Back from the edge of the wilderness

I have just come back from the best break from normal life that I’ve had for a long time. I have spent nine days on the edge of the wilderness in Fiordland and the south west of the South Island.

First base was Te Anau, which is an easy half day drive from Dunedin, 290m km. From there some of the highlights were:

  • Launch trip across Lake Te Anau to visit the Te Anau Caves. Glowworms are modest compared to Waitomo, but going up a narrow passage still being formed by a stream inside a mountain is a worthwhile experience.
  • Trip to Doubtful Sound. This leaves from Manapouri, 20 km south of Te Anau, starting with a launch trip across the lake to the West Arm where the power station is mostly buried 180 meters down. Then there is a 19 km bus trip through Fiordland forest over the Wilmot Pass and down to Deep Cove, the innermost part of Doubtful Sound.
  • I’ve been to Doubtful Sound a couple of times before and this was as good, it’s quiet and remote (two other boats were out when we were there but mostly out of sight). It was a fine day with no rain for several days so waterfalls were scarce, but reflections up Crooked Arm were amazing.
Crooked Arm, Doubtful Sound, New Zealand

Also from Te Anau:

  • Lakeside walk including a stop at the bird park where there are kaka, morepork and takahe.
  • Walked a few kilometres of the Kepler Track, on of New Zealand’s Great Walks. The part we did was through beech forest alongside Lake Te Anau.

There’s plenty of accommodation options in Te Anau and also a variety of mostly tourist grade eating options. With Covid and still being winter it was quite quiet.

Next was a trip to Milford Sound, which is an experience that begins with the 118 km trip alongside Lake Te Anau and then splits off up the Hollyford Valley. There are a number of walks up the Hollyford, in particular the short board walk at Mirror Lakes and also the Lake Gunn walk.

We deliberately chose a rainy day. I have been to Milford a couple of times before but when it was dry. This time we headed into reltively (for Fiordland) light rain but enough for waterfalls in all directions once we got up over the divide.

The trip up to the huge rock face where the Homer Tunnel takes you to the other side is impressive in any weather. Avalanche risk was low because there hadn’t been much snow.

Down the other side to Milford was one jaw dropping sight after another, with water pouring off the near shear sided mountains in all directions.

We then got on a launch and headed out along Milford Sound. Most of the time we were surrounded by waterfalls, from ribbon trickles to pouring torrents. An amazing experience.

We stayed the night in Milford Sound in reasonably priced fantastic accommodation with views of mountains and waterfalls in all directions, a very good restaurant, and visits to the large glass doors by kea and weka.

By mid morning the next day most of the mountains were mostly revealed amongst the clouds. There are great sights in all conditions at Milford.

The trip out was on it’s own great but it eases us out of the magnificent grandeur. There are good reasons for Milford Sound being rated one of the top tourist experiences anywhere, and it is more or less in our back yard. And on this trip it was far from crowded.

This was just the firsdt half of the trip. from there we chilled out in Manapouri, went to Lake Hauroko for the first time where there is a great forest walk (huge beech and totara trees), and stayed for a couple of nights in Riverton on the south coast.

And coming home yesterday we detoured through the Catlins, far more interesting than the main highway.

So that’s why I have been doing minimal blogging. Some days I had no internet connection, other days I just didn’t care about being connected to the wider world.

Has anything happened that matters while I’ve been away?

Tiwai smelter to shut down next year, Government accepting closure

This is one of those ‘shock but not a surprise announcements – Rio Tinto has announced that they won’t renew their power contract for the Tiwai Point aluminium smelter and will shut down permanently.

Rio Tinto have claimed power prices have been too high for years, negotiated a deal with the Government in 2015 – see Key says Government won’t add to NZ$30 million of support given to Rio Tinto to keep Tiwai Pt open –  but have still been losing money as world power prices have declined.

The Government has said they will support the workers and businesses affected in Southland, but they won’t try to keep the smelter running.

RNZ: Rio Tinto announces plans to close Tiwai Point smelter

Rio Tinto has announced that it will wind down New Zealand Aluminium Smelters, best known as Tiwai Point smelter.

