Mining and Heavy Industries

Federal and Victorian governments back Aluminium smelter


The Victorian and Federal governments have struck a deal to secure the future of Alcoa’s Portland Smelter, protecting around 500 jobs in the region.

The smelter is Portland’s largest employer, directly supporting around 600 employees and contractors, and injects more than $100 million into the Portland region every year. It accounts for 14 percent of jobs in the Portland area.

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 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.

Under the agreement, the facility will see Portland reduce its energy demand at peak times, making more electricity available to the grid and helping Victoria avoid blackouts.

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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.

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.

The Victorian Government will match the federal commitment, following Alcoa securing multiple five-year energy generator agreements.

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.

“This demonstrates the real confidence that industry, manufacturers and businesses have in Australia as we emerge from COVID 19,” Morrison said.

“The Government’s support for Portland recognises its important position, not just as a large employer and key manufacturer, but also for its vital role in keeping the lights on in Victoria.

Energy and Emissions Reduction Minister 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” Taylor 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.”

Victorian Treasurer Tim Pallas said the State Government looks forward to continuing to work with Alcoa and the Commonwealth in finalising the agreement.

“We backed Portland workers four years ago and we’re still backing them today – because every single regional job matters to a Victorian family and they matter to us,” Pallas said.

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