Rio Tinto and Meridian Enhance New Zealand’s Energy Security with Power Agreement
New Zealand's energy security for the upcoming winter has been bolstered following an agreement between Rio Tinto, the majority owner of the Tiwai Point aluminium smelter, and Meridian Energy, its main power supplier. The deal will enable the redirection of 20 megawatts (MW) of electricity back to the national grid during peak demand periods, in addition to an existing 50MW demand response agreement with Meridian.
Tiwai Point, recognized as New Zealand's largest electricity consumer, accounts for about 13% of the country's power usage. This new arrangement is set to enhance the national grid's capacity to manage demand, particularly during the winter months when energy consumption typically spikes.
Chris Blenkiron, Rio Tinto's chief executive and general manager for the smelter, highlighted the initiative's importance in maintaining grid stability during potential energy shortages. He also emphasized the commitment to incorporating demand response capabilities in future electricity supply agreements for Tiwai, underlining a shared responsibility in ensuring nationwide energy reliability.
Meridian will have the flexibility to call upon the additional 20MW of power as needed throughout a 12-week period this winter, starting from June 3. This capacity equates to the energy requirements of Napier, providing a significant boost to the grid during critical times.
Neal Barclay, Meridian's CEO, stressed the importance of innovative solutions like demand response in achieving a more renewable electricity system for New Zealand. He pointed out that such agreements reduce the need for coal-powered energy during peak times, aligning with the country's environmental goals.
The arrangement comes as Transpower, the national grid operator, calls for increased investment in flexible power systems to meet the rising demand and ensure the grid's resilience, especially as New Zealand moves towards a more renewable and intermittent electricity supply.
Furthermore, Rio Tinto is in discussions to secure a long-term electricity supply contract for the Tiwai smelter beyond December 2024. These negotiations aim to establish a sustainable operational framework for the smelter, encouraging renewable energy investment and offering more flexible demand responses to benefit the broader energy market.