In a statement to the Australian Stock Exchange, the company said its strategic review had “shown the business is no longer viable given high energy costs and a challenging outlook for the aluminium industry.”

The company has given Meridian Energy notice to terminate its power contract, which ends in August next year. It expects the wind-down of operations will be done by then.

It said it had had discussions with interested parties but could not secure a power contract that would have kept the smelter competitive and profitable.

The smelter’s viability has been questioned for much of the past decade as it grappled with weak metal prices, power costs, and over capacity which has seen smelters closed around the world.

It employs about 1000 people directly and creates a further 1600 indirect jobs in Southland. The smelter is owned by Rio Tinto and Japan’s Sumitomo Chemical Co.

NZ Aluminium Smelters chief executive Stu Hamilton told Morning Report they were on a path to winding down operations.

“We don’t think there’s a deal that can be done that will deliver competitively-priced power to the smelter which is necessary for it to be sustainable.

“We do believe that nothing has been left on the table but if we’re mistaken then the window is still available for a deal to be put on the table but the window for that is closing fast now that we have terminated our electricity contract with Meridian.

It looks like they aren’t mistaken, the Government seems to be not interested in trying to rescue the situation. Their official response shows they intend to deal with the closure rather than try to prevent it: Government will support the people and economy of Southland

The Government will support the Southland economy in the wake of multinational mining company Rio Tinto’s decision to follow through with its long signalled closure of the Tiwai Point aluminium smelter.

“This day has unfortunately been on the cards for some time now, but nevertheless the final decision is a blow to Southland and all those who work at the smelter,” Grant Robertson said.

“The smelter supports hundreds of jobs in Southland and the Government will work with the local community to support economic development in the region to help offset this loss.

“Rio Tinto has indicated it wants to work with the Government to support the community during the wind down of the smelter.

“As we have done in Taranaki, we will support a just transition to more job opportunities. We know the strengths of Southland and we want to build on them in areas such as agriculture, aquaculture and manufacturing. There is also an opportunity to support other energy intensive projects like green hydrogen and data centres.

“There is a degree of inevitability to the decision, as Tiwai has been on the market since 2011, and former Prime Minister Bill English told Rio Tinto in 2013 there would be no further taxpayer money provided.

“Since the smelter opened taxpayers have been subsidising Rio Tinto to keep it open, either directly or indirectly through cheaper power, and Emissions Trading Scheme allocations of over $48 million per year. The company has made the decision not to keep operating without further subsidies.”

Not only does the Government seem happy to see the smelter close, they are looking at what opportunities that may bring:

“Rio Tinto’s decision not to extend their generous power contract with Meridian will flow through to the rest of the market,” Megan Woods said.

“It is disappointing that Rio Tinto is deciding to close one of the world’s lowest carbon aluminium smelters, in favour of keeping open coal plants.”

“Eventually it will free up around 13 percent of total power generated in New Zealand which will relieve some pressure to build new generation. The increased supply will also have a positive impact on prices.

“I also want to make clear that the Government expects Rio Tinto to meet their obligations for clean-up of the site (an estimated $256 million) and do the right thing on the dross,” Megan Woods said.

RNZ: Tiwai smelter closure: A ‘tough day’ for Southland – Grant Robertson

“The message I have for the people of Southland today is the government stands alongside you and with you to start providing new job opportunities in the region.

“This is a very sad day for Southland but there are also opportunities attached to this.”

Not just a tough day, it could be a tough few years if not decade for Southland. It’s hard to see how ‘new opportunities’ will pick up the slack for two and a half thousand jobs, inevitable business losses and the wider family and community impacts.

The union representing workers at the smelter says about 1000 people directly employed by the smelter would be affected, but the decision would also impact on a further estimated 1600 workers in the supply chains.

E tū union said staff were shocked and dismayed and never thought threats to close the plant would ever eventuate.

Negotiator specialist Joe Gallagher said it was not too late to get back around the table, strike a deal, and save jobs.

Sounds like it is too late.

There was a lot of other response.

Contact Says Smelter Closure Is ‘disappointing’

Contact Energy (“Contact”) CEO Mike Fuge said Rio Tinto’s intention to effectively close New Zealand’s Aluminium Smelter (“NZAS”) by giving 14 months’ notice on their electricity contract with Meridian Energy was “very disappointing”.

