Alcoa's decision to close its Point Henry aluminium smelter at Geelong, at the cost of 500 direct jobs, will likely cause a ripple effect through Latrobe Valley's electricity generation sector.
Operating at an average electricity demand of 360 megawatts – one quarter of Hazelwood's generation capacity – the closure will represent a significant reduction in the state's overall electricity demand.
Alcoa announced on Tuesday it would close the facility in August, after a two-year review of the plant found it to be financially uncompetitive, due to the high Australian dollar and low commodity prices.
Environment Victoria acting chief executive Mark Wakeham said the Alcoa decision could prompt the closure of a Valley-based generation unit.
"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," Mr Wakeham said.