Hydro-electric power

As far as I can tell all the suitable dam sites in the USA are up and running. Ditto in the United Kingdom.

New Zealand, which gets 68% of its electricity from hydro-electric power stations, and Norway are about the only countries that have a hope of handling most of the electricity demand with hydro and they have virtually all sites dammed already. However, both nations may be able to recover the situation with a vigorous energy saving campaign.

I have to tell you that all the major rivers in New Zealand have been dammed and damned. The Waitaki[5] in the South Island was proposed for a major hydro development, but local residents, the farmers who use a lot of the water now, Fish & Game[6] and Forest & Bird[7] all protested so vociferously that the scheme was dropped.

Killing off the Tiwai Point aluminium plant has been proposed as that would free a huge quantity of power, but what about transmission costs? Besides - does it make sense to generate power in Otago/Southland for extravagant use in Auckland?

There are any number of small sites around the country, but almost all of them are in areas where there are significant ecological or scenic values and, in any case, Fish & Game are gearing up for a fight, joined by Forest & Bird and a new Wild Rivers Protection (or words to that effect) group. Look forward to some stoush.

- source: David Gregorie, New Zealand.

Tiwai Point

This, the only aluminium smelter in New Zealand, was built in 1971. It is owned by Comalco, an Australian company. Bauxite ore is imported from Australia by bulk carrier and smelted into high purity aluminium ingots, which are then exported. This process uses electricity from the specially built Manapouri Power Station, which has a maximum output of 850 MW or 5100 GWh annually. Dedicated power cables link Manapouri to the smelter in Bluff, the southernmost town in New Zealand.

Tiwai Point is the world's 17th largest aluminium smelter. It produces 334,400 tonnes of aluminium. At 99.8 percent pure, this is the highest purity supply in the world. As a result it is used primarily for electronic components. New Zealand doesn't make these, so its safe to say that the whole output is exported. With a power consumption of 610 MW, the smelter consumes 15 percent of New Zealand's total electricity output. The government estimates New Zealand will need around 130-150 megawatts (MW) of new generation a year to meet increased demand, so turning off the smelter would provide cover for 4 to 5 years increase in electricity demand. This apparently assumes that the economy will continue to grow at 4.8% per annum and that electricity demand will track it. There are no new hydro-generation schemes in the pipeline to absorb this demand due to environmental protests: see above.

So what effect would shutting the smelter down have on the rest of the economy? It provides 960 jobs (0.05% of jobs nationally), and a net contribution to the economy of $NZ 121M (0.13% of GDP). It consumes 5.1 billion kWh (14% of the 36 billion kWh generated annually). The South Island electricity grid cannot take the additional power that closing the smelter would release without an upgrade. The cost of increasing the grid's capacity is estimated at $NZ 200M. This is the net worth to the country of two years smelter operation and in any case the grid will need this upgrade within 5 years if government figures are correct. It does not look like an obstacle to smelter closure to me.

The macroeconomic figures are provided by the CIA World Factbook for 2005. Tiwai Point statistics are from Assessment of the Economic and Social Impacts of the Tiwai Point Smelter on the Southland Economy, a report produced in January 2005 by Infometrics Ltd, an economics consultancy, and Business and Training Services. Estimates of the net worth of the smelter to New Zealand and of the costs of upgrading the electrical grid came from The Continued Contribution of the Tiwai. Point Aluminium Smelter, 2004-2012 which was produced by Brown Copeland and Co Ltd for Comalco, the owners of the Tiwai Point smelter. Business and Training Services are apparently a consultancy service provided by the Southern Institute of Technology's Invercargill campus. I say "apparently", because it does not appear in the Institute's online directory.

I would suggest that, all things considered, the operation is of questionable value to New Zealand. Tiwai Point smelt of political boondoggle when it was first proposed. It smells no better now and the country will have better uses for the power it consumes in the future.