Portland aluminium smelter: Trevor St Baker says it’s critical to keep it running
Power baron Trevor St Baker has confirmed his role in pushing a plan to keep Victoria’s Portland aluminium smelter operating.
Power baron Trevor St Baker has confirmed his role in spearheading an ambitious plan to keep Victoria’s Portland aluminium smelter operating as fears grow the industrial facility faces shutdown unless a lower-priced electricity pact can be struck.
The Australian revealed on Friday a secret negotiation was being hatched to build a coalition between Victoria’s legacy and renewable power generators to chip in to deliver cheap power to keep the under-threat smelter running for at least another decade.
Mr St Baker said he was involved in the proposal to try and broker a solution to get the smelter out of the “subsidy cycle” and on to a long-term deal that would ensure its viability for the next decade.
“Everybody in the industry knows in the Victorian market the Portland aluminium smelter not only is a major value adding job creator, but also if it closes it will only be replaced by coal-fired aluminium production in China. It’s critical to keep this smelter running.”
Portland has been under renewed threat of closure since October, when owner Alcoa announced a review of its global portfolio targeting high-cost and high-carbon-emission plants for closure. The review threatens the future of Portland’s 600 workers and also the smelter’s critical role balancing the power grid.
Mr St Baker said he would draw on his experience as a successful power supplier to big industry to bring different parties together and find a competitive solution and hoped the Australian Energy Market Operator would also offer support to get a deal over the line.
The pitch is understood to involve putting together a 10-year power offer, involving multiple generators, offering to supply Portland at an average rate of about $45 a megawatt hour — 20 to 30 per cent below the rate it currently pays under a contract with AGL Energy, which expires in 2021.
The competition regulator confirmed it had been approached by the power alliance seeking information over its plan and whether it would require special authorisation should it proceed.
“We have had contact and we have put the ball back in their court,” Australian Competition & Consumer Commission chairman Rod Sims told The Weekend Australian. “They need to let us know what they intend to do and whether that will involve co-operation between competitors or take some other form.”
If the final plan involves co-operation between competitors it would require a net public benefits test, Mr Sims added.
Victorian Energy Minister Lily D’Ambrosio said she would support the industry finding a solution to safeguard the future of the state’s Portland smelter.
“I’m aware of it but it is very much a matter for Alcoa and the power companies to negotiate,” Ms D’Ambrosio said. “We obviously support any long-term and sustainable solutions that can be found for the Portland smelter but it is very much in their hands.”
Federal Energy Minister Angus Taylor said it was critical for smelters such as Portland and NSW’s Tomago facility to remain open and competitive.
“The commonwealth is focused on ensuring that energy-intensive trade-exposed industries continue to be viable in Australia,” Mr Taylor said. “The commonwealth is open to working with Victoria on solutions that will be important for Portland, including lifting the moratorium on gas and preventing the premature closure of coal-fired power stations.”