The Australian Government will underwrite revenue earnt by Alcoa’s Portland smelter for reducing its power use when supply is tight.
The Portland aluminium smelter is a major user of electricity. It uses around 10% of Victoria’s electricity.
It can reduce its demand for power to give priority to other users. This helps ease pressure on the electricity grid. This is known as the Reliability and Emergency Reserve Trader (RERT) service.
The government will guarantee to pay Portland for this service up to $76.8 million over 4 years to 2024–25, subject to negotiation.
The underwriting is temporary. It will cease when post-2025 electricity market reforms are in place. The reforms will better value the essential system services provided by large industrial users.
In return for government underwriting, Portland must participate in the RERT as much as possible.
The Australian Government is working productively with the Victorian Government to ensure further assistance is provided to the smelter.
Securing Victoria's energy system The Hon Angus Taylor MP, Minister for Energy and Emissions Reduction; the Hon Dan Tehan MP, Minister for Education, joint media release 14 December 2020