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Renewable Energy
Alcoa is a strong supporter of the renewable energy (wind, solar) industry in that we acknowledge that renewable energy has a vital role to play in the solution to climate change.
Alcoa in Australia does not operate on renewable energy. However in WA we operate on gas, which is a clean transitional fuel. In Victoria we operate on brown coal and are often asked why we can’t switch to renewable energy.
Unfortunately, using renewable energy to power our Victorian operations is not currently a viable option, for a number of reasons. First, there is simply not enough renewable energy available in Victoria to power all our operations in the State. Second, renewable energy is cost prohibitive for Alcoa in Victoria in that switching to renewable sources (if they were available) would render our operations in the State uncompetitive. This would in turn have negative flow on effects to the economy, through loss of jobs and investment in local communities.
Alcoa in Australia, however, does operate energy efficient smelters compared with smelters in other parts of the world. For example, Portland Aluminium is one of the most energy efficient smelters in the Alcoa system and is amongst the most energy efficient smelters in the world by virtue of its technology and the high standard of work practices and energy management strategies that are an integral part of its operation. And in Western Australia, Alcoa’s alumina refineries are amongst the most greenhouse and energy efficient in the world.
Every tonne of alumina made by Alcoa in Australia produces less than half the greenhouse emissions and uses just over half the energy than most alumina made in China.
Portland Aluminium and Pacific Hydro
Portland Aluminium has had an arrangement with Pacific Hydro, an Australian renewable energy company, since 2000. This arrangement involves a connection through Portland Aluminium’s electricity switchyard which enables Pacific Hydro to channel energy from its Portland Wind Farm back into Victoria’s electricity grid. Alcoa continues to work closely with the Pacific Hydro team to ensure our existing infrastructure is utilised in this project.
National Renewable Energy Target
The Federal Government has plans to introduce a National Renewable Energy Target (NRET). While a mandatory renewable energy target has been in place in some states since 2001, the Government intends to extend the target to all states as well as increase the existing arrangement. The aim is for at least 20 per cent of Australia’s energy production to come from renewable sources by 2020.
The challenge with renewable energy is that it currently comes at a significant cost increase above other sources. A badly designed National Renewable Energy Target (NRET) would add significantly to our costs and, like the costs associated with emissions trading, we would not be able to pass those costs onto our customers. This means that there is a very real chance that under a badly designed NRET, Alcoa could be uncompetitive with companies overseas which are not paying for renewable energy. This could lead to significant negative environmental outcomes – click here to find out what these outcomes could look like.
We believe care needs to be taken with finalising the policy around the NRET to ensure that it’s not implemented in a way which damages high energy using companies in this country and ultimately impacts Australian jobs.
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