Portland Aluminium secures new energy contract

Alcoa of Australia (Alcoa) today announced a new agreement with AGL Energy Limited (AGL) to support future operations at its Portland Aluminium Smelter in Victoria.

The nine-year agreement covers 287 MW of power supply and takes effect from 1 July 2026. Together with a 300 MW contract finalised with AGL in 2023, the new contract will support smelter operations to mid-2035. The combined contracts will enable the smelter to produce up to 95 per cent of its nameplate capacity of 358,000 tonnes of aluminium per year. Currently, smelter production averages at about 80 per cent capacity.

Alcoa Australia Interim President Tanya Simmonds said the agreement secured power for future production requirements and would help support local jobs, economic benefits and community support for the region.

“Alcoa, together with our Portland Aluminium Smelter joint venture partners, is pleased to have reached agreement with AGL on this contract that helps provide greater certainty about the future of the 760-person workforce, local suppliers, the Portland community, and many more in the region,” Ms Simmonds said.

Portland Aluminium Smelter produces about 18 per cent of Australia’s aluminium, a metal that is essential in everyday life and key to the green energy transition. As a significant contributor to the Victorian economy, in 2023 the smelter paid more than $74 million in direct salaries, wages and benefits, $164 million in local supply contracts and $7 million in local and state government taxes.

Importantly, it also continues to provide vital market services that help provide stability to the electricity network.

Approximately 40 per cent of the smelter’s consumed electricity is derived from renewable sources including electricity generated by the nearby Portland wind farm.

The new agreement is underpinned by power sourced from across AGL’s diverse portfolio. It includes an option to replace up to 30 per cent of the contracted volume with a renewable Power Purchase Agreement with AGL.

Alcoa continues to explore other opportunities to bring more renewables into the smelter’s longer-term energy mix. Portland Aluminium Smelter has Memorandums of Understanding with the onshore Kentbruck Green Power Hub and with Alinta Energy to collaborate on the proposed Spinifex Offshore Wind Farm.  

Alcoa Portland Aluminium is an unincorporated joint venture between Alcoa of Australia Limited (55 per cent), CITIC Nominees Pty Ltd (22.5 per cent), and Marubeni Aluminium Australia Pty Ltd (22.5 per cent). Alcoa of Australia Limited is wholly owned by Alcoa Corporation.