is higher, in the order of 50 euros per megawatt (MW) for a 10-year contract; in the second case, on the contrary, it is around 60 euros/MW.

According to the same sources, the offers that have been arriving in the last few days range from 40.2 euros to 64 euros. However, the final agreement will depend on whether or not an intermediary is involved.

Having a renewable energy source is vital for Stellantis, which through its Dare Forward 2030 plan has already set targets of reducing the carbon footprint of the value chain by 50% by 2030 and net CO2 emissions to zero by 2038. All this while converting 100% of its range to electric in Europe within seven years.

Plans

Although these talks between the companies and Stellantis Vigo are at an advanced stage, the approval of the multinational is key for them to proceed. Tavares tightens by lighten costs and, in particular, rushed to Vigo to reduce energy bills, which is why they also fight for access aspires to access the aid package for the gas-intensive industry for consumption in the paint shop.

The management of Balaídos continues to press the Government to find a formula with which to access the 450 million framework approved at the end of 2022. The Minister of Industry, Trade and Tourism, Reyes Maroto, recently announced changes to expand the sectors that will be able to receive this aid based on the CNAE (the national classification of economic activities), among which automobile manufacturing is still not included. "It is proving difficult," acknowledged sources at Stellantis Vigo, "but we will not stop insisting because it is important."