Member log in

If Tiwai Point smelter shuts, no problem getting power to Auckland

Transpower says it can easily get Manapouri power to Auckland if the Tiwai Point smelter had to close.

Speaking today on TV3’s “The Nation”, Transpower CEO Patrick Strange said it was to possible to get “anything we like out of the South Island.“

“The only small constraint is between the Waitaki Valley and what we call the lower South Island which is Roxburgh and South, so we've got the Clutha, Manapouri etc,” he said.

“We can push about 600 megawatts south or north on that now."

Mr Strange said wholesale power prices would lwer if the smelter closed, but said the dip would be temporary.

“If something happened at Tiwai and it disappeared tomorrow, we had a huge fire, we'd spill a little bit of water for a couple of years but in reality it's not going to shut quickly," the Transpower CEO said.

“We've got a project approved on the books which will enhance that link in the lower South Island, which will mean Manapouri's just part of the national grid.

“So we don’t see any issues with Tiwai closing.”

And Mr Strange said Transpower didn’t see any issues over the Cook Strait cables if the smelter closed.

“After we've completed the work this year will be capable of 1200 megawatts north and south, and part of the reason that the enhancement occurred was because we all know Tiwai will go some day, and we're quite public about that. One of the scenarios was Tiwai would leave in 2022.” 

Comments and questions
12

It's good to hear some positivity on the issue. Also, with the excess power plus the water., this plant would make a great REES processing facility,

If the smelter business was a good one then the current owners would keep it or someone would be keen to buy it, surely?

Surprised it has taken this long for any media outlook to speak to someone who knows what is going on. Sure, some jobs would be lost, but they were never jobs forever. If the media just quotes Labour & Green MPs who have almost nil business or industry experience in anything, They are only last century's ideas, and in the case of the Greens the 16th century.

Same guy who was in charge of the Auckland CBD power screwup 20 years ago. The line losses would be incredible over that sort of distance, let alone compromising peak power requirements by using the cable capacity as a bulk movement device. If you think answers in the electricity industry are that simple then please explain to me why we pay 22-25c/kWh for power that costs less than 8c/kWh to generate in a supposedly competitive market.

He wasn't. He came in after the then CEO died of a heart attack.

He was an excellent CEO until Stiassney found someone else, who turned out to be not as good.

High prices are because preserving the illusion that we have a competitive "market" is believed to be more important than giving the consumer a fair go.

I agree that transmission line losses would be severe shifting power designatied for the smelter to say Auckland.

Who are they trying to Kidd ?

Is this some sort of subliminal marketing campaign to try and paint a picture that minimises the risks and tries to validate the extremly high Price Earnings Ratio the Government is trying to claim is fair for the sale of not so Mighty River power ?

So they would rather spill water than let NZers have it cheap. Do we ever need a cleanout in Government and CEOs...

So the country will lose one billion dollars of offshore revenue per annum and the taxpayer will have to cough up one hundred million to pay for the interconnect for Manapouri to the grid. And how much cheaper is power going to be?

We already have enough power in Auckland. We don't have another billion dollar business waiting to take over from Tiwai. Meridian should be bending over backwards to support their "partner" Pacific Aluminium in collectively addressing the bearish business environment they are working in.

its not the volume of revenue that is important here as organic economic growth will eventually replace the loss of Tiwai as a customer, what is important is the price Tiwai was paying and therefore the net impact. The volume price mix is what we should be considering here, and until we know the price Tiwai is paying we can not do this analysis.

Actually, there is a problem. Transmission yield loss causes increasingly significant loss of electricity the further it is transmitted - so power transmitted from Manapouri effectively used in Auckland is worth much less than that used at Tiwai. The central and southern south island (being close to major sources of generation) therefore has a comparative advantage on the delivered cost of electricity.

All NZers should be entitled to cheaper power ... especially surviving the cold winter, and definitely not subsidising the inefficient Tiwai smelter.

Cutesy
I agree this is what Max Bradford and the power reforms have brought us in NZ. We have no control over power prices and water can be wasted to keep the prices.
Give more control away - buy shares in Mighty River.