He said all commercial parties involved in dealing with NZAS, including Contact, had collectively delivered significant cost reductions for electricity. “We’ve all had a strong desire to help secure the financial sustainability of the unique low-carbon smelter at Tiwai, and retain the 1,000 high-paying jobs in Southland, plus the 1,600 contractor and supplier roles.

Contact’s ‘shovel-ready’ Tauhara geothermal power station remained New Zealand’s cheapest and most attractive option for new, renewable, baseload electricity generation, but Mr Fuge said the sensible option was to defer this investment. “Tauhara remains a fantastic project, however it is prudent to press pause for now. We need to factor in the impact of COVID-19 and the potential exit of NZAS and get a clearer picture of demand,” he said.

So that is one ‘shovel-ready’ project that may not happen now.

Rio Tinto Departure Makes Decarbonisation Projects ‘shovel Ready’

Rio Tinto’s smelter, which uses 13 percent of New Zealand’s electricity, is now due to close in August 2021. Greenpeace Executive Director, Dr Russel Norman, says the Tiwai closure will release a huge amount of low-carbon and affordable power back onto the grid.

“The Tiwai closure will mean cheaper power for New Zealand households. It also means there is more clean, renewable energy that can be used to power our cars and industries as we move to a zero carbon economy.

“This will cut climate emissions out of the transport and industrial sectors, while simultaneously helping to reduce New Zealand’s current account deficit by cutting the billions of dollars we spend on importing oil for the transport sector.

“With a ready supply of clean and affordable hydropower now being made available, the Government should create the conditions needed to increase the number of electric cars, buses and trains.”

Norman also says Rio Tinto’s departure blows any case for new coal, gas or oil development completely out of the water.

Rio Tinto Decision Following Strategic Review Of Tiwai Smelter

Mercury notes Rio Tinto’s announcement to wind-down operations at New Zealand Aluminium Smelters Limited (NZAS) with expected closure in August 2021.

Mercury reiterates previously made statements that it is relatively well placed to respond to the decision to close the smelter, with all of its renewable generation assets in the North Island close to load centres and largely free of major transmission constraints as a consequence of reduced South Island electricity demand.

Tiwai Closure Points To End Of Heavy Industry Under Ardern

“The closure of Tiwai Point signals the end of heavy industry under the Ardern Government,” according to ACT Leader David Seymour.

“Labour is squeezing the life out of the economy. For the past three years, it has made it much more difficult and costly for businesses like Tiwai Point to be productive.

“We have a Wellington-centric government of former student politicians that just doesn’t get how the economy works.

I doubt ACT would support a government subsidy of a foreign owned company.

New Zealand First Disappointed Rio Tinto Playing Games With Southlanders

Australian mining company Rio Tinto is playing games with the people of Southland, says New Zealand First List MP, Mark Patterson, following today’s announcement that Tiwai Point is to close.

“It is unconscionable that despite massive support from New Zealand, multi-billion dollar company Rio Tinto is bailing on Southlanders at the height of an economic crisis,” said Mr Patterson.

“New Zealand First has consistently warned that Rio Tinto would walk away, just as they did in Australia, when it no longer suited them. And with a 14 month timeframe, this looks like Rio Tinto is using local workers to play hard-ball with New Zealand power companies.

Patterson seems to be speaking to people who will be adversely affected by the closure while ignoring that NZ First are a part of the Government that is waving goodbye as Rio Tinto walks away.

The End Of Tiwai Pt Could Open Huge Opportunities For NZ

The announced closure of Tiwai Point is welcome news for the clean energy future of New Zealand, and presents huge opportunities in areas such as electrifying transport and developing new, high-tech industries, Coal Action Network Aotearoa said today.

Provided this is not a negotiating tactic, Tiwai’s shutdown should see the closing of the country’s only coal-fired power station at Huntly, which Meridian persuaded Genesis to keep it open as part of the deal it did with Rio Tinto in 2016.

Once the smelter is closed, New Zealand’s emissions will drop by upwards of 1.5 million tonnes a year, emissions the taxpayer has been subsidising NZ Aluminium Smelters for.

