Tiwai Point is Closing

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#2520750 10-Jul-2020 13:34

Mahon:

Not disagreeing with you...but they are all 5 year projects. I think to keep smelting in the mean time is best for NZ and the people in the South especially with a recession looming.

That's where the government starts to become vulnerable...

its running round the country throwing money at pretty much anything that will provide jobs, Cultural Centres, rugby clubrooms , bike parks , indoor courts, etc https://www.ft.com/content/cdcd8a02-81b5-48f1-a4a5-60a93a6ffa1e

But then I guess Southland isn't somewhere NZ First are trying to get elected,

PolicyGuy

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#2520781 10-Jul-2020 14:00

ezbee:
Probably time to reconsider economics of Railways buying Diesel engines and having electric network mothballed.

The Labour government already stopped that madness in October 2018:
“Once the Prime Minister got involved, things started to move more quickly and the announcement was made in October 2018 that the 15 electric locomotives would be retained and refurbished in KiwiRail’s workshops."
(see https://www.engineeringnz.org/news-insights/green-light-rail-engineers-tale/)

ezbee:
Full electrification of rail may be a good partial use of some of the energy.

There is already a plan to fully electrify the North Island Main Trunk Line (see above quoted article).
Firstly this involves closing the gap between the southern end of the Auckland suburban commuter rail network (Papakura or Pukekohe) and Hamilton. This is relatively easy because they used exactly the same electrification for Auckland as was used on the NIMT (25kV AC).
Secondly, you have to close the gap between Palmerston North and Waikanae. This is a little more complicated because the Wellington suburban network uses different and incompatible electrification (IIRC ~1500V DC in Wellington, 25000V AC elsewhere).

The capital costs of electrification are enormous, and maintenance costs in a 'seismically active' place like NZ can also be huge.
I think we would be better off moving to a hydrogen-based transport economy. Hydrogen fuel cell trains are already under development in Europe, they are not a far-future development. (see https://www.alstom.com/press-releases-news/2020/3/alstoms-hydrogen-train-coradia-ilint-completes-successful-tests)

One of the ways to use up 'spare' zero-carbon electricity might be to set up a large-scale hydrogen electrolysis plan at Tiwai Point

wellygary

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#2520794 10-Jul-2020 14:29

PolicyGuy:

One of the ways to use up 'spare' zero-carbon electricity might be to set up a large-scale hydrogen electrolysis plan at Tiwai Point

If you think the logistics of upgrading the grid to move electricity is expensive and tricky, just wait until you try large scale hydrogen production and transportation......

Its much easier to move the electrons to where you want them and then make your H2, rather than move H2,

And there is no feasible way to move anywhere near Manipouri's production as H2,

The world's first and only H2 shipping tanker can take 1 million CuM H2, ( compressed as 1,250 cubic meters liquid H2)

https://newatlas.com/marine/kawasaki-worlds-first-liquid-hydrogen-transport-ship/

The current commercial electrolysis rate is 4Kwh per 1 CuM H2 (Gas) that's 4Gwh per vessel,

Manapouri produces ( back of the envelope) 5000Gwh per year, that's ~3 of those tankers every day

There is a reason they are dabbling with H2 in Tarankai, there are lots of large Natural gas users there and many extract H2 from NG for their industrial processes, so its an easy substitute.... the only downside is there is little renewable generation in Taranaki - Hence a big chunk of the Hiringa Funding going into 4 Vestas 4MW wind turbines

Mahon

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#2520812 10-Jul-2020 15:10

wellygary:

Mahon:

Not disagreeing with you...but they are all 5 year projects. I think to keep smelting in the mean time is best for NZ and the people in the South especially with a recession looming.

