Saturday, February 22, 2014

Alcoa smelter closure opportunity to close coal power at Anglesea and in La Trobe Valley

This week Alcoa announced the closure of it's Port Henry smelter and aluminium rolling mills after a review conducted in the last year. This is a definite employment blow to the Geelong region, coming on the heals of the Ford factory announced closure. But it can provide impetus to reduce carbon emissions for climate change mitigation action by shutting down polluting coal fired capacity now excess to demand.

The Alcoa closure will result in a reduction of about 360MW of electricity currently supplied to the Port Henry aluminium smelter. The Anglesea coal fired power station provides 150MW of this power, which would mean a need to reduce La Trobe Valley generating capacity by about 210MW.

"It is highly likely that existing coal-fired generation at Anglesea, or at Yallourn or Hazelwood, will be mothballed or retired as a result of Alcoa's decision, despite Alcoa's stated intent to try and find a buyer for the Anglesea mine and power station," said Mark Wakeham, Environment Victoria acting chief executive.

I wrote at this time last year that this was an opportunity to close down the highly polluting 150MW Anglesea power station and coal mine, all of the power of which was consumed by Alcoa's industrial processes. See the current Petition to close Anglesea Power Station

It is also an opportunity to expand wind power on the surf coast to increase local employment and power generation. Moving from a polluting brown coal mine and power station to wind turbines should be a no-brainer, but the current state government is beholden to coal intersts and a small cult of anti-wind activists holding back substantial investment in wind farm development in regional areas.

Alcoa denies carbon tax involved in decision

Treasurer Joe Hockey, when asked by a journalist at a doorstop interview if the carbon tax had been scrapped Alcoa would still be open? replied:

"At the end of the day, the carbon tax is a greater cost on business. It is a massive cost on aluminium smelters, obviously. A 50 year old smelter with a carbon tax is never going to be cost effective."

But Alcoa did not mention the carbon tax in it's statement but listed global excess capacity and the age of the plant. In a clarifying statement Alcoa said "the carbon tax was not a factor in the decision to close Point Henry smelter or the rolled products business".

Tony Abbott also blamed the carbon tax at a press conference in Canberra, contradicting the statements by Alcoa:

"...we are all mourning the closedown of the Alcoa plant at Point Henry near Geelong. I regret to say that's the carbon tax doing its job. It's not the only factor in the closure of Point Henry, don't get me wrong, but the whole point of the carbon tax is to stop operations like that, and under the former government's own modeling, there was going to be a 60 per cent plus reduction in aluminum manufacturing here in Australia."

Opposition Leader Bill Shorten said in a statement:

It’s clear that a global oversupply of aluminium, dramatically falling aluminium prices and a high Australian dollar made the continuation of these operations impossible. The Opposition is pleased the Portland Aluminum smelter in Victoria will continue normal operations, as will Alcoa’s bauxite mining and alumina refining operations in Western Australia.

Mark Wakeham from Environment Victoria raised the necessity for the Victorian state Government to reassess the state's energy needs and direction, highlighting a challenge for whoever wins government of the state later this year.

“Coming in the wake of announcements by Victoria’s car manufacturers it highlights the rapidly changing nature of Victoria’s economy and the need for political leadership to develop new 21st century industries for places like Geelong.

“As a very large user of electricity, Point Henry’s closure will also have ripple effects across Victoria’s electricity industry. Point Henry has an average demand of 360 MW of electricity, equivalent to one quarter of Hazelwood power station’s output.

“It is highly likely that existing coal-fired generation at Anglesea or at Yallourn or Hazelwood will be mothballed or retired as a result of Alcoa’s decision, despite Alcoa’s stated intent to try and find a buyer for the Anglesea mine and power station.

“Some may attempt to blame the carbon price for Alcoa’s closure. They would be wrong. Alcoa has received free permits for 94.5% of their emissions since the carbon price was introduced - a package worth $1.7 billion over 5 years. Alcoa’s electricity bill has been subsidised by Victorian taxpayers for decades, to the tune of over $100 million every year, and in 2012 Alcoa received a further $40 million assistance package from the federal government.

“The fact is that there is an oversupply globally in aluminium smelting and the industry is increasingly moving to countries with larger smelters and low emissions energy sources. Victoria is the only place in the world where aluminium is being produced with brown coal powered electricity.

“The challenge for the Napthine Government and whoever wins the 2014 state election is to develop a jobs agenda and plan that looks forward to the industries of the future rather than stranding existing jobs and industries through industry policy that ignores the direction the rest of the world is heading.

“The Napthine Government has so far failed this test, pursuing outdated and uneconomic industries through its attempts to develop a brown coal export industry, and shrinking jobs in wind and solar energy and energy efficiency through their anti-environment and anti-jobs policies.

