Production of alumina and aluminium are energy intensive processes using approximately 2.5MWh per tonne of alumina and 15.75 MWh per tonne of aluminium. In 2017 the transformation of AWAC’s asset portfolio which commenced in 2014 is essentially complete. During that period AWAC actively managed its portfolio of assets resulting in the closure or sale of high cost assets and concentrating on low cost production facilities. This transformation process included the challenge of replacing reliance on more expensive and inefficient fuel sources at existing operations such as the alumina refinery located at San Ciprian in Spain.  In 2017, energy represents approximately 23% of the cash cost of production for alumina and 24% for aluminium.

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.

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.

Results Energy utilisation 

Energy security is vital to maintaining a sustainable business. AWAC’s operations are highly dependent on the availability to base load energy. In 2017 energy consumption for all of AWAC's operations globally on a full facility basis was approximately 41 million MWh (2016: 42.8 million MWh). The decrease in year-on-year energy usage is largely attributable to the curtailment of production at the Point Comfort alumina refinery and the power outage at the Portland smelter in December 2016 and resultant partial curtailment of production that took approximately six months to rectify.

AWAC's alumina refineries total energy intensity (energy per tonne of production) in 2017 was 2.25MWh per tonne of production, a 0.9% improvement compared to 2016. Direct energy intensity for alumina production remained static year on year.

Total energy intensity at AWAC's Portland aluminium smelter in 2017 declined by approximately 3.1% in comparison to 2016 due to the impact of recovery from the December 2016 power outage and subsequent loss of production and production restart.

Energy Security

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. More than 90 per cent of the gas supply to the three refineries in Western Australia is secured under long-term contracts until 2020. In 2015, Alcoa of Australia secured approximately 75 per cent of its gas supplies to 2032.

 It was announced in 2017 that an agreement was reached to supply electricity to the Portland aluminium smelter for a period of four years.

Results and goals

Alcoa’s long-term strategic target for its global business (that includes AWAC’s alumina refineries and the Portland smelter) was a 10 per cent reduction in energy intensity from a 2005 baseline by 2020 and 15 per cent by 2030.  For the AWAC assets, the refineries have achieved a 3.7 per cent improvement compared to base and the smelter a 4.1 per cent improvement to base measure in 2016 however the major power disruption in December 2017 and the subsequent loss of production and production restart resulted in 0.5 per cent decline measured to the base year.

In 2017 experts were investigating whether the use of solar energy to power the calcination process and solar gas reforming (using solar energy to increase a gas streams energy by up to 20 – 30%) in the refining process.

AWAC’s Australian refineries and the Portland smelter utilise energy demand management which allows for reduction in its demand for electricity at peak demand for electricity (generally the hottest days of the year). This provides support for the stability of electrical infrastructure and avoids additional costs of electricity generation on those extreme days.

AWAC Full Facility Direct Energy consumption by source (Mines, refineries and smelters)

*Coal energy usage is higher due to the application of a higher energy content factor (14.5 actual) compared to an estimate of 10.2 applied in previous years.

** Reliance on coal declined with the closure of the Pt. Henry aluminium smelter located in Victoria in August 2014 and the subsequent closure in 2015 of the Anglesea (coal fired) power station.

AWAC Indirect Energy consumption by source (Mines, refineries and smelters) 

The decrease in electricity usage between 2017 and 2016 is due largely to the reduction in electricity used at the Portland smelter resulting from production loss due to the December 2016 power outage. Production of one potline was lost for several months.