Alcoa inks nine-year deal to supply 300MW electricity to Portland Aluminium

Portland Aluminium Smelter’s future operations are supported through a new agreement with AGL Energy Limited, commencing in 2026. Image credit: Alcoa

Aluminium giant Alcoa of Australia announced a new agreement with AGL Energy Limited (AGL) to deliver 300 megawatts of power supply to Portland Aluminium Smelter in Victoria in a push to support its future operations.

The 300-megawatt power supply is covered under the nine-year arrangement, which goes into effect on 1 July 2026, the day the current contracts with AGL expire. 

This volume equals roughly 50 per cent of the energy needed to produce the nameplate capacity of 358,000 tonnes of aluminium per year for the facility. Currently, the smelter is producing roughly 75 per cent of that output.

The deal, according to Alcoa Australia President Matt Reed, is good news for the smelter’s more than 760 employees and contractors.

“On behalf of the Portland Aluminium joint venture partners, we are pleased to continue our longstanding relationship with AGL with this agreement that provides a strong platform for the long-term future of the smelter, which is central to the social and economic fabric of the region,” Reed said.

The ASX-listed company also revealed that along with producing over 20 per cent of Australia’s aluminium, the smelter has a substantial economic impact on Victoria, paying out more than $68 million in direct salaries, wages, and perks in 2022, in addition to $179 million in local supply contracts.

As the main driver of Victoria’s energy demand, the smelter also continues to offer crucial market services and aids in preserving the stability of the electrical grid as more renewable energy enters the system.

Currently, electricity from renewable sources, such as the close-by Portland wind farm, accounts for about 40 per cent of the smelter’s electricity use.

With a strong focus on renewable energy and in line with the company’s goal of achieving net zero carbon emissions by 2050, Reed said Alcoa was exploring solutions for the smelter’s remaining power requirements starting in mid-2026.

“South-Western Victoria has been identified as a renewable energy zone with several emerging projects that could potentially provide green power to the smelter and the wider region,” Reed said.

Portland Aluminium is a wholly owned subsidiary of Alcoa of Australia Limited, CITIC Nominees Pty Ltd, and Marubeni Aluminium Australia Pty Ltd.

Alcoa of Australia Limited is 60 per cent owned by Alcoa Corporation and 40 per cent held by Alumina Limited.