ENDESA S A : releases its final report on the biofuels testing in As Pontes, revealing the plant lacks environmental, technical and economic viability

• The coal and sewage sludge mixture would generate between 76,000 tonnes and 106,000 tonnes of ash each year that could not be sent for disposal in non-hazardous waste landfills as it would exceed the limits for selenium, sulphates and dissolved organic carbon.
• The thermal power plant would also emit mercury at levels close to the maximum established.
• To be able to operate the plant in an acceptable manner, significant investments would be necessary, both in 2021 and in the 2023-25 period, due to the impact of corrosion caused by sludge in the boiler.
• The megawatt hours produced with the mixture would be 30% more expensive than that of a combined cycle plant; therefore, it is not viable in the market.
• The negative impact on cash flow would amount to 625 million euros over ten years.
• Members of the Monitoring Commission were informed of the study's conclusions today.
• Engineering firm Foster Wheeler does not advise the use of sludge in the facility
• As part of the Futur-e Plan for As Pontes Endesa has authorisation for the connection to the grid of 1,493 MW of wind power in Galicia, the construction of which will directly create jobs for 1,250 people for six years.
• These renewables projects will join the international competition to attract new business investment to the area, which is already taking place at the Compostilla (el Bierzo) and Carboneras (Almería) thermal power plants.

The mix of biofuel and coal that Endesa has been testing in its thermal power plant in As Pontes (A Coruña) will not lengthen the useful life of the installation for several reasons, not least those related to the environment. The company will therefore continue with the process of closing the plant that started in December 2019 and will activate its Futur-e Plan to search for business projects to be implemented in the town. Members of the Monitoring Commission who have supervised this process were briefed today in the final report.

A far-reaching change in conditions in the sector (rising prices of CO2 rights and a significant drop in the price of gas) have made the As Pontes thermal power plant, which runs on imported coal, less competitive and it has been excluded from the market since April 2019. Based on this, Endesa submitted a formal request for closure on 27 December 2019. This was not without warning, as Endesa had already announced that the plant would be decommissioned months earlier, after a long period of inactivity.

Despite all this, Endesa has been analysing alternatives for operating the plant using sludge and biomass combined with coal in different proportions, the results of which have been negative. The final option examined was a mass mixture of 50% coal (in two variants, one at 50% Adaro, and another at 25% Adaro and 25% from Kazajo) and sewage sludge. The tests were carried out under the supervision of the Ministry for Ecological Transition, the Xunta de Galicia and As Pontes Town Council. The results of the tests were unsatisfactory, both from an environmental and technical point of view, as well as from an economic point of view. Therefore, the closure process will continue and the Futur-e Plan will be launched. The final report was presented to the Monitoring Commission, made up of the aforementioned entities, today.

According to the report from the Endesa technical committee in charge of monitoring these tests, using these production methods would have caused serious environmental problems. The combustion of the coal and sludge mixture causes the emission of mercury in values close to the legal limit allowed. Another insurmountable difficulty lies in the great increase in the generation of ash, which would grow between 187% and 276% and entail producing one ton of ash for every three or four tons of CO2 avoided. Therefore, solely by operating two of the four groups in the plant for 3,000 hours, between 76,000 tonnes and 106,000 tonnes of a by-product would be produced each year that would not be acceptable for non-hazardous waste landfills as it exceeds the threshold values for selenium, sulphates and dissolved organic carbon, with a significant increase in the metals and metalloids generated during combustion.

From a technical point of view, the power loss of each group has been verified, which would drop from the current 350 megawatts (MW) to 245/260 MW, with sudden load fluctuations of up to 35 MW, preventing the plant from operating in secondary markets. It has also been shown that the fuel would corrode the boiler tubes, increasing the cost of maintaining the installation. In addition, the mixture tested breaks down during storage, causing costly operational and economic loss.

