Power shares

[macduffy]

Having read Rod Oram's article, horus 1's endorsement and a former executive's views I've come to the conclusion that exiting from the smelter contract at the least possible cost would be in NZ's best interests.

[Panda-NZ-]

good article , shame the nz govt wasted 8 years of doing nothing for this day

Better to do it during better economic conditions but at least it winds down slowly into late next year.

[Jaa]

I have no idea why Brian Leyland gets so much publicity. He is a climate denier with views stuck in the 70s. My father knew him well and I have been nothing but disappointed by his public opinions over the last decade or two.

There are so many inaccuracies in his opinion piece. The idea you can just add up any costs you can think of is ridiculous. Economics is not a zero sum game. All those resources (power, labour etc) will be put to other uses, some far more valuable than making Aluminium.

If Comalco wanted a lock on power prices then should have taken the risk to fund and build the power station. That's how capitalism works, to the risk taker goes the spoils. NZ has a robust, independent legal system, the contracts were fairly negotiated.

Besides Tiwai Point got a phenomenally profitable legacy power contract for the majority of its power needs (for 4 of the 5 pot lines). This 40yr contract expired in 2013 and they largely managed to roll it over to 2030 with a lot of pressure that ultimately saw John Key buckling by going over the heads of the negotiators. Meridian et el had to make do with a few small wins, extending the termination notice from 12 to 15 months etc.

I trust Meridian and the other generators to negotiate with Rio Tinto. They understand the electricity market better than anyone else, understand the trade offs and should be left to do it. This roughly been Labour's approach, it wasn't however National's policy, the supposed "free market" party.

[Jaa]

https://www.reuters.com/article/us-r...82Q0EA20120327

I recall RT using the possibility of Malaysia as a negotiating tactic in its negotiations with Meridian and NZ government way back in the late 2000's.

We laugh at third world or developing nations at how eager they are to secure industries and jobs but in this case, the Malays told RT that they would not do the deal and secure a US$2 billion smelter investment as the power price RT wanted was plain ridiculous.

Time for NZ to wake up and move on with better use of the clean, green and renewable energy from Manapouri.

I remember this as well Balance and you are spot on, it was a lucky escape by Malaysia. RT plays the same games with Iceland too. It is their standard operating procedure.

Winston Peters idea is ridiculous nonsense which would leave NZ with operating losses and the huge cost of cleaning up the smelter's mess.

[fish]

I have no idea why Brian Leyland gets so much publicity. He is a climate denier with views stuck in the 70s. My father knew him well and I have been nothing but disappointed by his public opinions over the last decade or two.

There are so many inaccuracies in his opinion piece. The idea you can just add up any costs you can think of is ridiculous. Economics is not a zero sum game. All those resources (power, labour etc) will be put to other uses, some far more valuable than making Aluminium.

If Comalco wanted a lock on power prices then should have taken the risk to fund and build the power station. That's how capitalism works, to the risk taker goes the spoils. NZ has a robust, independent legal system, the contracts were fairly negotiated.

Besides Tiwai Point got a phenomenally profitable legacy power contract for the majority of its power needs (for 4 of the 5 pot lines). This 40yr contract expired in 2013 and they largely managed to roll it over to 2030 with a lot of pressure that ultimately saw John Key buckling by going over the heads of the negotiators. Meridian et el had to make do with a few small wins, extending the termination notice from 12 to 15 months etc.

I trust Meridian and the other generators to negotiate with Rio Tinto. They understand the electricity market better than anyone else, understand the trade offs and should be left to do it. This roughly been Labour's approach, it wasn't however National's policy, the supposed "free market" party.

I am not sure if it is just the generators role to negotiate further with Rio.
The contentious point that I hear coming from Rio Tinto is the $64 million transmission costs they pay-which they say is many times the real cost .
I fail to understand how the loss of this revenue for transpower will not increase costs for consumers.

[Beagle]

I am not sure if it is just the generators role to negotiate further with Rio.
The contentious point that I hear coming from Rio Tinto is the $64 million transmission costs they pay-which they say is many times the real cost .
I fail to understand how the loss of this revenue for transpower will not increase costs for consumers.

Not far at all as the crow flies for those power lines from Manopouri to Bluff. 113 km's from vague memory ?
$64m per annum seems grossly excessive and I think you have hit the nail on the head and consumers expecting cheaper prices are going to be very disappointed in more ways than one, they're not going to go down, more likely to go up !

[Jaa]

I am not sure if it is just the generators role to negotiate further with Rio.
The contentious point that I hear coming from Rio Tinto is the $64 million transmission costs they pay-which they say is many times the real cost .
I fail to understand how the loss of this revenue for transpower will not increase costs for consumers.

The smelter benefits from the security of supply the national grid provides and should pay for it.

For consumers, the increased transmission cost will be more than offset by cheaper power.

[Beagle]

The smelter benefits from the security of supply the national grid provides and should pay for it.

For consumers, the increased transmission cost will be more than offset by cheaper power.

Reported in the NBR last week Transpower are looking at having to invest ~ $700m in new infrastructure to send that power north. They will want a return on that investment and there are limits to how much power that can be sent across the Cook Straight and a lot of transmission losses between Manopouri and Auckland and last but not least there's about 2-3 years before than infrastructure can be built.

[Jantar]

I have no idea why Brian Leyland gets so much publicity. He is a climate denier with views stuck in the 70s. My father knew him well and I have been nothing but disappointed by his public opinions over the last decade or two.

There are so many inaccuracies in his opinion piece. The idea you can just add up any costs you can think of is ridiculous. Economics is not a zero sum game. All those resources (power, labour etc) will be put to other uses, some far more valuable than making Aluminium.

If Comalco wanted a lock on power prices then should have taken the risk to fund and build the power station. That's how capitalism works, to the risk taker goes the spoils. NZ has a robust, independent legal system, the contracts were fairly negotiated.

Besides Tiwai Point got a phenomenally profitable legacy power contract for the majority of its power needs (for 4 of the 5 pot lines). This 40yr contract expired in 2013 and they largely managed to roll it over to 2030 with a lot of pressure that ultimately saw John Key buckling by going over the heads of the negotiators. Meridian et el had to make do with a few small wins, extending the termination notice from 12 to 15 months etc.

I trust Meridian and the other generators to negotiate with Rio Tinto. They understand the electricity market better than anyone else, understand the trade offs and should be left to do it. This roughly been Labour's approach, it wasn't however National's policy, the supposed "free market" party.

There are so many inaccuracies in your opinion piece. To start with Brian Leyland is not a climate denier. He has never denied that climate changes. But his views on climate are completely irrelevant when it come to the power industry. He is a respected electrical engineer and is a participant in the market. He is also correct in his estimate of the value of water that will be spilled. There is no way for that additional energy now available from Manapouri to be transmitted north from Roxburgh. The lines upgrade currently under way only alleviates the present constraint, but does not provide for an additional 600 MW of transmission.

Camalco wanted to fund and build the Manapouri power station, but the law of the day didn't allow anyone to build new large power stations other than the government. They got around that by the NZED building and operating the station and selling the energy to Tiwai at a price that was close to cost. There was a further benefit to Camalco in that by having the NZED do it then Tiwai was connected to and supported by the grid.

[Panda-NZ-]

It's only one man's opinion and there are others who may have a different outlook in the end.

There is some opprtunities for electric vehicles infrastructure, dairy factory changes and maybe even data centers in the south island or whatever else our govt can attract here using our covid free and clean energy status.