Victoria’s Portland aluminium smelter has been secured after an electricity deal struck with the nation’s biggest energy retailers backed by support from the federal government, announced in December.
Alcoa will keep the smelter operating until 2026 will protect around 500 jobs and other workers in the region that rely on the plant’s continued operation. The smelter accounts for 14 percent of jobs in the Portland area.
Prime Minister Scott Morrison said the announcement was welcome news not only for the 500 local employees and the region, but also for the Victorian electricity system.
“Our support means keeping jobs and keeping the lights on,” he said.
“This demonstrates the real confidence that industry, manufacturers and businesses have in Australia as we emerge from COVID 19.
“The number one focus of my government’s National Economic Recovery Plan is jobs, and with Australia having restored the jobs lost during the COVID-19 recession, every one of our policies is focused on securing jobs like those at Portland and creating new ones.”
Under the agreement with the federal government, the Alcoa-operated facility will see Portland reduce its energy demand at peak times, making more electricity available to the grid and helping Victoria avoid blackouts.
Minister for Energy and Emissions Reduction Angus Taylor said the agreement between the Commonwealth and Alcoa recognised the smelter’s important role in helping to stabilise the state’s electricity network and the jobs it supports.
“The Portland smelter is Victoria’s largest energy consumer, and provides unique and valuable energy services to the grid” he said.
“Securing its ongoing role will help Victoria keep the lights on during times of high demand, such as days of extremely hot weather and help Portland to be appropriately compensated for the grid services it provides.”
The federal government will provide up to $76.8 million over four years to secure Portland’s participation in the Reliability and Emergency Reserve Trader (RERT) scheme.
The smelter’s support from the RERT means Alcoa is compensated for the reliability services it provides to avoid shutdowns caused by intermittent energy supply in the Victorian grid.
Local Member for Wannon, Dan Tehan, said the announcement was welcome news for the community.
“This is fantastic news for not only the Alcoa Smelter workers but also the community of Portland as it keeps locals in jobs and builds the Portland economy,” he said.
Under the agreement, Portland must participate in the RERT to the maximum extent possible to help ensure the stability of the electricity grid.
The Portland facility represents around 10 per cent of Victoria’s electricity demand each year and produces almost 20 per cent of the nation’s aluminium output.
The agreement will help strengthen the Victorian electricity grid which has been fragile following the closure of the Hazelwood coal-fired plant in 2017 and the rapid uptake of intermittent renewables.
The agreement is temporary and will end once post-2025 electricity market reforms are in place that better value the essential system services provided by large industrial loads.