“We now have a massive opportunity to look at where and how we will use the renewable energy that will be freed up: we could electrify the South Island’s rail network, and make huge steps toward electric transport,” said CANA’s Rosemary Penwarden.

Union Calls For Just Transition For Workers As Smelter To Close

E tū union is calling for a ‘Just Transition’ for workers in the wake of Rio Tinto’s announcement it will be closing its smelter at Tiwai Point.

“This is a significant employer and this company is at the heart of its community. A closure will affect the entire supply chain, including other local suppliers,” he says.

Joe says the Government needs to consider a similar approach to that used in Taranaki with the Taranaki 2050 Roadmap, to ensure a Just Transition takes place.

I wonder if the E tū union supports the Labour led government letting Tiwai close:  Affiliations – E tū is affiliated to the New Zealand Labour Party.

Infracom To Factor Tiwai Closure In Infrastructure Strategy

Today’s announcement of the potential closure of the Tiwai aluminium smelter by Rio Tinto has very significant implications for the economy and energy market. This will be a key consideration in Infracom’s thinking as it develops New Zealand’s 30 year Infrastructure Strategy.

Tiwai Point Closure – Expert Reaction

Associate Professor Nicola Gaston, Co-director, MacDiarmid Institute for Advanced Materials and Nanotechnology:

“The closure of Tiwai Point is first and foremost a loss for the people of Southland who will be impacted by the loss of thousands of jobs at an awful time. However, it is not a huge surprise, on some level: Rio Tinto has threatened to pull out previously, repeatedly, in negotiating the cost of the electricity supply with Government, and the discussion about what New Zealand should do with the energy is not new.

Jeanette Fitzsimons (former Green Party leader) pointed out late last year that ETS subsidies for the smelter would total a billion dollars by 2030, and that we should consider better uses for the 13 per cent of our electricity supply, all of it renewable.

“Many of my colleagues at the MacDiarmid Institute are deeply passionate about this being the right time to invest in new tech to make the most of our renewable energy advantages in New Zealand – whether this is a form of energy storage, which could include green hydrogen generation, or something even more ambitious, such as using the energy for manufacture of other components needed for a zero carbon economy, such as solar panels – these options exist, but require a government-led business case to be developed.

Dr Anna Berka, Lecturer in Management, Entrepreneurship & Innovation, Massey University:

“Rio Tinto has flagged potential closure for some years. The current crisis has clearly pushed it over the edge. Previous governments went far to make it comfortable here; it was granted some of the lowest electricity prices, reportedly below cost. In return, Rio Tinto has been obstructive to emissions pricing, and by all indications seems to have abused our resource consent process as well. As the largest consumer of electricity in the country, its closure will have ripple effects on the entire energy sector, resulting in temporary surplus capacity – and resulting in downwards pressure on market prices, as well as very likely reducing the viability of new generation capacity currently under development.

Professor Emeritus Ralph Sims, Sustainable Energy and Climate Mitigation, Massey University:

“Few countries have surplus power generation available to meet the present electricity demand as will be the case in New Zealand once the Tiwai Point smelter starts phasing out its high electricity-consuming aluminium potlines over the next year or two.

“We know there will be growing demand over the next decade or two for electricity, especially for electric vehicle charging and industrial and commercial heating by companies, schools etc., looking to displace coal with electricity.

“This will also further reduce the combustion of gas and coal used for power generation and therefore help lower the total carbon dioxide emissions from electricity generation.

“So, in a perfect world, closing Tiwai Point should theoretically result in greater shares of renewable electricity, a reduction in greenhouse gas emissions, and cheaper electricity prices for all New Zealanders.

“However, it’s not that easy.

“So, will New Zealand electricity consumers reap the economic and environmental benefits of having cheaper hydro power suddenly becoming available once the smelter starts winding down?

“I have my doubts.”

Associate Professor Nirmal Nair, Department of Electrical, Computer and Software Engineering, University of Auckland:

“What the likely energy consequences are, which we as a country need to prepare for, is based on how this news is going to play out in the next two to 10 years or so.

