Wednesday, October 23, 2019



Close Tiwai Point

Tiwai Point's electricity contract is up for renewal. And as usual, they're sticking their hand out, demanding a government subsidy, and threatening to close if they don't get one:

The owners of the aluminium smelter said on Wednesday that there were seeking talks with the Government amid a strategic review which could see the operation closed.

Rio Tinto said it would "will conduct a strategic review of its interest in New Zealand's Aluminium Smelter [NZAS] at Tiwai Point, to determine the operation's ongoing viability and competitive position".

This would include talks with the Government and electricity suppliers.

Meridian Energy, which supplies electricity to the smelter, said the review options included closure.

But in a statement, a spokesman for Woods described the review as "a commercial process by a commercial operator" and signalled there should not be an expectation of a bail out.


Good. Because the best thing this polluter can do is close. That's not just because I don't think the government should subsidise unprofitable businesses (and Tiwai Point gets not just a direct financial subsidy courtesy of John Key, but also a ~$70 million a year carbon subsidy, for about five times its actual emissions) - but also because Tiwai Point uses 13% of the country's entire electricity supply (for which it pays a sweetheart rate, effectively being subsidised by all of Meridian's other customers). The primary consequence of that heavy baseload use is to force the use of dirty thermal generation at peak times, causing over 2 million tons a year of avoidable carbon dioxide emissions - 5% of the country's total. And because electricity prices are set by the marginal generator, this drives up prices for everyone. If Tiwai Point shuts down, we free up that renewable generation, drive thermal electricity out of the market, and get lower prices for everyone - a prospect which has worried speculators in electricity companies so much that it has wiped $2 billion off their value today.

Closing Tiwai Point will give us the near-100% renewable electricity system we want. It would give certainty around electricity investment, ending the perverse disincentive that limits new renewables. It would lower emissions, and lower prices for everyone. And it would free up a huge chunk of renewable electricity for other uses - such as electrifying the South Island's dirty coal-fired dairy factories, or cracking hydrogen for industrial use. The sooner it happens, the better.