That's where the government starts to become vulnerable...

its running round the country throwing money at pretty much anything that will provide jobs, Cultural Centres, rugby clubrooms , bike parks , indoor courts, etc https://www.ft.com/content/cdcd8a02-81b5-48f1-a4a5-60a93a6ffa1e

But then I guess Southland isn't somewhere NZ First are trying to get elected,

It could well mean that they need to mothball Manapouri Station if its going to take years to build infrastructure to get the power north. Seems it should have been happening now as Rio Tinto has given them years of notice.

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#2520814 10-Jul-2020 15:14

https://www.facebook.com/permalink.php?story_fbid=323457839042323&id=109834940404615

This is a great article about Tiwai point and the potential for the electricity, by Peter Fraser. Basically, Tiwai Point is in the business of exporting electricity in the form of Aluminium:

Seems like that phone call to Tiwai Point I was talking about last month wasn't needed after all; as Comalco are literally 'pulling the plug' themselves. The reason is simple: the plant isn't viable. Like the Australian car industry, it shows what happens when millions of dollars worth of taxpayers' subsidies aren't available.

As previously mentioned, this will have a huge - and negative - regional impact but a huge - and positive - national impact. Here's a summary of the national impact:

1. From an ''NZ Inc perspective Tiwai is basically a story about exporting electricity - albeit in a solid form called aluminium ingots. We don't get the money for the aluminium - Comalco does.

2. Tiwai uses between 12-15% of NZ's total power generation capacity from a dedicated supply at Manapouri. And that capacity is highly strategic - as it is baseload and it is cheap.

3. Manapouri was basically a stranded asset - the power went straight to Bluff. This meant that in the absence of the smelter the power had a zero opportunity cost as it couldn't be used elsewhere. However, Transpower is in the middle of a grid upgrade and long story short, that power can now be shifted - so that opportunity cost issue really matters.

4. Manapouri generation is critical in terms of two conversations: firstly, how to largely decarbonise electricity generation (so let's stop whining for at least 3 minutes about offshore oil and gas exploration); and secondly, how electricity can assist with the decarbonisation of other sectors: notably transport and stationary energy. All other things being equal, closing Tiwai point means phasing out the North Island thermals: and mothballing Huntly. Now 100% renewable is hard: but we can get close - and getting rid of Tiwai is how we do it.

5. Finally, there is the impact on electricity prices. Cutting to the chase, electricity prices are set on the basis of the marginal - or least efficient - plant that is required to satisfy demand. This means it is high cost generators like Huntly that set the electricity price, not low cost generation like Manapouri.

Now the reason power prices stay high is a huge chunk of low cost electricity is kept off the market, which is forced, as a consequence, to buy expensive power. So all other industrial and domestic power users are, in essence subsidising Tiwai Point jobs through paying too much for power. Indeed, my expectation is the value of the gentailers will fall as the ability to extract rents is reduced.

wellygary

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#2520815 10-Jul-2020 15:17

Mahon:

Seems it should have been happening now as Rio Tinto has given them years of notice.

Transpower is a regulated Monopoly.

Trying to get a business case past the regulator to spend $100s of Million ( which ends up on all customers ex the smelter) on something that "might" happen tomorrow, or not for 10 years is really tough....

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#2520817 10-Jul-2020 15:21

Mahon:

tdgeek:

I reckon now is the time to reconstruct that energy source for NZ and specifically the lower provinces and Westland. Its time to rebuild that economy, there has been plenty of off the cuff suggestions here, and any development can certainly help to hoover up some employment.

Not disagreeing with you...but they are all 5 year projects. I think to keep smelting in the mean time is best for NZ and the people in the South especially with a recession looming.

Yeah... it's a pity that 5 or even 10 years ago they didn't start the "Connect Manapouri to the South Island Grid" or the "Connect Manapouri to the HVDC link" projects. A definite lack of foresight there.

frankv

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#2520820 10-Jul-2020 15:27

wellygary:

But then I guess Southland isn't somewhere NZ First are trying to get elected,

It's not somewhere anyone is trying to get elected. Extremely safe for National, so not much National effort needed to retain it, and not worth Labour (or anyone else) expending much effort to try to win it.

