In the 1980s, in the United States, coal and aluminum production were each thriving industries. The production of primary aluminum depended, at that time, on plentiful, inexpensive coal – and the rich mines of Appalachia supplied it. Coal production in Kentucky reached a peak in 1990, and dozens of aluminum smelters were operating. 

Coal production has steadily declined in the region as the mines are depleted and climate change demands we continue to shift away from it, leaving a trained energy workforce idle. Along roughly the same timeline, aluminum smelting plants closed across the country, and new ones were built in places where other types of energy were abundant and cheap. 

Aluminum production requires very high temperatures, and as fossil fuels have become increasingly expensive, companies that produce aluminum have moved to places where energy is cheaper, like Canada where hydropower is available and less expensive or Iceland where geothermal power can be deployed. It’s also produced in places like Abu Dhabi, where fossil fuels are plentiful and in China.

Today, only four aluminum smelters are operating in the United States. “There were six just two years ago,” says Annie Sartor, aluminum campaign director at Industrious Labs, an environmental group working with companies and governments on policies to decarbonize heavy industries by 2045. “So this is an industry that’s been in a very steep decline.” 

In Kentucky, the similarly steep drop in coal production left entire communities economically devastated. Coal mining provided high-paying jobs that simply no longer exist. Just after World War II, around 75,000 people in Kentucky worked in mining. In 2022, that number was just under 5,000. 

Lane Boldman, director of the Kentucky Conservation Committee, has been involved in efforts to help energy communities work to build alternative economies, such as outdoor recreation. Hiking, kayaking and similar outdoor activities bring tourists. Unfortunately, such alternatives don’t create the same kinds of higher-wage jobs mining coal did. 

The decline in coal and aluminum production go hand-in-hand. There’s less coal in the ground to be mined, and what’s there is more expensive to extract, driving up the cost. Higher energy costs, in turn, make aluminum production more expensive, creating a cycle of escalating costs — and that’s not to mention the impact of burning coal on climate change.

Decarbonizing industry has long been a contentious issue. It requires entirely different processes and enormous capital investment. Since some of the technologies are considered unproven, they’re seen as risky investments making financing new, decarbonized industrial projects difficult. 

Enter the Office of Clean Energy Demonstrations

The federal Office of Clean Energy Demonstrations was established to speed up the technology needed to mitigate the effects of climate change. One of several programs the OCED manages is the Industrial Demonstrations Program, which is focused on energy-intensive industries, such as aluminum production. In March, $6.3 billion in grants to help fund 33 different projects were announced. One of the projects selected was The Green Aluminium Smelter Project by Century Aluminum.

According to the announcement: 

“Century’s preferred site for the Green Aluminum Smelter is in Kentucky, but Century continues to evaluate sites in other states. This project expects to create approximately 1,000 permanent jobs with advanced wages, represented by the United Steelworkers, and 5,500 construction jobs. Century Aluminum aims to work with job training organizations for workers who have been displaced through the energy transition.” 

The Green Aluminum Smelter isn’t a done deal for northeastern Kentucky, but considering the potential benefits to the region, the company naming the area as “preferred” is cause for optimism. The map of OCED portfolio projects shows that numerous projects are planned for the Appalachian region. 

In an area that has seen considerable negative impact due to the energy transition, projects that bring well-paying, permanent jobs could have resounding impacts. In a news conference, Governor Andy Beshear said the Century project could be the largest investment on record in eastern Kentucky, and it would be a game-changing project for the region. Along with the jobs related directly to the plant, the entire community would benefit through increased economic activity — workers and their families will shop and eat, for example. 

Why Aluminum Matters

Although historically the manufacture of aluminum has been carbon-intensive and The Green Smelter will address that issue, aluminum itself is crucial to the energy transition. Most people think about aluminum cans when they think about aluminum, but it’s used in the making of solar panels, wind turbines, batteries, car parts, transmission lines, electronics, and even armor for military personnel. 

“It’s necessary for almost everything you can think of for the energy transition,” says Sartor. “There’s such a huge demand forecast that the problem can’t be solved with just imports.” 

Supplying the aluminum needed for that energy transition alone would require all of the current capacity in the U.S. today, and that doesn’t include any of the additional products we rely on aluminum to produce.

The increasing demand for aluminum can be partially met with recycled aluminum. Unlike most other recyclable materials, aluminum doesn’t degrade with each incarnation. 

“Aluminum is a miracle metal. It’s infinitely recyclable,” says Sartor. 

Newly-made aluminum is called primary aluminum. Recycled aluminum is secondary aluminum. Kentucky’s new Green Smelter would produce primary aluminum.

Although aluminum is endlessly recyclable, each product made from aluminum has unique alloy requirements. For example, some electronics components must be entirely primary aluminum, but something like a battery case can be mostly secondary aluminum. 

“The secondary industry, the big companies that are capturing recycled aluminum and melting it back down to create the next thing, are actually some of the largest purchasers of primary aluminum,” explains Sartor. She says it’s all about getting the chemistry right for any given product.

Still, “the whole world is looking at a substantial demand increase,” Sartor observes. The Green Smelter will likely stay busy once it’s built. 

The Power Question

One potential barrier to siting The Green Smelter in northeastern Kentucky is the lack of existing clean energy infrastructure in the state. According to Boldman, part of the reason more projects aren’t already underway is the issue of interconnection. The energy market in Kentucky is particularly complex partly because so many different entities are involved, and partly because energy and politics are so closely intertwined.

“About 40 or so different large-scale solar proposals are going through different stages of development in Kentucky,” Boldman said. “Some of these will not go through, but some will make it all the way through.” 

Unexpected environmental issues, financing issues and other problems that come up on each individual project can pose barriers. 

Along with all of those expected issues, there’s also a federal backlog, causing delays in connection to transmission queues. Boldman says that in the last couple of years, federal efforts have “started to unjam that backlog.” She also notes that other states have gone through similar phases, and it typically takes about four or five years to get through the whole series of steps to break ground on solar developments.

Boldman describes the lack of available clean power as “a stumbling block, but not a killer.” The technology exists, the interest is there, and it’s at least partly a matter of having the political will to get the projects underway. 

“Actually, the grant doesn’t say renewables,” Boldman points out. “It says carbon-free. So it could include other sources, like hydrogen or nuclear energy.” 

She suggests that the project will likely require a mix of energy sources and expects that solar will be a big part of that mix. 

A Brighter Future

Transitions are not usually easy, and for the energy communities in Appalachia, moving from fossil fuels to clean energy has been difficult, to put it mildly. Declining coal production, unemployment and economic loss combine and result in devastated communities. 
The grants for demonstration projects announced recently, along with other efforts by the Department of Energy and money from the federal infrastructure bill – the Infrastructure Investment and Jobs Act passed in 2021 – aim to intentionally ease the pain of the energy transition, especially in energy communities.

“A great deal of Kentucky qualifies as what are called energy communities,” Boldman said. “And I think what makes Kentucky so attractive for several of these projects is the fact that there’s a recognized need to provide jobs to these communities that have relied heavily on fossil fuels in the past.”