Creating a renewable energy hub based around Portland could be the key to keeping the town and major industry viable according to Western Victoria MP James Purcell.
Major employer Alcoa announced last week the pot line destroyed during power cuts in November 2016 has been restored and will return to production soon.
Mr Purcell said it was vital Alcoa was supported to continue operating long into the future - and a renewable energy hub may be the best way to do this.
"The last nine months have been a nervous time for residents of Portland," Mr Purcell said.
"Having the Alcoa teams back to work at full capacity will give the whole community confidence in the future of the smelter and the town."
Mr Purcell says the $500,000 allocation in the May 2017 budget is part of a solution to see the smelter continue beyond this.
"This funding will be used to investigate options for the future of the town of Portland, whether this is in the form of new energy projects or developing a renewable energy hub based around existing industry, such as Keppel Prince, local renewable energy projects and the Port.
"Our committee has a meeting this Thursday and we will be exploring options to keep Portland powering along."
Mr Purcell said there was growing potential for renewable energy in western Victoria.
"This is being led by the wind industry, which has put in a number of planning applications and will hopefully have some extra wind turbines on the ground in the new year.
"We are working closely with Government and Alcoa to establish energy and industry needs in the coming years and once these requirements are in place we'll work to create an environment that supports ongoing growth for the area."