You have to wonder about the National selection process down there though... you'd think there would be a queue of people wanting to be the guaranteed MP, yet they keep picking such clots.

tdgeek

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#2520824 10-Jul-2020 15:32

frankv:

Yeah... it's a pity that 5 or even 10 years ago they didn't start the "Connect Manapouri to the South Island Grid" or the "Connect Manapouri to the HVDC link" projects. A definite lack of foresight there.

Hmm, dunno, maybe. Manapouri was going to be built and owned by Rio Tinto, or Camalco, whoever it was, but the Govt said we will build it and you can use it. Rio Tinto would not want anything to happen that could reduce the stability of this one asset by way of technical complications if its not doe the sole use

Handle9

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#2520828 10-Jul-2020 15:49

frankv:
Yeah... it's a pity that 5 or even 10 years ago they didn't start the "Connect Manapouri to the South Island Grid" or the "Connect Manapouri to the HVDC link" projects. A definite lack of foresight there.

I guess you would have been happy to pay an extra 2c per kWh "just in case"?

This is a massive project and not something you build unless you actually need it.

wellygary

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#2520839 10-Jul-2020 15:58

tdgeek:

Hmm, dunno, maybe. Manapouri was going to be built and owned by Rio Tinto, or Camalco, whoever it was, but the Govt said we will build it and you can use it. Rio Tinto would not want anything to happen that could reduce the stability of this one asset by way of technical complications if its not doe the sole use

In the early 60s Consolidated Zinc walked back on the original agrement to build both, the Government stepped in to stop the smelter plans falling over,

(apparently the original budget didn't anticipate how much it would cost to build an underground power station in solid rock near one of the more seismically active areas of NZ- go figure) - the smelter got a fixed price inflation proof long term power contract,

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#2520846 10-Jul-2020 16:17

frankv:

a pity that 5 or even 10 years ago they didn't start the "Connect Manapouri to the South Island Grid" or the "Connect Manapouri to the HVDC link" projects. A definite lack of foresight there.

Output from Manapouri is connected to the grid. The thing is that the bulk of its output was always intended to go to Tiwai Point, which it has for all these decades, and the electricity grid in that location was designed and built with that in mind. Very capable between Manapouri and Tiwai Point and then less so from that area heading back north.

Over designing an Electricity grid is a rather large waste of money which needs to be passed on to the end user (your power bill) so is not done until there is a compelling reason.

Tiwai Point closing has absolutely been anticipated (lots of design work and studies been done in the background in recent times) which is all very boring and not newsworthy particularly to the people of Invercargill. Snap decisions by Rio Tinto are harder to predict.

tdgeek

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#2520893 10-Jul-2020 18:21

Buster:

Over designing an Electricity grid is a rather large waste of money which needs to be passed on to the end user (your power bill) so is not done until there is a compelling reason.

Agree. BUT, with the need to drop coal and gas, and one day...EV's dominating, now is the time

Buster

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#2520900 10-Jul-2020 18:37

tdgeek:

Agree. BUT, with the need to drop coal and gas, and one day...EV's dominating, now is the time

Bits and pieces have already been done I think but there is $600M investment required which will now be fast tracked I imagine. We'll see what they can reduce three years work down to.

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#2520915 10-Jul-2020 19:14

Buster:
tdgeek:

Agree. BUT, with the need to drop coal and gas, and one day...EV's dominating, now is the time

Bits and pieces have already been done I think but there is $600M investment required which will now be fast tracked I imagine. We'll see what they can reduce three years work down to.

There's no real rush to build a new pole on HVDC or upgrade the transmission lines. It's not like there are rolling blackouts or lack of supply. Three years is pretty reasonable, especially given the problems that occurred on Pole 3.

Meridian loses a bit of money and has to spill some water. Big deal, it'll help them to understand why they should spill water rather than manipulate power prices.

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