“The rapid loss of manufacturing jobs requires a change in direction and a rethink. Why isn’t Victoria protecting and pursuing jobs in solar water heating in factories in the south-eastern suburbs, or wind tower manufacturing in Portland, instead of attempting to develop new polluting brown coal mines?

“We call on the state government to urgently develop a jobs plan that will protect the environment, create regional jobs and put Victoria at the forefront of the cleantech industries of the 21st century.”


Anglesea coal mine and power station up for sale?


Alcoa wants to find a purchaser for the Anglesea coal mine and power station according to their statement:

"The Anglesea coal mine and power station that currently supplies approximately 40 percent of the power needs for the Point Henry smelter has the potential to operate as a stand-alone facility after the smelter closes. Alcoa of Australia will actively seek a buyer for the facility."

The state Government in October 2011 renewed the Alcoa Anglesea Coal Mine 50 year lease extension despite community concern and opposition.

The closure of the Aluminiam smelter and milling means some 550 loyal employees in Geelong will lose their jobs. Alcoa has operated in the community at Geelong for 60 years supplying employment but also contributing pollution affecting the health of the community and the destruction of an otherwise pristine coastal environment.

“Alcoa plans to walk away from this community, sell up and disappear. Given that the Anglesea coal mine and power station will no longer support large scale industry and employment, neither Alcoa or any prospective buyer has the social licence to continue to operate one of this country's most polluting power stations in such close proximity to our homes and school.” said Sally Groom, Anglesea parent and local resident.

While new wind farm developments can be vetoed by anyone within a 3 kilometre radius due to draconian planning requirements, Alcoa’s Anglesea coal mine and power station are less than a kilometre from homes and the local primary school. Harmful coal dust from the mine blows directly onto the town, as do numerous toxic emissions from Alcoa’s old and outdated power station.

“Amongst these harmful pollutants is the powerful respiratory irritant sulphur dioxide, which Alcoa’s Anglesea operations emit in amounts 3 times greater than Hazelwood, a notorious polluter 10 times larger than Anglesea Power Station. Fine dust particles or particulates from both the mine and power station pose a very real risk to health, with the World Health Organisation recently classifying them as carcinogenic.” said Dr Cameron Shaw, medical specialist and Anglesea resident.

Surf Coast Air Action argue that a recent supply demand snapshot from the Australian Energy Market Operator showed that the Victorian energy market has no need for the 150MW generated from Anglesea, which has been been used for supplying about 40 per cent of the power needed by Alcoa’s Point Henry smelter. But Alcoa registered an electricity generation license application with the Essential Services Commission on 22 November 2013.

“Alcoa has made no effort to liaise with the local community regarding their recent licence application. The small number of jobs within the mine and power station cannot justify the continued harm caused to the health of Anglesea residents and visitors and the ongoing destruction of Anglesea Heath, a rare and heritage listed heathland of national significance.” said Regina Gleeson, local tourism operator and Anglesea resident.

It is clear with the closure of the smelter, the brown coal fired Anglsea power station is not needed for the Victorian grid. Closure of the coal mine and power station would increase public health in the region. If stability of power supply is a concern, then more wind farms should be considered to enhance grid diversity of supply.

“It is a disgrace that this international company is walking away from a commitment to workers in Geelong but is also seeking to profit by onselling the mine and power station. It is an abuse of the goodwill extended to Alcoa by the Anglesea community, who have for so many years tolerated a dangerous and polluting coal mine and power station at our back door in order to support workers in Geelong. Rather than trying to make some money and back away from their obligations to clean up the mess they have made, Alcoa should close their Anglesea operations and direct funds and employment toward a careful, thorough and responsible rehabilitation of the mine and power station site.” said Dr Jacinta Morahan, medical specialist and Anglesea resident.

Opportunity for conservation

Geelong Environment Council appealed to Alcoa in April 2013 for protection of the internationally recognized and ecologically significant Anglesea Heath once there was no longer a need to continue mining coal and operating the power station.

The heathlands where the coal is mined has been identified as a rich and biologically diverse vegetation community being home to more than 700 plant species, inckuding a third of all native orchid species in Victoria. Four plant species are listed as rare or threatened at a national level, and 21 have been listed by the Victorian Government as rare, threatened or endangered at a state level. Four species, the Anglesea Grevillea, Anglesea Leek Orchid, Large Bearded Greenhood (Anglesea) and the Anglesea Grey-gum, are found nowhere else in the world.

The heathlands also provide important habitat and refuge for a range of native animals, including the critically endangered New Holland Mouse, Southern Brown Bandicoot, White-footed Dunnart, and Yellow-bellied Glider.

That time has now come to close and rehabilitate the mine and power station, that will result in substantial environmental and health benefits for the community.