Aluminium Smelter Closing?

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#2342811 24-Oct-2019 09:12

jfanning:

So based on the comments that people would be happy for Tiwai to close, I assume you are also happy for the proposal of true transmission costs being passed on to the consumer?

The 13% they use wont need to be generated, so its likely that using FF to top up what we need from time to time would reduce. Are you referring to the fact that transmission costs would be shared by 13% less kW?

Beccara

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#2342814 24-Oct-2019 09:16

I think he's pointing to the new transmission rules the EA is looking to put in place, Basically distance from generation would mean more charges I.E Auckland & Northland are going to pay like $30/year more and southland/SI clients a little less

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wellygary

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#2342823 24-Oct-2019 09:41

peejayw: Close it down and use the cheap power to promote the uptake of EV's. We gain by having to import less oil and it's attendant pollution and also cease the production of 800,000 tonnes pa of CO2 that the smelter emits.

Producing the lowest carbon ultra high purity aluminium in the world is a good thing,..... and it should be where the world is heading.... but its not....

If Tiwai were to shut, we would be complicit in creating an addition 2-3 million tonnes of CO2 annually as the NZ Al production was replaced by coal powered smelters in China..

The high end stuff that comes out of Tiwai pretty much all goes to Japan and in a huge range of electronic components, from displays to HDD to smartphone components,

To simply say, oh well just use that to make power for our EVs cheaper fails to comprehend the global nature of trade and emissions.

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#2342827 24-Oct-2019 09:46

We're not the only ones producing it, If there is demand the other existing plants around the world and supply it. If Japan needs high end al it's not going to goto Chinese low grade just because Tiwai closes

tdgeek

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#2342829 24-Oct-2019 09:48

wellygary:

peejayw: Close it down and use the cheap power to promote the uptake of EV's. We gain by having to import less oil and it's attendant pollution and also cease the production of 800,000 tonnes pa of CO2 that the smelter emits.

Producing the lowest carbon ultra high purity aluminium in the world is a good thing,..... and it should be where the world is heading.... but its not....

If Tiwai were to shut, we would be complicit in creating an addition 2-3 million tonnes of CO2 annually as the NZ Al production was replaced by coal powered smelters in China..

The high end stuff that comes out of Tiwai pretty much all goes to Japan and in a huge range of electronic components, from displays to HDD to smartphone components,

To simply say, oh well just use that to make power for our EVs cheaper fails to comprehend the global nature of trade and emissions.

Yes, but do we need to give them artificially low prices? It seems to be well past volume pricing

jfanning

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#2342832 24-Oct-2019 10:02

peejayw: Close it down and use the cheap power to promote the uptake of EV's. We gain by having to import less oil and it's attendant pollution and also cease the production of 800,000 tonnes pa of CO2 that the smelter emits.

Except the vehicles are too expensive, there aren't enough options, there is no guarantee that electricity prices will fall if Tiwai closed.

jfanning

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#2342835 24-Oct-2019 10:05

tdgeek:

The 13% they use wont need to be generated, so its likely that using FF to top up what we need from time to time would reduce. Are you referring to the fact that transmission costs would be shared by 13% less kW?

The fact that there is a unfair transmission cost structure in place now, if the EA reforms go through, Southlanders will be paying less for transmission costs, and Auckland businesses will be paying more.

It is estimated that NZAS paid $200 million more in transmission costs over the last 10 years than they should have due to the unfair model in place now.

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tdgeek

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#2342836 24-Oct-2019 10:08

An option is if it closes is to offer Southland the same cheap prices to help them rebuild a new means of employment. Tell RT that nothing changes, which is what National have done and Coalition supports as well. Id support some help for Southland to create a new industry, as a backup if and when RT exits. Its fine if RT stays and its fine if they go.

wellygary

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#2342863 24-Oct-2019 10:26

tdgeek:

wellygary:

peejayw: Close it down and use the cheap power to promote the uptake of EV's. We gain by having to import less oil and it's attendant pollution and also cease the production of 800,000 tonnes pa of CO2 that the smelter emits.

