Federal energy minister Chris Bowen has confirmed the Albanese government is in talks with Australia’s biggest aluminium smelter to help keep it afloat with a cheap supply of firmed renewables, potentially backed by publicly-owned gentailer Snowy Hydro and the Clean Energy Finance Corporation.
The Rio Tinto-owned Tomago Aluminium smelter in the New South Wales Hunter region launched closure talks in late October, after warning that it cannot secure a commercially viable energy contract beyond 2028.
“We continue to engage with stakeholders on a viable pathway for Tomago,” the smelter’s chief Jerome Dozol said at the time.
“Unfortunately, all market proposals received so far show future energy prices are not commercially viable, and there is significant uncertainty about when renewable projects will be available at the scale we need.”
Bowen – who on Tuesday attended the launch of construction at AGL Energy’s 500 megawatt (MW), four-hour Tomago battery, adjacent to the smelter (see below) – has this week confirmed rumours the Albanese government is in talks to help remedy the problem.
“It’s no secret that [industrial] Minister [Tim] Ayres and I have been in discussions with Tomago to see what could be done,” Bowen told reporters at a press conference in the NSW Hunter region to announce the latest recipient of federal Labor’s Solar Sunshot funding.
“I’m not going to comment in detail about those discussions but we have Snowy, we have CEFC, we have other government agencies that we have been looking at to see whether we can’t provide more renewable energy to Tomago.”
The quest to lock in sufficient new energy supplies fast enough to replace retiring coal – the contracts for which have, historically, been heavily subsidised through preferential electricity pricing – is not unique to Tomago Aluminium, but rather a problem facing smelters across Australia and around the world.
Rio Tinto’s global head of aluminium Jerome Pecresse, visited the company’s Australian smelters in May and noted that their dependence on coal put them on the wrong side of the emissions and cost curve. But he also said that the falling cost of battery storage was promising.
“There is no reason why, in some places, (reliable supply) cannot be achieved via a mix of intermittent renewables, provided that this mix is ‘firmed’ via batteries and other sources,” Pecresse said at the time.
At the press conference at the Hunter Business Park on Tuesday, Bowen was keen to point out that, on this point, federal Labor and industrial giants like Rio are on precisely the same page.
“Tomago’s management said when they announced that they were considering Tomago’s future, the problem is there’s not enough renewable energy, not that there’s too much,” he said, alluding to the Sussan Ley-led Coalition’s renewed efforts to slam the brakes on Australia’s energy transition.
“There’s not enough. We agree with that, so let’s look and see what more we can do,” the minister said.
“We are seeing downward pressure as a result of more renewable energy. Renewable energy is the cheapest form of energy. Deniers and delayers deny that. Every economist and scientist acknowledges it. The CSIRO knows it. And that’s why we’ve got to keep going.”
Already, a number of major big battery projects are in the works in and around the Tomago smelter, including the, 2,000 megawatt-hour (MWh) AGL battery that broke ground on Tuesday, in a ceremony attended by Bowen.
Elsewhere in the Hunter region there is the partially commissioned 850 MW, 1680 MWh Waratah Super Battery, and the 500 MW, two-hour battery proposed for the Liddell site, again by AGL Energy, with joint backing from the federal and NSW governments through the respective CIS and LTESA schemes.
There are more of the same making their way through planning and approvals queues, including the Upper Hunter BESS a 400 MW, 800 MWh battery being proposed by North Harbour Clean Energy, and some of the new wave of solar-battery hybrid projects are also targeting the region.
The NSW government is also pulling state levers to put the “urgent” delivery of new synchronous condensors on the fast-track, to bring the grid up to pace with the shift to renewables and the exit of coal.
NSW transmission company Transgrid has secured 10 smaller syncons to boost its system strength, and orders for seven much larger machines have also been put in for the Central West Orana renewable energy zone.
In his own comments on the government’s discussions with Tomago, federal industry minister, Tim Ayers, told ABC Radio on Tuesday that a big part of the problem facing heavy industry in 2025 comes from not acting fast enough to replace Australia’s fleet of outgoing coal plants.
“The Coalition did nothing over the decade leading up to 2022, so generation fell away, transmission fell away, nothing got built, 24 out of 28 coal-fired power stations announced or brought forward their closure, and nothing came in to replace it.
“Now this sort of wrecking impulse that’s overtaken the Liberals and Nationals, creating uncertainty around the sector, when they do that wrecking, Australians hurt,” Ayers said.
“The main thing here is for us all to work together; each of us, the states, the Commonwealth have got different responsibilities here. But as in this Tomago situation, or any of the other smelters around the country, we get good outcomes when we’ve got the states and the Commonwealth and the owners on the same page.”
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Sophie Vorrath
Sophie is editor of Renew Economy and editor of its sister site, One Step Off The Grid . She is the co-host of the Solar Insiders Podcast. Sophie has been writing about clean energy for more than a decade.
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