News | 2nd Mar, 2010

Environment groups condemn Alcoa power deal

Tuesday, 2 March 2010
ABC News

Aluminium exporter, Alcoa, has signed a 20-year deal to use brown coal-fired electricity to power its Victorian smelters.

Latrobe Valley power generator, Loy Yang Power, will sell electricity to Alcoa until 2036, to power the smelters at Portland and Geelong.

The move has been welcomed by unions, but environment groups say the company should move towards a cleaner source of energy.

Loy Yang Power chief executive, Ian Nethercote says the deal provides certainty for both companies and their workers.

"This is a vote of confidence in Loy Yang and the way that we operate, by perhaps one of Australia's largest electricity consumers in the business," he said.

"I think that's a real feather in our cap to be able to have that joint venture with Alcoa."

A spokeswoman for the State Government says the deal means Alcoa will no longer need Government subsidies, after the current contract expires in 2016.

Environment groups have condemned the deal.

Mark Wakeham from Environment Victoria says Alcoa should be moving away from coal-fired power.

"We have a gas-fired power plant being built not far from the smelters at Mortlake that could be powering the power stations," he said.

"We also have a lot of wind power in western Victoria. So by hitching its future to a brown coal power station, Alcoa is going to raise a lot of questions."