TOMAGO Aluminium boss Matt Howell says he is concerned about the future of Australian heavy industry, saying renewable energy is yet to demonstrate it can provide continuous, affordable and reliable electricity.
Mr Howell said Tomago had a contract for electricity with AGL until 2028 but he was concerned what would happen after 2022, when Liddell power station was scheduled to close.
“Our concern is the instability introduced into the National Electricity Market (NEM) as coal is retired and variable output rises,” Mr Howell said.
He said solar panels and batteries made a lot of sense for houses but they were not a commercial solution for an energy intensive business such as Tomago.
“We can’t be a nation that imports all our needs,” Mr Howell said.
“If we want to make aluminium, steel, glass, bricks, cement, we need internationally competitive and reliable power, and it’s yet to be demonstrated with renewables how that can be done.”
AGL stands by its plan to replace Liddell, saying it had already been analysed as more reliable than the power station. The electricity market operator was doing its own reliability assessment.
Mr Howell said demand management was “rationing by another name” and Tomago could not afford “frequent and lengthy interruptions to supply”.
He said Tomago used about 11 per cent of the state’s electricity. It would empty South Australia’s Telstra battery in eight minutes.
He cited the late 2016 damage to Alcoa’s Portland smelter in Victoria, which needed a $240-million bailout from Canberra to keep going, as the sort of grid instability he was worried about.