Australia's single largest energy user, Tomago Aluminium, says it remains committed to shifting as close as possible to running on renewable energy by 2035, but it will need certainty of supply to achieve its goal.
In its submission to the federal government's consultation paper on green metals opportunities for Australia, the company acknowledges its role in the rapidly emerging sector.
It presently produces about 600,000 tonnes of Aluminium, which requires a constant power supply of 950 megawatts, or about 12 per cent of the state's power.
But the plant's output is set to increase in coming decades with Bloomberg NEF Research estimating a 12-fold increase in aluminium demand to meet Net Zero by 2050.
"However, the challenge for Tomago... is to ensure that sufficient renewable energy and transmission infrastructure at an internationally competitive price is available in this time frame. This is far from clear," Tomago's submission says.
Tomago Aluminium general manager Jerome Dozol said the company stood firmly behind the federal government's green metals and 'Future Made in Australia' policies.
"Low-cost, firm clean energy is a key driver to sustaining primary aluminium production in the future," he said.
"Tomago's Repowering project is the opportunity to drive large scale decarbonisation of the Australian energy system. We're committed to working closely with both federal and NSW governments to make this necessary step happen as it is time sensitive for Tomago."
The global market is presently dominated by low-cost production in China and the Middle East, which is facilitated by an abundance of low-cost fossil fuel energy sources. This, in turn, has resulted in lower capital costs, which have resulted in rapid expansions in output in recent decades.
For Tomago to become a green metal producer and play a key role in government's Future Made in Australia plan, the company said there needed to be a focus on retaining and upgrading existing facilities.
It identified three critical issues:
- The need to support industry in investing in low-cost firmed renewable energy sources to regain our long-term competitive advantage in energy costs once the capital base of the new energy system is depreciated. This can be done through production incentives for low-carbon aluminium that align with the term of new energy assets that Tomago can underwrite.
- A predictable, streamlined approvals process for the entire value chain, that prioritises the development of renewable energy generation assets including the supporting transmission infrastructure.
- Capital investment support through industry led tax and grant incentives to support investment in new production technologies in the aluminium industry, noting the long-term nature of the technology development required to pilot and prove these new technologies.
If these three conditions are met, the company said it could continue to play critical part of A Future Made in Australia and continue to be a major driver of its regional economy.
Minister for Industry and Science Ed Husic, oversees the Future Made in Australia Fund and the National Reconstruction Fund.
He told a dinner at the University of Newcastle on Thursday night that the global car, construction and energy industries would be key drivers of future demand for green steel and green aluminium.
"The Superpower Institute reckons a strong green iron industry could be worth as much as $295 billion per annum, triple the value of our current iron ore. Another estimate suggests green aluminium could be worth an extra $60 billion to Australia over coming years," he said.
But unless government's moved quickly to get the energy side of the equation right, Australia's opportunity to capitalise on green metals would be lost.
"For the sake of the 1000 workers (at Tomago Aluminium) and the 5,000 indirect jobs the plant supports, we need a plan for the future of this industry," he said.