“If the demand destruction of electricity load happens in the next two to three years, we will need to spend some dollars to strengthen the transmission assets there to port the electricity to North Island.”

Adjunct Professor Harvey Weake, Faculty of Engineering, University of Auckland:

“I guess the industry has been bracing for this announcement for some time. Given the plant is close to 50 years old, that is a pretty good innings for such a plant and without a major capital injection to maintain its competitiveness, it was just a matter of time. Newer plants are just more energy efficient.

“Short-term economic losses from the loss of Tiwai will be primarily through the loss of local fixed costs from that industry, but given it is foreign held, the impact to New Zealand’s economy will be pretty modest given it wasn’t projected to make significant profits anytime soon.”

Professor Sally Brooker, Department of Chemistry, University of Otago:

“New Zealand should make the most of that electricity for producing green products (e.g., hydrogen, ammonia, silica for PVs, and/or even keep making super green aluminium on a smaller scale as Jeanette Fitzsimmons suggested in an earlier Spinoff article), and use the Regional Development Fund or COVID-19 budget to develop the necessary plant at Tiwai. It is a great site to do so. And it would keep skilled jobs in Southland as, without the smelter, the region will be absolutely hammered by the job losses.

“New Zealand needs to be investing heavily in further developing green energy generation and use, as part of our current government spending/investment. We could be world leaders in going completely to green energy (including transport – electricity, green hydrogen etc), as the world looks to respond to global climate change. We start from such a strong position with our high percentage of green electricity.”

We will see over the next few days or weeks whether the Government was preparing for this and has plans for alternative use of the Manapouri power, and has alternative job and business opportunities for Southland. The Government must have known the closure of Tiwai was likely.

 

 

 

 

 

 

Do both Rio Tinto and the Government want Tiwai smelter closed?

There is no doubt that if the aluminium smelter at Tiwai Point was closed it would have a massive negative impact on Invercargill and Southland. But owners Rio Tinto are considering shutting the smelter down.

And it’s possible the Government would be happy to let this happen. The Greens have never liked big industry, Labour may be able to use the large amount of power used by the smelter to be diverted into electrifying transport, and NZ First’s regional development handouts seem to be stacked northward.

Stuff: Rio Tinto ‘not bluffing’ about threat to shut Tiwai Point smelter

A Rio Tinto “closure team” will arrive at the Tiwai Point Aluminium Smelter near Bluff next week to assess what needs to be done if a decision is made to close the site.

NZAS chief executive Stew Hamilton confirmed members of the Rio Tinto closure team would travel to Tiwai next week and be at the smelter for four days.

The work would be ongoing in the coming months, he said.

The team would be tasked with commencing the detailed work needed to assess what was required to be done, should a decision be made for NZAS to close following the conclusion of Rio Tinto’s strategic review.

The closure review work would cover a range of issues which would need to be considered when preparing for a site closure, including regulatory matters and logistics and scheduling.

Last week, Hamilton said an update of the strategic review would be given in February or March.

Hamilton said the financial position of the smelter was serious, hence the option of closure.

“It’s the first time Rio Tinto has announced a strategic review for the site and that means they are actually going to formally go through the process of assessing all the options including curtailment and closure.”

It was “hard to know” how likely closure was, but it was one of the options, he said.

“We have been losing money for some time and we need to make a fundamental improvement in the financial status of the smelter.”

Options ranged from operating at the status quo, which would require cheaper power, to closure of the plant, he said.

Energy Minister Megan Woods  ruled out taxpayer help to keep the Bluff smelter open.

Thomas Coughlan (Stuff): MPs turn up the heat as Rio Tinto Tiwai Point closure consensus grows

There’s a barely perceptible consensus emerging within Parliament that Rio Tinto’s Tiwai Point aluminium smelter should close.

No-one wants to say it in public – what politician would want to stick their neck out for job losses? – but for their own reasons, politicians from most parties think the smelter’s days are numbered.

The reasons are complex. Some of a free-market persuasion see Tiwai as a business on life support, kept alive as a result of a sweetheart deal from Meridian Energy and propped up by a $30 million cash payment from the government in 2013.

Others say the smelter should close for environmental and social reasons.

