The Power Game: Where will Manapouri's electricity go?

Monday, 13 July 2020

Engineering contractors Chris Hughes and Murray Fitzgibbon talk about the closure of the Tiwai Point aluminium smelter, before the meeting at the Ascot Park Hotel in Invercargill.

The belief that the Tiwai Point aluminium smelter’s looming closure will lead to cheaper domestic power prices doesn’t stack up in the eyes of Dr Aaron Fox.

Fox has instead suggested the best use of the available energy would be to find an alternative industry for Southland.

Fox spent 13 years, up to 2001, putting together a thesis called The Power Game. It is an extensive piece of work that looks into the development of the Manapouri-Tiwai Point electro-industrial complex.

The Southlander, who was now based in Palmerston North, has followed the news of the smelter’s closure with both sadness and intrigue.

**READ MORE:

The power lines at Wairio near Nightcaps in Southland which run from Lake Manapouri to the Tiwai Point aluminium smelter near Bluff. [File photo].

* Tiwai Point closure: benefits and fishhooks

* Southland leaders vow to fight closure of Tiwai Point aluminium smelter

* Tiwai Point aluminium smelter to close, 1000 jobs to go

The smelter uses about 13 percent of New Zealand's electricity, the equivalent of about 776,000 houses.

The Manapouri Power Station was completed in 1971 to supply the electricity to the smelter near Bluff.

Owners Rio Tinto announced last week it will close the smelter next year.

“Can [that electricity] go into the national grid? Yes. Will it be as cheap for somebody at home turning on their power, as it is for Tiwai Point? No,’’ Fox said.

The power was not suited for the national grid and the supply of domestic customers, Fox said.

Dr Aaron Fox spent 13 years, up to 2001, putting together a thesis called The Power Game. [File photo].

He used the analogy that it would be like using a Formula One race car to go supermarket shopping.

A Meridian Energy spokesperson said there were several potential opportunities for the energy that will be released from Manapouri through the smelter closure.

The options included large users of electricity that could be located on the Tiwai site itself, or through selling the power to large and small customers across the country.

Transpower has indicated it will cost $600 million to put the transmission structures in place to take the power from Southland to Auckland.

That work was due to be completed over the next five to seven years.

Fox urged Southland’s leaders to ‘’dream big’’ when trying to find a replacement industry, or industries, to tap into that electricity and fill the large economic hole that the smelter will leave.

“If we’ve got all this electricity going begging, in my mind why not talk to a Bill Gates, or a James Cameron or somebody, and say, ‘if you want a Covid free workforce in a great location with power to burn, come south’.

“It doesn't hurt to dream big, the worst thing that can happen is somebody says, ‘yes’, and you have to realise that dream.’’

However, Fox conceded attracting new industries would take time. Any new industry would not be in place to fill the estimated 2600 Southland job losses next year through the smelter closure.

It took 10 years of hard bargaining to get Tiwai on the site and operating, Fox said.

“Your Tiwai Point workforce does not have the luxury of time. My concern is where are they going to go to get an equivalent job?’’

Fox pointed out that the smelter had been predicted to close in the 2020s, as far back as 20 years ago.

He felt there had been a level of complacency in Southland, in terms of simply hoping it would stay open instead of getting plan B sorted.

He felt Southland’s Regional Development Strategy, put together in 2015, was ‘‘more of the same’’ rather than looking for something completely different for the province.

From the regional development strategy, aquaculture remained a growth opportunity, although Fox added that too was a long-term option and not a short-term fix.

While not wanting to be all gloom, Fox acknowledged Southland had a challenge on its hands.

“The most important thing right now is the people and the workforce. Are they going to stay in Southland?

“They are talking 2500 direct and indirect employees tied up with Tiwai. If each of those people has a partner, that’s 5000 people, 10 percent of Invercargill’s population.’’

“This is bigger than Covid-19 for Invercargill.’’