Alinta Energy’s $4bn offshore wind farm to power Alcoa’s Portland smelter

Alinta Energy has proposed a giant $4bn offshore wind farm off the Victorian coast, a potential power source for the Portland aluminium smelter.

Offshore wind projects are expected to triple globally this decade. Picture: Macquarie Group

Alinta Energy has proposed a giant $4bn offshore wind farm that could supply Victoria’s Portland aluminium smelter and the broader east coast grid, one of the biggest bets yet on the renewable technology attracting support from big name investors.

The electricity giant – Australia’s fourth largest electricity retailer and owned by Hong Kong’s Chow Tai Fook – is considering building a 1000 megawatt wind farm called Spinifex, located 10km off the coast of Portland in southwest Victoria.

Spinifex would connect to the national power grid via Alcoa’s Portland smelter and make the industrial site among Australia’s first smelters to be powered by up to 100 per cent renewables, following a move by NSW’s Tomago facility to flag a move to a predominantly renewable energy based power supply by 2028.

While wind turbines on land still remain a dominant renewable source, offshore wind projects are expected to triple globally this decade due to their cost of energy tumbling by two-thirds since 2012 with giant turbines now higher than the Eiffel Tower.

Alinta joined incumbent supplier AGL Energy in striking a power supply deal with Portland back in March and said the next steps would be conducting wind monitoring, site surveys and starting consultation in 2022.

“The area we’re investigating is around 500km2 and about ten kilometres from the shoreline, and the great thing about this proposal is that we can connect to the grid via the smelter and won’t need to build new powerlines on private land,” said Alinta’s head of project development, Kris Lynch. “We think the wind farm would need to be around 1000MW to be viable.”

Alcoa’s Portland uses 10 per cent of Victoria’s energy use each year, and produces almost a fifth of the nation’s aluminium output. It also provides a critical role in keeping Australia’s power grid stable and its owners said the offshore wind farm could help meet a need for the aluminium industry to cut emissions.

“This proposal offers an ability to make a step change impact to Portland Aluminium’s carbon footprint and we welcome the opportunity to be involved in supporting the early phase investigations of a such an exciting renewable project on the Australian energy landscape,” Portland Aluminium smelter manager Ron Jorgensen said.

It also represents fresh competition for the developers of the $10bn Star of the South wind farm off Victoria’s Gippsland coast, which plans to supply 20 per cent of the state’s electricity needs once the giant Yallourn coal plant closes, providing a major source of renewable energy as the grid moves away from coal.

Banking giant Macquarie Group is also considering developing Australia‘s first offshore wind farm off Victoria’s Bass Coast, adding to its growing clout as a major developer of the renewable energy source in the UK and Asia.

More than 2,000GW or 40 times the capacity of the national electricity market could potentially be installed within 100km of current substations and excluding environmentally restricted and low wind areas, according to the federal government-linked Blue Economy Cooperative Research Centre.

Over 10 projects with a combined capacity of 25GW are already in the planning stages in Australia with four new offshore wind zones in Gippsland, the Hunter and Illawarra Coasts and North West Tasmania all considered prime development sites.

South Australia is also looking at its first offshore wind farm, one of a dozen in the planning stages across Australia, with the $1.75bn, 600 megawatt wind farm requiring 40-75 turbines measuring up to 260m high and creating power for 400,000 homes.

The Morrison government is also backing the emerging industry, introducing legislation to unlock investment in offshore energy projects and establish a framework for the construction, operation, maintenance and decommissioning of offshore electricity projects.

The interest in offshore wind mirrors a broader transformation of Australia’s power grid expected to pick up pace this decade.

Some 3300 megawatts of new renewables was added in 2020 with the Australian Energy Market Operator stating Australia was undergoing the fastest energy transition in the world due to both rooftop solar and large scale renewables generation.

Nearly half of the current capacity of the power grid, some 22 gigawatts of coal generation, would close by 2040 requiring 51GW of solar and wind and 15GW of storage to be added in its place, according to the Clean Energy Investment Group.

Investors have so far only committed to build 3GW of the 51GW renewable total, sparking concern by green generators in the market while major power transmission projects must also be built to ensure electricity can be distributed to users and households.