It consumes 13 per cent of New Zealand’s entire electricity supply. Almost all of its electricity is sourced from a hydro dam in Lake Manapouri that was built for the purpose of supplying the smelter. This allows Tiwai to claim it produces the greenest aluminium in the world, but it also means that an enormous amount of clean hydro-energy is tied up supplying the smelter. Freeing up the 13 per cent capacity and feeding it into the grid would mean we could probably afford to reduce our reliance on the Huntly coal generator.

This coal-fired power plant is kept online to accommodate for peaking periods and dry seasons, when the hydro lakes that generate the majority of our electricity are stretched.

In fact, the strongest arguments for closing Tiwai aren’t actually about closing Tiwai at all – they’re about significantly reducing our reliance on Huntly.

But Manapouri and Huntly are a long way apart.

Someone, either the government or consumers, would also have to step up to pay the cost of getting the electricity from Manapouri to the rest of the country. It’s already hooked up to the national grid, but Treasury estimated in 2012 that an additional $200m will need to be invested to upgrade the lines.

That doesn’t sound much in the whole scheme of things.

But the cost to Southland would be huge.

Southland would be particularly hard hit. Nearly 1000 jobs would go and investors who bought shares in the power companies partially privatised by the previous government would be burnt badly.

Labour and Greens tried hard to burn the partial privatisation of the power companies, arguably reducing the value to the Government in the sales.

The biggest effect of closing the smelter would be on New Zealand’s emissions. Again according to Treasury, Huntly produces 20 per cent to 50 per cent of the generation sector’s total emissions – these would be slashed by closing the smelter.

Some would see that as a compelling reason to let Tiwai close. But:

Tiwai is itself a large emitter, but here’s the rub: it’s a much cleaner smelter than anyone else has got. Closing it would just mean a much dirtier smelter producing aluminium elsewhere. It’d make our emissions look good, but do little for climate change.

Similar claims were made with the oil and gas exploration ban – it could lead to importing more dirtier fossil fuels.

But New Zealand has to take a hit somewhere. We can’t keep saying our aluminium, like our agriculture, is dirty, but cleaner than everyone else’s.

he unforgiving truth is that extra generation will have to come from somewhere and 1000 jobs and $200m worth of power lines is a rather low cost for the “nuclear-free moment” this Government wants climate change to be.

But shutting Tiwai, oil and gas and downsizing dairy may just move the emissions problems to less clean and less efficient places in other countries.

There is another issue we need to face – if New Zealand wants to make a major change to electric transport, it needs more electricity. Or it needs our largest electricity user to shut down, freeing up a large amount of hydro energy.

And there’s another possible complication. Shutting the Huntly coal station, and moving to greater reliance on hydro electricity for transport, leaves us vulnerable to the weather.

Perhaps we can hope that climate change will make our rainfall more reliable, to keep the lakes and dams that power the country full.

Poneke – those were the days

I haven’t seen Poneke commenting in mainstream social media for some time, but he has popped up on a Standard thread Protest at sea. The post compares Labour’s Mururoa protest in 1973

and National’s legislation restricting protest at sea in 2013.

Poneke reminisces:

Ah, those were the days when there was still hope for this nation,
before we were reduced to profit and loss signs on a desperate
gimlet-eyed accountant’s balance sheet;

Those were the days when people still cared about ideas, and were
prepared to put their bodies in the way of Police batons on the street;

Those were they days when advanced weapons posed existential
problems for humanity – to quote Netanyahu mangling Sartre;

Those weapons still exist, but are no help in a civil war, or in
resolving human complexities;

We can still draw inspiration from those days – which made
NZ what it is today, a legacy mined by quick-buck merchants from
fantasy factories and trading floors.

Protest has certainly changed from the days of Manapouri, Mururoa and the Springbok tour.

Now protest seems to have been overwhelmed by party politicking, and crying wolf over and over is taking it’s toll.

I can’t see any massive taking to the streets over a safety zone being legally imposed on protest at sea. It seems little more than just another political ploy to attract votes.

The Mururoa protests were very effective and didn’t have to get anywhere near as close as 500 metres to the atoll test zone.