Endesa, the second-largest shareholder in Portugal’s Pego coal-fired power plant, which is to be shut down in November, wants the government to launch a new tender for a project worth €600 million, said the company’s chairman.
Speaking to Lusa, Nuno Ribeiro da Silva explained that the Spanish company had not reached an agreement with TrustEnergy, its current partner in the Tejo Energia venture that runs the plant, to present a joint project to replace the coal-fired plant, and criticised its decision to put forward a conversion based on biomass.
“We have designed a concept based on three pillars … renewable generation based on photovoltaic,… energy accumulation based on series of batteries [and] green hydrogen that is not only in line with the objectives of energy policies, but is also an added value for the region,” said Ribeiro da Silva.
On the table, according to information provided by Endesa, is a plan to replace the coal-fired plant that foresees “the construction of a 650 megawatt (MW) solar photovoltaic plant, the development of 100 megawatt (MW) of storage capacity with batteries and the installation of an electrolyser with a production capacity of 1,500 tonnes/year of green hydrogen.”
According to Ribeiro da Silva, TrustEnergy had adopted its concept with expected investment of €900 million while Endesa’s own is anticipated to be €600 million.
TrustEnergy is a consortium comprising Engie of France and Marubeni of Japan that owns 56% of the Pego plant, with Endesa holding the remaining 44%. On 17 May it unveiled its €900 million plan, involving the conversion of the coal-fired plant to local forestry waste, as a “short term solution” for supplying Portugal’s electricity system with renewable energy regardless of weather conditions, “until alternative solutions for the adequate integration of intermittent renewable sources are implemented.”
It explained that the functional model advocated would include the use of other energy sources in a phased manner.
For his part, the Endesa chairman said that it had presented its own project “as part of talks with [its] partner.” Of TrustEnergy’s plan, he warned that “there is a shortage of biomass to feed a ‘dragon’ of that size” and that the plant would therefore end up with “a huge problem” in vying with various industrial sectors, many of which are clients.
“We were going to create a huge problem because there is a shortage of biomass for industrial sectors that have more added value, such as paper, furniture, construction,” he said. “There is no biomass for a power station of this size.”
He stressed that “biomass, particularly for large-scale power stations, is being called into question” by European Union officials in terms of its classification as a carbon neutral source of energy. One should, therefore, he said, think about “reconverting a facility for 20 or 25 years based on a technology that has a future” rather than one whose carbon neutrality is in question.
Ribeiro da Silva also said that Endesa and TustEnergy had been discussing the project for a “number of years” without yet achieving “a convergence of ideas” on it.
“We don’t want to create any kind of conflict or complication,” he said, stressing that if there is “the opportunity to convert from a technology that is ending to a technology of the future, we are not going to make a lame, sub-dependent one..
“We have not reached an agreement and with that in mind we have been talking to the government,” he went on. “We have made the greatest efforts and clearly we have different visions of the future.
“In view of this I think what will happen is that the government will take that connection point of about 600 MW and put it out to tender – and we will be there,” Ribeiro da Silva said, indicating that Endesa would go ahead with its own individual project.
Asked about the possibility of Endesa selling its 44% stake in the plant, he acknowledged that had been some interest, “but under conditions that frankly did not interest” the company.
“We are convinced that we have a better project and more experience in dealing with these situations” than other players, he said.