MEL - Meridian Energy

[xafalcon]

aluminium hit new low 1661 looks like headed lower.

wonder how much this affects rio decision? of course if they close good for meridian not good for others

By my calculator 1661 / 2.205 = $753.29/lb which is slightly higher than above charts??

But NZD depreciation also helping since most of aluminium cost is the electricity

[Daytr]

How did you not see the "a bit like"
I didn't realize power companies didn't retail aluminium. There you go. ;-)
Anyway, what you are suggesting was similar to what I was getting at.
I don't necessarily think its a good thing, especially if the end result was NZ citizens subsidizing aluminium production, but its a thought.

D-day #2 approaching...

Comcom would not allow this, because the politicians would wear the combined fury of the domestic and business consumers.

Just imagine if the power companies (and maybe transpower) all got together (formally or informally) and took ownership. Then they decided that to make some money from aluminium they had sell power to Tiwai at 1 cent per unit. What would that do to other commercial and domestic unit prices? This would make the smelter very cost competitive, so more pot lines may be added. Prices for other users then go even higher.....

The comparison with Marsden Pt is flawed.

Marsden refines product for it's owners to sell, and if Marsden Pt isn't competitive then more refined fuel is imported.

Tiwai Pt owned by power companies would be incentivised to reduce power cost to the smelter and crank up the cost for other users

[Crackity]

From NBR online y'day....highlighted the important bit in the middle...

1.

No more govt sweeteners to keep Tiwai Point open, Key says



2

if Meridian is to supply it, will be more expensive than the deal struck two years ago.



.

I have parsed slightly and highlighted what I feel are the important bits......

800 jobs potentially in Southland affected if Tiwai closes and a National seat....I'm still picking Tiwai ain't closing anytime soon.

[Baa_Baa]

SP is saying no worries mate. Believe the market.

[Daytr]

The several hundred million dollars of environmental liability will probably be the swing factor in the smelter staying open.

[Crackity]

The several hundred million dollars of environmental liability will probably be the swing factor in the smelter staying open.

Several hundred million would pretty much buy you Invercargill. With Nightcaps thrown in for nothing....

[bull....]

SP is saying no worries mate. Believe the market.

share price going up could mean 172mw meridian will have to sell after nxt mth will be at higher prices or if they close meridian will have the whole lot to sell at higher prices or if they stay open just more of the same until 2017?

[mouse]

share price going up could mean 172mw meridian will have to sell after nxt mth will be at higher prices or if they close meridian will have the whole lot to sell at higher prices or if they stay open just more of the same until 2017?

exactly. It sums up the sums pretty well. meridian will make money, whatever happens. but a few of the other generators could lose a bit.

[fish]

Not true. Because of line constraints that extra energy cannot be transferred out of the lower South Island. So the only stations affected will be Manapouri, Roxburgh and Waipori hydro (and Clyde to a lesser extent), and White and Mahinerangi wind farms. Contact owns the Clyde and Roxburgh stations, but also has significant geothermal and thermal plant in the North Island. So overall it would only be Meridian that would be adversely affected in the short term.

Once Transpower upgrade the circuits to all more of Manapouri's generation to flow north, then that would co-incide with the scheduled progressive shutdown of genesis's remaining Huntly coal fired units, the net gain to the nation in energy by adding Tiwai's demand and subtracting Huntly's generation is only 85 MW.

So will meridian really gain a lot if tiwai closes?

[Jantar]

So will meridian really gain a lot if tiwai closes?

Not in the short term. Maybe some gain after 5 or 6 years.