Alinta Energy secures licence to build offshore wind project that will power Alcoa’s aluminium smelter

The project would underpin the future of the Portland aluminium smelter, which is a major employer and a larger user of electricity.

Alinta Energy, the country’s fourth-largest electricity and gas retailer, and Japan’s largest power generation company JERA have been awarded a licence to develop an offshore wind project that could power Alcoa’s Portland aluminium smelter.

The decision, is a boost to Alinta, which is under pressure to develop new sources of power generation, and the aluminium smelter – the future of which has been under a cloud amid uncertainty about where it will draw its power from as Victoria moves to shutter its coal power stations.

The Portland smelter produces around 20 per cent of the nation’s aluminium, and the ongoing future of the facility will be welcomed by the Albanese government and the Victorian government.

Its immediate future was safeguarded when it struck a deal in 2023 with AGL Energy to supply 50 per cent of the plant’s energy needs, ensuring some 700 jobs would remain.

Alcoa’s Portland makes up 10 per cent of Victoria’s energy use each year, but the state has set aggressive targets to rapidly wean from coal,

Speaking after confirming the licence to Alinta and JERA, Energy Minister Chris Bowen said the smelter will need to call on renewable energy and the offshore wind project is a viable solution.

“A smelter like this to compete around the world will need to be able to call on renewable energy investors, consumers, insurers who will want to know that these smelters are converting their energy over the longer term as it becomes more viable, to renewable energy,” Mr Bowen said.

The state government in 2022 set a target of generating the equivalent of about 20 per cent of its energy needs from offshore wind within a decade. The target then doubles to 4GW by 2035 and 9GW by 2040. In all, Victoria sees potential for 13GW of offshore wind capacity by 2050, five times the current renewable generation in Victoria.

Alinta had been working on its offshore wind plans for some time but suffered a blow when Mr Bowen unexpected cut the proposed region in Portland where offshore wind would be permitted, which The Australian exclusively revealed.

Alinta then had to revise the details of its project, and it will not have exclusive use of the region to for up to seven years.

There is no certainty, however, that the project will materialise. Offshore wind is very expensive, and the developers will still have to undertake substantial surveys and secure offtake agreements.

Alcoa is a possible buyer of the electricity produced, though Alinta could also use it to service its customers.

Victoria, however, is extremely keen for the project to materialise – having made offshore wind a key part of its plan to transition away from fossil fuels.

Victoria has set an ambitious target of shuttering all coal power generation by 2035, requiring rapid acceleration of offshore wind.

Victorian Energy Minister Lily D’Ambrosio said the state is perfectly suited to offshore wind, and the interest from developers illustrates it will deliver its strategy.

“This is another step closer to delivering our target of at least 2 GW of offshore wind energy by 2032 and will also help us get to net zero by 2045,” said Ms D’Ambrosio.

“Offshore wind will create real benefits for Victoria and Australia’s renewable energy production – creating hundreds of jobs, support for our key industries and reliable renewable energy as coal-fired power plants close.”