Green switch faces backup risk for big business: Alcoa

Portland is one of Australia’s biggest energy users but one of the co-owners of the aluminium smelter has concerns about batteries filling the void between coal and renewables.

Alcoa CEO Bill Oplinger speaks at the Melbourne Mining Club. Picture: Brendan Beckett

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The owner of Victoria’s biggest electricity user, the Portland aluminium smelter, said batteries were ill-equipped to back up renewables for heavy industry and called for a balanced national energy policy as planners weigh the risk of Spain’s blackout testing gaps in Australia’s grid.

As Labor pledges to double the share of renewables to 82 per cent by 2030, Alcoa – one of the world’s biggest aluminium producers – said Australia must keep gas to back up solar and wind to ensure large manufacturers can keep operating through the energy transition.

“One of the things that Australia needs to figure out is, what is that backup source? And I’m not convinced it’s batteries. I’ve not seen an economic business case that says batteries can be built big enough to back up a smelter,” Alcoa chief executive Bill Oplinger told the Melbourne Mining Club.

“We will be big users of gas for a long time into the future, and we need an energy policy on the east coast that allows us to be competitive locally in Portland.”

Peter Dutton has promised the Coalition’s gas policy – forcing LNG exporters to increase onshore supply and ­decoupling local prices from ­overseas markets – will slash industrial retail gas bills by 15 per cent. Labor’s energy policy is dominated by renewables and batteries, along with support from gas under the government’s Future Gas Strategy.

The intervention from Alcoa comes as Australian energy authorities study the risk of widespread blackouts in Spain and Portugal being repeated here.

The Australian Energy Market Commission’s independent reliability panel is expected to study lessons from the Spanish blackout as it considers a review of how the national power system would recover from a major disruption.

The Australian Energy Regulator is also monitoring the situation, sources said, while the grid operator said it would work with international power system operators to assess the issue in Spain.

Alcoa’s own aluminium plant in Spain was hit by the shock blackout that left millions of homes and businesses without power this week.

The Alcoa boss said the nine-hour outage had raised fresh fears over energy security.

“We don’t yet have an answer to what happened in Spain, and in my view we will take some days to evaluate the risks associated with further loss of power. If the grid doesn’t understand what happened, it is very difficult to have an electricity-intensive business in a place that can’t guarantee that the electricity will stay on,” Mr Oplinger said.

Labor on Thursday hit back at critics saying it was too heavily focused on green energy, with Anthony Albanese saying it had a balanced energy policy.

“I reject that categorisation (of having a renewable-focused policy). That’s the Liberal Party’s characterisation,” the Prime Minister said.

“Our plan is for renewables, backed by gas, backed by batteries and backed by hydro firming capacity. That’s our plan.”

Speaking to The Australian while campaigning at one of his McMahon electorate’s pre-poll booths, Energy Minister Chris Bowen reiterated Labor’s commitment to net zero and its renewable energy plan.

“Both sides of politics are, allegedly, committed to net zero,” Mr Bowen said.

“As Scott Morrison identified when he was prime minister, it (net zero) is in our economic interest.”

Mr Bowen said Labor’s plan was “sensible” and the Coalition offering was void of detail.

Alcoa, the largest US aluminium producer and part-owner of Portland, said gas needed to be given greater focus and the next government needed to deliver a coherent energy policy on Australia’s east coast that would allow the Portland facility to be competitive with its overseas competitors.

“Energy, energy, energy. The piece we have to get right is this balance of energy and, for us, a domestic gas policy because we’re big users of gas,” Mr Oplinger said.

Former UK prime minister Tony Blair this week declared the current plan on emissions reduction was “doomed to fail”, with Keir Starmer’s office defending the government’s policies as being “practical and pragmatic”.

Debate over the energy transition was also reignited after the blackout in Spain as authorities search for answers on the root cause of the unusual “system black” event.

The Prime Minister was pressed on whether the energy transition was “doomed to fail” but said only that Labor’s plan for energy was “backed not just by the conservation groups, but backed by the Business Council of Australia, the Australian Industry group and other businesses”.

“The government hasn’t shut any fossil fuel projects,” Mr Albanese said. “We haven’t done that. We have said, though, that 24 out of 28 coal-fired power stations announced their closure under the former government, and that the former government did bugger-all.”

Matthew Camenzuli, an independent candidate in McMahon – where recent polling suggested the former Liberal would give Labor a close run – said voters he had talked to were more focused on affording energy rather than the “ideology” underpinning it.

“I keep hearing it again and again, people just want to see a government that’s going to put cheap and reliable energy ahead of the cost of their ideology,” he said.

“Voters feel unheard … the cost of energy is built into the cost of everything.”

The ALP, teals and Greens have launched scare campaigns attacking Mr Dutton’s energy plan, warning voters that the Coalition’s nuclear power will cost too much and take too long to bring online.

It comes as former UN climate chief Christina Figueres made a last-minute intervention in Australia’s election debate, saying Cyclone Alfred had put the climate wars back on the political agenda ahead of Saturday’s poll.

“I’m on tenterhooks waiting to see what happens this weekend as Australians head to the ballot box, because, honestly, I thought the so-called climate wars there were over. Apparently not,” Ms Figueres said in a newsletter post. “Alfred put climate firmly back on the electoral agenda.”