Neither are there economic reasons for continuing to operate the thermal power plant by mixing coal with sewage sludge, because the MWh generated using this method would cost around 65 euros (similar for both variants of the coal mix), which is 15 euros (30%) more expensive than that produced in a natural gas combined cycle plant. With such a high operating cost, the thermal plant is not viable as it is outside the electricity market, where a price of 47.3 euros per MWh is expected for 2021. Adapting the installation to the new situation would also require significant investment and have high fixed costs, with an estimated negative impact on cash flow amounting to 625 million euros over the ten years the plant would be in operation.

Without the endorsement of Foster Wheeler

Foster Wheeler an engineering firm responsible for assembling more than 1,600 steam generation units over the years totalling 96 GW, has studied the suitability of the As Pontes thermal power plant for use with a mixture of coal and sludge. In addition to a large financial outlay, resolving the technical difficulties indicated in a study prepared at the request of Endesa would require an extended time for tests and studies.

Foster Wheeler indicates that the As Pontes thermal power plant would need to have a fuel homogenisation park. It also warns that the plant would suffer an 'evident reduction in power' and that the presence of alkali metals and chlorine would cause 'abrasion, fouling and corrosion' in the boiler, leading to 'unacceptable degradation levels' according to the company's design standards. To avoid this problem, it would be necessary to coat the boiler tubes with a product called Inconel, which is extremely costly and difficult to apply in an existing installation outside a workshop.

To summarise, Foster Wheeler warns that the continuous consumption of the mixture of coal and sewage sludge 'would require a transformation of the boiler that should be defined on the basis of studies and analysis, including test campaigns specifically designed for each of the grinding, combustion and boiler performance systems'.

Alternatives for the workforce and the economic future of the area

In anticipation of an adverse test result, Endesa had advanced with its designs for the As Pontes Futur-e Plan, a project containing actions to mitigate the impact of the reduction in activity at the plant, aimed at promoting the development of economic activities and job creation in the area. The company has stressed that these proposals are flexible and that it is open to examining new viable initiatives going forward to achieve these development goals in the areas were the plants are located, adding its efforts to the initiatives and leadership of the government agencies involved.

Endesa also has an agreement with workers' representatives whereby it undertakes that no employees will be made redundant. In fact, some staff have already taken voluntary early retirement or are taking part in a relocation procedure, so that the current workforce consists of 81 people. Other employees will be involved in dismantling the facility, a task that will last four years and will also require the support of around 130 workers from contractors, who will participate in professional training courses organised by Endesa for this purpose.

The As Pontes Futur-e Plan means searching for business alternatives for the installation being closed. To this end, Endesa has opened an international competition which offers companies, institutions and other public and private agents the opportunity to present viable alternatives through a participatory, transparent and open process, to look for sustainable investment and job creation projects at the plant location. It is the same model that is being followed to generate business opportunities in other Endesa thermal power plants facing closure, such as Compostilla (el Bierzo) and Carboneras (Almería).

Under this economic revitalisation programme, which will be developed in close collaboration with regional and municipal agents, all interested parties are invited to submit business initiatives to take advantage of the plant and its facilities. An independent committee will evaluate the projects, whose members will include significant regional and local representation, as well as members from academia.

The Futur-e Plan also includes heavy investment in new renewable energy projects. Specifically, Endesa plans to develop up to 1,505 MW of new wind capacity in Galicia between 2021 and 2026, representing an estimated investment of 1.58 billion euros. This will provide jobs for an annual average of around 1,250 people throughout the six-year construction phase and 125 in the subsequent, 25-year operation and maintenance phase. Of this capacity, the connection of 1,493 MW has already been confirmed.

About Endesa

Endesa is the leading electricity company in Spain and the second largest in Portugal. It is also the second largest gas operator in the Spanish market. It is an integrated business operation that encompasses activities from generation to marketing and through Endesa X it provides added value services to decarbonise energy used in homes, companies, industries and government agencies. Endesa is firmly committed to the United Nation's SDGs and therefore strongly promotes the development of renewable energies through Enel Green Power España, the electrification of the economy and Corporate Social Responsibility. We also work in the latter area through the Endesa Foundation. We have around 10,000 employees. Endesa is part of Enel, the largest electricity group in Europe.