Energy is a key resource in the production of both alumina and aluminium due to the energy intense nature of the businesses. In 2015 AWAC continued from the prior two years, to concentrate on repositioning its portfolio of assets resulting in the closure or sale of 30 per cent high cost assets and concentrating on low cost production facilities. This process included the challenge of replacing reliance on more expensive and inefficient fuel sources at exisiting operations such as the alumina refinery located at San Ciprian in Spain. In 2015, energy represents approximately 22% of the cash cost of production for alumina and 24% for aluminium.
Direct energy (coal, natural gas, fuel oil) is largely used in the alumina refining processes and is often determined by regional access to fuel sources. AWAC’s Australian and US refineries are largely dependent on natural gas – a clean transitional fuel. In February 2015, the San Ciprian alumina refinery completed its transition from reliance on residual fuel oil as its principle energy source to the cheaper, more efficient and more environmentally friendly natural gas. AWAC’s other refineries rely on a mixture of residual fuel oil, diesel and brown coal. Comparatively small amounts of petrol/gasoline and LPG are used, while biodiesel fuels power some mobile equipment and industrial vehicles on site.
In recent years the availability and rising cost of energy has been a driver for a shift in the geographical location of alumina/aluminium facilities. Energy rich regions such as the Middle East witnessed an increase in investment in aluminium production facilities. AWAC has a 25.1 per cent interest with Saudi company Ma’aden in the development of a bauxite mine and a low cost alumina refinery.
In 2015, the full impact of the closure in 2014 of the Point Henry aluminium smelter in energy usage and emissions recorded and reflected in a decrease in the total energy used..
Energy efficiency is a key factor in sustainable business and environmental performance. AWAC has achieved success in technology and process advancements that have resulted in improved energy consumption and reduced GHG emissions.
Energy utilisation and security
Energy security is vital to maintaining a sustainable business. AWAC’s operations are highly dependent on the availability to base load energy. In 2015 direct fuel purchases for all of AWAC's operations globally on a full facility basis was approximately 40 million WMH (2014: 43 million MWH). The reduction in energy usage compared to 2014 is largely attributable to the 2014 closure of the Point Henry aluminium smelter in Australia and sale of the Clarendon alumina refinery in Jamaica.
In 2014 it was was announced that a new 12 year natural gas supply agreement had been entered into for the Western Australian refineries which secured approximately 75% of the maturing energy supply requirements from 2020 to 2030. In Western Australia, AWAC's three alumina refineries - Kwinana, Pinjarra and Wagerup - are currently powered on gas sourced primarily from the North West Shelf and have two gas-fired cogeneration units.
Cogeneration is around 75% energy efficient compared to 30% to 50% for other power plants operating in Western Australia. A year’s electricity from each of Pinjarra Refinery’s cogeneration units saves approximately 450,000 metric tons of greenhouse gas emissions compared to a similar-sized coal-fired plant. That’s roughly equivalent to preventing the annual emissions from around 112,000 average cars. In addition, the cogeneration plants reduce our refinery emissions by 270,000 metric tons per year through more efficient steam generation.
Elsewhere, the Portland aluminium smelter in Victoria has secured an electricity arrangement through to 2036.
Results and goals
In 2015, alumina production decreased by approximately eight per cent compared to 2014 across the AWAC network of refineries largely due to the sale of the Clarendon (Jamaican) refinery in late 2014 and the November 2015 curtailment of production at the Suralco refinery and commencement of curtailment to the Point Comfort refinery in Texas partly offset by increased production at Australian refineries and the Spanish refinery. Over the same period, AWAC's total absolute energy usage at its alumina refineries decreased by approximately 7 per cent as a result of the refinery curtailments and sale of Clarendon.
AWAC's alumina refineries total energy intensity (energy per tonne of production) in 2015 was 2.56MWh per tonne of production, a marginal increase from 2.53MWh in 2014(2013: 2.60MWh in 2013). Direct energy intensity for alumina production remained static year on year.
Total energy intensity at AWAC's Portland aluminium smelter in 2015 improved marginally by approximately 0.2% compared to the 2014 year.
In 2010, Alcoa recommitted to driving further improvements by setting 2020 and 2030 goals focussing on decreasing energy intensity and greenhouse gas emissions. Alcoa’s long-term strategic targets for its Global Primary Products business (that includes AWAC’s alumina refineries) are a 10 per cent reduction in energy intensity from a 2005 baseline by 2020 and 15 per cent by 2030.
2015 AWAC energy management initiatives included AWAC's San Ciprian alumina refinery in Spain fully transitioned from a dependence on fuel oil as its principle source of energy to cleaner more efficient natural gas.
AWAC Full Facility Direct Energy consumption by source (Mines, refineries and smelters)
|AWAC Direct energy source||Purchased/produced||2015GJ||2014GJ||2013GJ||2012 GJ||2011 GJ|
|Residual fuel oil||Purchased||17,297,114||38,482,698||42,758,746||43,525,955||46,957,253|
*Natural gas energy usage is higher due to the progressive transition of the San Ciprian from fuel oil to natural gas as the primary energy source..
** Use of residual fuel oil dropped significantly in 2015 due to the sale of the Jamaican refinery in late 2014 and the transition of San Ciprian from residual fuel oil to natural gas.
LNG declined significantly as natural gas was introduced at San Ciprian and transitional dependency on liquid natural gas declined.
AWAC Indirect Energy consumption by source (Mines, refineries and smelters)
|Full Facility 2015GJ||Full Facility 2014GJ||Full Facility 2013GJ||Full Facility 2012GJ||Full Facility 2011GJ|
Non-renewable electricity declined significantly in 2015 due to the closure of the Point Henry aluminium smelter in August 2014. Point Henry was reliant on electricity sourced from brown coal power stations.