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Aluminum smelter boss sets out why Kiwis should want it to stay

New Zealand Aluminum Smelter chief executive Chris Blenkiron has hinted the company could invest itself in green energy, and become a foundation customer for a green hydrogen plant.

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New Zealand Aluminum Smelter chief executive Chris Blenkiron has hinted the company could invest itself in green energy, and become a foundation customer for a green hydrogen plant.

The chief executive of the Tiwai Point aluminum smelter says the smelter is good for the planet and employs more people and creates more wealth per unit of electricity it consumes than would a “green hydrogen” plant.

The Southland smelter would need to close by the end of 2024 if it failed to strike a new power supply deal with power generators, although there is speculation an agreement is in the wings.

The smelter consumes about 12% of the country’s power and alternative uses if negotiations were to fall though including using it to supply a new facility that would create hydrogen fuel for the transport industry by splitting water into hydrogen and oxygen.

Meridian Energy, which meets most of the smelter’s power requirements from its nearby Manapouri hydro scheme, last week selected Australian oil and gas giant Woodside Energy as “the preferred partner” for a possible green hydrogen facility in Southland.

READ MORE:
* Smelter closure’s job losses would likely impact more than one generation – CTU
* Tiwai Point aluminum smelter set to stay open ‘long term’, says broker
* Economist: Smelter closure impact would be ‘far less pronounced’

However, it has not presented a renewed deal with the smelter and the development of a green hydrogen plant as an “either, or”.

New Zealand Aluminum Smelter chief executive Chris Blenkiron told a conference held by the Trans-Tasman Business Council in Auckland on Friday that it was talking to generators now, describing the negotiations as “robust, constructive discussions underpinned by common purpose”.

Kavinda Herath / Stuff

National Party leader Christopher Luxon is encouraged by discussions he has had about the future of the aluminum smelter at Tiwai Point (video first published in April)

He agreed a green hydrogen plant and the smelter staying open need not be mutually exclusive, saying Tiwai “could even be a foundation customer for a green hydrogen facility in Southland” as there was potentially a large annual demand for green hydrogen in its industrial processes.

But he suggested that when it came to wealth creation and employment, making aluminum provided more bang for the megawatt.

“When comparing to say green hydrogen, aluminum provides five times the jobs and three times the GDP,” he said.

“When transporting hydrogen or green ammonia long distance, the global warming potential is significantly higher than burning natural gas.”

Blenkiron said the aluminum it produced at Tiwai Point was “amongst the least carbon intensive in the world”.

“We produce two tonnes of carbon per tonne of aluminium, versus an industry average of 12 to 13 tonnes of carbon per tonne of aluminium. So we’re not just marginally better, we’re damn near the best on the planet and that’s something we’re really proud of,” he said.

“Yes we turn [electricity] into aluminium, but we also turn it into those jobs and into GDP. We also use it to decarbonise the planet.”

Blenkiron admitted the company’s “social license” had become tatty.

“New Zealanders felt shortchanged after feeling we had engaged in brinkmanship resulting in everyone paying more for power because of us,” he said.

“We scored an own goal when we took too long to move the Ouvea Premix stored in the community.”

Robyn Edie/Stuff

Roger Neilson reminisces about his time at Tiwai. He was one of the first five apprentices at the New Zealand Aluminum Smelter in 1972.

But he suggested the company had changed.

“We are cleaning up and will do whether we make aluminum beyond 2024 or not. We’re listening, learning, rebuilding trust and repairing our tattered social license I spoke on,” he said.

The smelter could help the electricity system cope with peaks in demand by “dialing down our usage for a few hours when Kiwis are dialing up theirs”, and similarly assist with “dry years” when electricity was in short supply, he said.

The smelter had reduced its production in eight of the last 10 years to free up energy into the grid, but was exploring ways to provide more demand-response, he said.

Blenkiron also hinted that the company could generate some of the power it needed itself, saying it could add to the country’s stock of energy “by supporting the construction of new renewables”.

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