Producing the lowest carbon ultra high purity aluminium in the world is a good thing,..... and it should be where the world is heading.... but its not....

If Tiwai were to shut, we would be complicit in creating an addition 2-3 million tonnes of CO2 annually as the NZ Al production was replaced by coal powered smelters in China..

The high end stuff that comes out of Tiwai pretty much all goes to Japan and in a huge range of electronic components, from displays to HDD to smartphone components,

To simply say, oh well just use that to make power for our EVs cheaper fails to comprehend the global nature of trade and emissions.

Yes, but do we need to give them artificially low prices? It seems to be well past volume pricing

NZAS's big beef is transmission charges and how the cost of the total grid gets allocated, - The contract with Meridian is not their main concern...

IMHO they get a raw deal on transmission charging,

EA have been trying to sort something out, but its taken over 10 years, and politicians keep getting involved, as it will mean regular north island consumers (particularly Auckland, will pay more in transmission)

JimmyH

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#2342866 24-Oct-2019 10:29

Geektastic: Business is business.

As long as it remains economic it will continue. As soon as it isn't, it won't.

Electricity pricing isn't a subsidy by the rest of us for employment elsewhere. Or at least, it ought not to be.

This! It's purely a matter for Rio Tinto and electricity suppliers. The Government should stay out of it, and there certainly shouldn't be any taxpayer subsidies.

I would expect that Rio Tinto would be able to negotiate what would look lie a pretty cheap price as (from memory) it's a take or pay contract so they have to pay for the power even if they don't use it, and there aren't the transmission losses/costs associated with moving the power further away from Manapouri.

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.

Other regions have seen major employers (car assembly, freezing works, garment makers, TV assembly) close because they weren't economic. This isn't the Soviet Union and Government didn't, and shouldn't, come in over the top to try and plan their economies for them. Neither should it for Southland.

tdgeek

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#2342867 24-Oct-2019 10:31

wellygary:

NZAS's big beef is transmission charges and how the cost of the total grid gets allocated, - The contract with Meridian is not their main concern...

IMHO they get a raw deal on transmission charging,

EA have been trying to sort something out, but its taken over 10 years, but politicians keep getting involved, as it will mean regular north island consumers (particularly Auckland, will pay more in transmission)

Ok I follow that now, thanks. What is a fair change will be seen as bad for businesses so Nats wont do it, and if Labour did it they are being bad for businesses again.

Is this in that recent review?

tripper1000

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#2342870 24-Oct-2019 10:36

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.

Seriously - they're wanting taxpayer support for 1000 jobs, when they're also pillaging the publics pocket in terms of energy prices!? It's double dipping and practically corporate welfare.

We've already given then $30 million dollars 6 years ago, and they were told to piss off asking for any more. But sure enough, they've come back cap in hand asking for more taxpayer cash.

And all of this less than 1 year after an massive upgrade in production??

Something is not right here.

Further digging revealed the sweetheart deal on carbon credits.

An interesting article from 10 years ago about the climate subsides it's getting. allegedly equating for $225k per worker.

Whoa, hold your horses there.

Manapouri and Tiwai were designed together for each other. The location of the smelter was chosen because it was near an abundant water energy source. Manapouri owes it's existence to the smelter. Supplying the national grid was never a part of the plan hence serious Transpower upgrades are necessary for Manapouri to do this. The original architects of Tiwai smelter were also going to build Manapouri and it was going to be a private power plant. The Government of the day offered to build Manapouri and run it for the smelter. The benefit for the nation was surplus power could be spilt into the nation grid advantaging consumers and it provided employment for Southland, back in a day when governments were expected to take a leading hand in developing the country.

There are no sweetheart deals going on here. Other power users are not subsidising the smelter. This is creative/ignorant media reinterpretation of history. The smelter is being disadvantaged by forgetful and changing government policy.

Geektastic

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#2342882 24-Oct-2019 10:49

jfanning:

So based on the comments that people would be happy for Tiwai to close, I assume you are also happy for the proposal of true transmission costs being passed on to the consumer?

Who else should pay?

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.