Latest / Early Edition with Ryan Bridge / John Carnegie: Energy Resources Aotearoa CEO on Tiwai Point scaling back its electricity usage to meet demands

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John Carnegie: Energy Resources Aotearoa CEO on Tiwai Point scaling back its electricity usage to meet demands · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Of New Zealand Aluminium Smelters is going to have to
• 0:02
  Speaker 1: reduce its electricity usage at Ty Point by a total
• 0:06
  Speaker 1: of one hundred megawatts from early August. If you want
• 0:09
  Speaker 1: to know what one hundred megawatts means, it's about half
• 0:12
  Speaker 1: of the energy that's needed to Powerhawks Bay at this
• 0:15
  Speaker 1: time of year. The generative Meridian can request that they
• 0:20
  Speaker 1: ramp down their energy use to meet generation demands following
• 0:23
  Speaker 1: a new supply agreement that they started this month. Meridian
• 0:26
  Speaker 1: says the production, sorry, the reduction and power use will
• 0:29
  Speaker 1: help them manage hydro levels in the South Island energy
• 0:33
  Speaker 1: resources altered. Our chief executive John Carnegie's with me this morning, John,
• 0:36
  Speaker 1: Good morning to you. They seem to you, good morning,
• 0:39
  Speaker 1: good morning. Ty seems to be sort of okay with this.
• 0:43
  Speaker 1: Is there a problem?
• 0:46
  Speaker 2: There's this, ye, a wide problem with the both the
• 0:49
  Speaker 2: gas and the electricity markets. And unfortunately none of this
• 0:54
  Speaker 2: is some is a great surprise that's been in the
• 0:58
  Speaker 2: baking for half ausand odd years.
• 1:01
  Speaker 1: Because obviously in winter there's a there's greater demand and
• 1:04
  Speaker 1: there's also a dip in the in the hydro lake levels,
• 1:07
  Speaker 1: particularly in the South Island. Most of it is what
• 1:10
  Speaker 1: is what is your solution to this problem?
• 1:14
  Speaker 2: Oh well, look, I think predominantly actually we need to
• 1:20
  Speaker 2: revitalize the New Zealand gas markets because as as you said,
• 1:26
  Speaker 2: we've we've got a major electricity user having to turn
• 1:31
  Speaker 2: down production. So that's that's a loss of economic output
• 1:36
  Speaker 2: and that's and that's not a good thing. That's not
• 1:38
  Speaker 2: a good way to run your energy system. But we're
• 1:42
  Speaker 2: also experiencing the same with major guess users methanol producer
• 1:47
  Speaker 2: and others fertilizer and steelmakers are also burning down their production.
• 1:53
  Speaker 2: Make sure that the declining as they've got declining gas reserves,
• 1:59
  Speaker 2: declining guests reserves can be used in the electricity actually
• 2:03
  Speaker 2: prop up the electricity system. So you know, we're not
• 2:08
  Speaker 2: we're not we're not in a great we're not in
• 2:09
  Speaker 2: a great shape. And of course with the decline gases
• 2:17
  Speaker 2: now we have a threat of blackouts. We're struggling to
• 2:20
  Speaker 2: get the lights on and we're getting constant threat of blackouts.
• 2:24
  Speaker 2: We're actually because of gas again, we're not building the
• 2:28
  Speaker 2: gas fired peekers that the electricity system needs. And a
• 2:32
  Speaker 2: lot of that, of course comes back to previous government's
• 2:35
  Speaker 2: policy settings.
• 2:36
  Speaker 1: So that's the future exploration of oil and gas. I mean,
• 2:40
  Speaker 1: so thats been reversed. Is that basically going to fix
• 2:43
  Speaker 1: the problem, or is there actually more that you need
• 2:46
  Speaker 1: to be done in terms of legislation.
• 2:49
  Speaker 2: Oh well, look, I wish it was as easy as that,
• 2:52
  Speaker 2: because of course new gas exploration and appraisal is a
• 2:57
  Speaker 2: long term while a long term misue. And I mean,
• 3:02
  Speaker 2: of course, we do have our incumbent producers, you know,
• 3:05
  Speaker 2: who are in situ, and once the oil and gas
• 3:08
  Speaker 2: band has been removed from the legislation, because it's still
• 3:11
  Speaker 2: in place, they are more likely to be the most
• 3:15
  Speaker 2: likely to be the ones who can look at neighboring
• 3:17
  Speaker 2: fields to try and quickly ramp up production. But I
• 3:23
  Speaker 2: guess the point is Ryan, you know, if you can't
• 3:25
  Speaker 2: get extra gas elthily to continue to lose industrial production,
• 3:30
  Speaker 2: and we have the constant that are blackouts, and the
• 3:33
  Speaker 2: solutions are, unfortunately that we continue to import coal be
• 3:38
  Speaker 2: used in our electricity system because it's such a vital
• 3:42
  Speaker 2: balancing fuel at the moment in our electricity system, or
• 3:45
  Speaker 2: we import gas when new renewables are fantastic, we need
• 3:51
  Speaker 2: more of them, but we're always going to need gas
• 3:54
  Speaker 2: to back them up and make sure that the electricity
• 3:57
  Speaker 2: market functions properly. I mean the fact that Rio, the
• 4:01
  Speaker 2: aluminium smelter and Meridian have struck it there as fantastic.
• 4:08
  Speaker 2: But again it comes back to it's not a great way.
• 4:13
  Speaker 2: Bending down industrial production is not a great way to
• 4:16
  Speaker 2: run an your energy system now, and.
• 4:18
  Speaker 1: As you say, it happens every winter, doesn't it that
• 4:20
  Speaker 1: they're having to do this, John, Thank you very much
• 4:23
  Speaker 1: for your time. John Carnegie with us this morning, chief
• 4:25
  Speaker 1: executive at Energy Resources ALTEDOA. For more from News Talks
• 4:29
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• 4:32
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• 4:35
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