Power companies react to Tiwai closure announcement

Main Tiwai Point aluminium smelter power supplier Meridian Energy believes the closure of the Southland smelter in August next year provides an opportunity to accelerate decarbonisation and grow sectors such as transport.

“Through the electrification of our transport sector, New Zealand can help combat the impacts of climate change and reduce our reliance on fossil fuels,” it says.

Meridian Energy says an exit by the Tiwai Point aluminium smelter is disappointing for many and the news will be a huge blow to the smelter workforce and the Southland community.

“In the short term, there would be a surplus of electricity in Southland which would likely mean lower wholesale prices,” it adds.

“Over the next two to three years and beyond, the electricity market will adjust with transmission lines upgraded to transport the surplus electricity north, and older thermal run power stations most likely shut down.”

Mercury says it is relatively well placed to respond to the decision to close the smelter.

All of its renewable generation assets in the North Island are close to load centres and largely free of major transmission constraints as a consequence of reduced South Island electricity demand, it says.

“Mercury is confident that the sector will adapt to the closure of the smelter, invest in new transmission and develop new electricity demand to rebalance New Zealand’s electricity system.”