Chris Bowen, the Federal Energy Minister of Australia, is reportedly pushing the Government agencies to secure a long-term power purchase agreement for Tomago Aluminium’s future. According to Chris Bowen, soaring electricity costs pose severe threat to the nation’s largest aluminium smelter, potentially leading it to shut its operations. He argues that Tomago’s survival ultimately lies in the grid with more renewable energy.
Bowen confirmed government agencies are working to see if more renewable energy can be provided to Tomago. He reiterates Tomago’s opinion that there’s not too much but not enough renewable energy for the smelter.
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This follows an update that Taxpayer-owned Snowy Hydro may take the lead in securing the long-term power supply that the smelter needs to keep operating. Under the proposal, Snowy Hydro would underwrite or directly sign long-term, renewable-heavy power offtake agreements, giving the smelter access to stable, lower-cost and cleaner electricity. This plan comes after growing pressure from unions, environment groups and industry bodies to reach a structural, renewable-based solution for the Hunter Valley’s largest employer and one of Australia’s most strategically critical industrial assets.
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Why Tomago’s survival matters
Tomago produces 40 per cent of Oceania’s aluminium, with a 590,000-tonne annual capacity. Its energy demand is enormous — 850 MW, or 12 per cent of New South Wales’ entire electricity load. More than 40 per cent of its operating costs are tied to power. A shutdown would instantly erase a third of regional supply, disrupting downstream industries and putting at risk thousands of direct and indirect jobs supported by one of the region’s largest employers.
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