Aluminium Smelter Closing?

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MikeB4
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#2342910 24-Oct-2019 11:08

I just have to put this here. From my protesting youth that still remains, thank you John Hanlon

Leaf falls to kiss the image of a mountain
the early morning mist has ceased to play
Birds dancing lightly on the branches by a fountain
Of waterfall which dazzles with its spray
Tall and strong and aged, contented and serene
The Kauri tree surveys this grand domain
For miles and miles around him, a sea of rolling green
Tomorrow all this beauty won't remain

Damn the dam cried the fantail,
As he flew into as he flew into the sky,
To give power to the people
All this beauty has to die

Rain falls from above and splashes on the ground
Goes running down the mountain to the sea
And leaping over pebbles makes such a joyful sound
Such as Mother Nature's meant to be

I have grave reflection, reflection of a grave
Trees that once lived green now dead and brown
The homes of tiny animals and little birds as well
For the sake of man's progression have been drowned

Damn the dam cried the fantail,
As he flew into as he flew into the sky,
To give power to the people
All this beauty has to die

Damn the dam cried the fantail,
As he flew into as he flew into the sky,

Damn the dam cried the fantail,
As he flew into as he flew into the sky,
To give power to the people
All this beauty has to die...

Here is a crazy notion, lets give peace a chance.

Fred99

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#2342927 24-Oct-2019 11:12

afe66: Is nz made aluminium affected by trump aluminium tariffs ?

Yes.

It's also a good example of a Trump own-goal, as some very high purity NZAS aluminium grades that can't be supplied by US smelters are exported to the US.

But it's not a huge volume, google tells me about $25 million exports to the US per annum.

jfanning

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#2342933 24-Oct-2019 11:31

Geektastic:

Who else should pay?

Obviously it should be split fairly across to the end user, so users closer to the power station pay less than people situated at a distance.

Geektastic:

Obviously capital expenditure needs to be charged over a phased period rather than all at once. However, I do not mind paying for a service worth paying for. At the moment, I see more power cuts annually than I ever have in my life, so at the moment I am paying for service not worth paying for.

That is your argument with your transmission company, mine is what am I (and NZAS) making your poor supply cheaper than it should be?

wellygary

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#2342935 24-Oct-2019 11:35

JimmyH:

If Meridian and Rio Tinto, negotiating on a purely commercial basis without Ministerial interference, can agree a contract that suits them both and the Smelter stays open, then that's fine with me. If they can't and the Smelter closes, then that's also fine by me. The Smelter should live or die on it's economics. What it shouldn't do is live based on special pleading and taxpayer cash.

As has been mentioned is a bunch of other post, its not the Meridian deal that is the key issue in this

its the price Transpower ( a 100% owned government monopoly) charges, and the Grid charging mechanism regulated (under government rules) by the Electricity Authority (EA) and the Commerce Commission,

Tiwai is getting overcharged, but when the EA proposed a pricing model in 2016 that would saving them $20 million a year, ( and increase domestic prices from $50/100 a year,) all hell broke loose

https://www.interest.co.nz/news/81632/electricity-authority-proposal-new-transmission-pricing-system-would-raise-power-bills

its new proposal that they are currently consulting on is a ~11 million saving from 2024, and Tiwai have said ( IMHO rightfully) that doesn't cut it..

BlinkyBill

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#2342945 24-Oct-2019 11:58

The plant will close some day. The implications of the closure will hit, some day. It’s “do I take my medicine today, or tomorrow?”.

I would make Rio Tinto work it until they no longer want to, but without subsidy, and when they give the 12 months notice, act. It might be good to do the grid update anyway - that 600MW will become available some day.

afe66

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#2343003 24-Oct-2019 13:23

This issue was one of reasons I didnt buy meridian shares

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Geektastic

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#2343034 24-Oct-2019 14:21

jfanning:
Geektastic:

Who else should pay?

Obviously it should be split fairly across to the end user, so users closer to the power station pay less than people situated at a distance.

Geektastic:

Obviously capital expenditure needs to be charged over a phased period rather than all at once. However, I do not mind paying for a service worth paying for. At the moment, I see more power cuts annually than I ever have in my life, so at the moment I am paying for service not worth paying for.

That is your argument with your transmission company, mine is what am I (and NZAS) making your poor supply cheaper than it should be?

As I said, I don't mind paying for a quality service. Our bill is probably $3000 a year or so as it is.

