The expansion of the electricity and gas markets currently taking place in Spain has so far been insufficient to attain competitive prices in the most significant energy consumption areas of Grupo Villar Mir's industrial companies.
The solution to this unacceptable situation requires Villar Mir Energía to continue its efforts to become an integrated energy operator that is able to act throughout the entire gas and electricity value chain. This will allow it to take advantage of the synergies that exist between energy generation, sales to consumers and the Group's own energy consumption.
The key element to this strategy is to search for a competitive supply of natural gas, which necessitates the acquisition of LGN storage and logistics assets. Similarly, it will be necessary to acquire a balanced portfolio of energy generation technologies, as well as increasing its current presence in the sale of gas and electricity.
The Fertiberia and Ferroatlántica industrial groups are highly energy dependent, due to their nature as energy-intensive basic industries. Thus, Fertiberia is the leading industrial consumer of natural gas in Spain, consuming 0.55 bcm (550 million cubic meters) per year, and Grupo Ferroatlántica is the third largest electricity consumer in Spain, with consumption of around 2,300 GWh.
With the two-fold aim of ensuring a long-term independent supply at competitive prices of both natural gas and electricity and of participating more actively in energy markets, through its subsidiary Energía y Gas de Huelva, S.A.U., Grupo Villar Mir has filed an application for government authorisation for the construction of an energy complex known as the "Energás Project" in the outer port of Huelva, consisting of:
- An exempt (not paid by consumers) regasification plant with a regassing capacity of 4 bcm of gas per year, expandable to 6 bcm.
- Two liquid natural gas storage tanks with a capacity of 150,000 cubic metres each, with a third tank planned for expansion.
- Two combined cycle units for electricity production from natural gas, with a capacity of 450 MW each; and
- Port infrastructures for the berthing of methane vessels, as well as direct gas supply lines to Fertiberia's ammonia plant in Palos and to the combined cycle plants.
The Project falls under the "2008-2016 Gas and Electricity Sectors Plan" and is classified as being exempt from mandatory third party access to the installations. The said exemption has already been authorised by the National Energy Commission.
In 2011, a favourable Environmental Impact Statement was obtained for the regasification plant, while the EIS for the combined cycle units is still pending.
In 2012, we expect to receive authorisation for the entire Project, which would commence operations in 2017.
Sale of electricity and gas
Electricity has been supplied to more than nine million connection points, representing around three thousand GWh per year, both directly and via the subsidiary Enérgya VM, acquired in 2012. More than 1900 MW of electricity has been commercialised under the special electricity generation regime.
Furthermore, at year-end, Enérgya VM signed the first gas contract with a large client, Fertiberia, for the supply during 2012 of 2,100 GWh of electricity, a third of its total annual energy consumption.
Wind farm in Huesca (Aragon)
At the start of 2011, Villar Mir Energía, S.L. was awarded a concession for a 20 MW wind farm in the town of Castelflorite (Huesca), as part of the wind power public tender auctioned by the Government of the Autonomous Community of Aragon.
Throughout 2011, work was undertaken to obtain all the permits necessary to commence the construction thereof.
The project as a whole is expected to begin commercial operations in 2014.