Low hydro lake levels lead NZ smelter to cut output

Low water levels in lakes used to generate hydro-electricity have caused New Zealand’s Tiwai Point aluminium smelter to reduce its electricity load and cut production.

Low water levels in lakes used to generate hydro-electricity and the associated increases in wholesale power prices have caused New Zealand’s Tiwai Point aluminium smelter to reduce its electricity load and cut production.

Stuff.co.nz reports that the smelter decided to reduce its electricity load from 572MW to 540MW. This is expected to cut production by 5 per cent or around 400 tonnes a week.

NZAS general manager Ryan Cavanagh has expressed concern about how and why energy prices have increased so dramatically in recent times.

For example, on March 7 the prices averaged $277/MWh but ranged between $114 and $551/MWh. Then on March 8 the price exceeded $600/MWh.

NZAS has worked closely with Meridian Energy to conserve hydro lake levels, but Cavanagh has been amazed by some of the price changes.

Writing on his blog, Cavanagh said, “Meridian have to take action to ensure they don't breach their consents . . . but as I said before, the real issue is why power prices have shot up so quickly in the last week.”

The low water levels have been caused by recent low rainfall in New Zealand. While not as badly affected as the North Island which is now officially in drought, the South Island has also been affected.