Alcoa signs repowering contracts for Portland smelter

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Alcoa Corporation has signed repowering contracts with multiple power generators for the Portland Aluminium Smelter in the Australian state of Victoria.

The five-year repowering contracts between the Portland Aluminium Smelter and AGL, Alinta Energy and Origin will each commence on 1 August 2021, when an existing agreement with AGL expires at the end of July. “After a year characterized by uncertainty, we are delighted to have clarity on the smelter’s power supply,” said Michael Gollschewski, president of Alcoa Australia.

The Australian Federal Government has committed, subject to approval, to provide up to USD14.8m (A$19.2m) per year for four years to underwrite the smelter’s participation in the Reliability and Emergency Reserve Trader scheme. The arrangement will recognize the smelter’s ability to rapidly shed load when required to help protect the power grid from unexpected interruptions when it is under duress.

In addition, in recognition of the valuable contribution Portland Aluminium makes to the Victorian economy, the Victorian Government has agreed in principle to a funding package to match the Federal Government contribution.

Repowering contracts for Portland smelter help secure grid stability

As a stable base-load energy consumer, the smelter will continue to provide important market stability as more renewables enter the system. Currently, more than 30 % of the smelter’s consumed electricity is derived from renewable sources, including electricity from a nearby wind farm. This figure is expected to grow with implementation of the Victorian Renewable Energy Target that aims to reach 50 % renewables by 2030.

The financial terms of the energy agreements are confidential and are conditioned upon a number of matters, including finalization of the government agreements.

Portland Aluminium is an unincorporated joint venture between Alcoa of Australia (55 %), Citic Nominees (22.5 %), and Marubeni Aluminium Australia (22.5 %). Alcoa of Australia is owned by Alcoa (60 %) and Alumina Ltd (40 %).

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