If paying more guaranteed service, then within reason no complaints from me.

wellygary

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#2343044 24-Oct-2019 14:40

Geektastic:
As I said, I don't mind paying for a quality service. Our bill is probably $3000 a year or so as it is.

If paying more guaranteed service, then within reason no complaints from me.

Most of the faults you are experiencing are local network outages,

This is not what is being talked about.....

if you whole town looses power, that's likely a Transpower grid issue. and where the increased charges come from.

Auckland has had a number of grid faults over the last 10-15 years (they tend to make the news) and T/power has spent some significant $$$ upgrading equipment and lines to make sure it doesn't happen again....

duckDecoy

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#2343047 24-Oct-2019 14:48

wellygary:

As has been mentioned is a bunch of other post, its not the Meridian deal that is the key issue in this

its the price Transpower ( a 100% owned government monopoly) charges, and the Grid charging mechanism regulated (under government rules) by the Electricity Authority (EA) and the Commerce Commission,

Tiwai is getting overcharged, but when the EA proposed a pricing model in 2016 that would saving them $20 million a year, ( and increase domestic prices from $50/100 a year,) all hell broke loose

https://www.interest.co.nz/news/81632/electricity-authority-proposal-new-transmission-pricing-system-would-raise-power-bills

its new proposal that they are currently consulting on is a ~11 million saving from 2024, and Tiwai have said ( IMHO rightfully) that doesn't cut it..

The old method allocated transmission costs based on the amount of power used.

The new proposal works (in simple terms) by spreading the investment costs of the network (e.g. HVDC upgrades) across the parties who benefit. So if a party gets 10% of the benefit from the HVDC upgrades, they pay 10% of the HVDC investment cost. If a party doesn't benefit from an upgrade they don't pay, for example Tiwai gets very little benefit from the North Island Grid Upgrade projects and as such doesn't pay much.

So I'm not sure Tiwai have a strong case around the 11 million saving not being good enough, they are paying their share of the projects that they benefit from.

duckDecoy

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#2343051 24-Oct-2019 14:53

tehgerbil:

Honestly Tiwai point is a disgusting blight on our energy industry. The sweetheart arrangement is appalling and the only winners are the shareholders for Tiwai and Meridian.

Not true. Tiwai is hugely beneficial to the NZ electrical system as a whole because it effectively offers demand response. When the power system gets in trouble Tiwai will pause some lines, effectively dumping demand out of the system and letting the system get back on track. This is a massive upside.

Beccara

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#2343066 24-Oct-2019 15:26

Tiwai to the best of my understanding is not connected to the grid, it's connected directly and is the sole consumer of a power station

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tdgeek

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#2343068 24-Oct-2019 15:32

Beccara:

Tiwai to the best of my understanding is not connected to the grid, it's connected directly and is the sole consumer of a power station

Thats what Handle said, and costly to connect to the grid also. IIRC it was going to be a private generator (Manapouri), but Govt built it instead for them, so the transmission fees they pay is in fact unfair as they are off grid, not part of NZ's power system. Interesting stuff

Jeeves

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#2343109 24-Oct-2019 15:51

Tiwai has what is effectively a private (albeit owned and operated by Transpower) connection to Matapouri. Matapouri is also connected to the general grid, therefore if the general grid needs more juice, Tiwai closes somes lines giving back capacity to Matapouri so it can in turn pump more into the general grid.

tripper1000

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#2343110 24-Oct-2019 15:52

That isn't entirely correct. There is a physical connection but it is constrained.

The Transpower maps are not working at the moment otherwise I would link them, but in a nut-shell the power-lines between Invercargill and the national grid are skinnier than the lines between Invercargill and Manapouri.

The gird is configured to supply only sufficient to meet Invercargills peak demand, and is not able to carry the full output of Manapouri north. When Manapouri is dumping excess capacity into the grid, it is running Invercargill and then the lines into invercargill are freed up to carry that much power again north. In greatly simplified terms Manapouri can only export 2x Invercargills peak requirements to the gird. This still doesn't equate to the full output of Manapouri.

Edit: This map is back up: https://www.transpower.co.nz/sites/default/files/plain-page/attachments/Transmission-map-south-island0718.pdf

found on this page: https://www.transpower.co.nz/keeping-you-connected/maps-and-gis-data-0

Jeeves

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#2343112 24-Oct-2019 15:58

Nothing I said was incorrect. Just very simplified :)

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