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Speaker 1: Of New Zealand Aluminium Smelters is going to have to

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Speaker 1: reduce its electricity usage at Ty Point by a total

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Speaker 1: of one hundred megawatts from early August. If you want

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Speaker 1: to know what one hundred megawatts means, it's about half

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Speaker 1: of the energy that's needed to Powerhawks Bay at this

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Speaker 1: time of year. The generative Meridian can request that they

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Speaker 1: ramp down their energy use to meet generation demands following

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Speaker 1: a new supply agreement that they started this month. Meridian

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Speaker 1: says the production, sorry, the reduction and power use will

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Speaker 1: help them manage hydro levels in the South Island energy

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Speaker 1: resources altered. Our chief executive John Carnegie's with me this morning, John,

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Speaker 1: Good morning to you. They seem to you, good morning,

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Speaker 1: good morning. Ty seems to be sort of okay with this.

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Speaker 1: Is there a problem?

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Speaker 2: There's this, ye, a wide problem with the both the

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Speaker 2: gas and the electricity markets. And unfortunately none of this

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Speaker 2: is some is a great surprise that's been in the

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Speaker 2: baking for half ausand odd years.

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Speaker 1: Because obviously in winter there's a there's greater demand and

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Speaker 1: there's also a dip in the in the hydro lake levels,

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Speaker 1: particularly in the South Island. Most of it is what

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Speaker 1: is what is your solution to this problem?

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Speaker 2: Oh well, look, I think predominantly actually we need to

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Speaker 2: revitalize the New Zealand gas markets because as as you said,

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Speaker 2: we've we've got a major electricity user having to turn

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Speaker 2: down production. So that's that's a loss of economic output

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Speaker 2: and that's and that's not a good thing. That's not

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Speaker 2: a good way to run your energy system. But we're

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Speaker 2: also experiencing the same with major guess users methanol producer

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Speaker 2: and others fertilizer and steelmakers are also burning down their production.

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Speaker 2: Make sure that the declining as they've got declining gas reserves,

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Speaker 2: declining guests reserves can be used in the electricity actually

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Speaker 2: prop up the electricity system. So you know, we're not

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Speaker 2: we're not we're not in a great we're not in

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Speaker 2: a great shape. And of course with the decline gases

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Speaker 2: now we have a threat of blackouts. We're struggling to

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Speaker 2: get the lights on and we're getting constant threat of blackouts.

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Speaker 2: We're actually because of gas again, we're not building the

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Speaker 2: gas fired peekers that the electricity system needs. And a

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Speaker 2: lot of that, of course comes back to previous government's

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Speaker 2: policy settings.

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Speaker 1: So that's the future exploration of oil and gas. I mean,

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Speaker 1: so thats been reversed. Is that basically going to fix

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Speaker 1: the problem, or is there actually more that you need

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Speaker 1: to be done in terms of legislation.

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Speaker 2: Oh well, look, I wish it was as easy as that,

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Speaker 2: because of course new gas exploration and appraisal is a

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Speaker 2: long term while a long term misue. And I mean,

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Speaker 2: of course, we do have our incumbent producers, you know,

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Speaker 2: who are in situ, and once the oil and gas

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Speaker 2: band has been removed from the legislation, because it's still

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Speaker 2: in place, they are more likely to be the most

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Speaker 2: likely to be the ones who can look at neighboring

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Speaker 2: fields to try and quickly ramp up production. But I

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Speaker 2: guess the point is Ryan, you know, if you can't

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Speaker 2: get extra gas elthily to continue to lose industrial production,

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Speaker 2: and we have the constant that are blackouts, and the

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Speaker 2: solutions are, unfortunately that we continue to import coal be

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Speaker 2: used in our electricity system because it's such a vital

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Speaker 2: balancing fuel at the moment in our electricity system, or

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Speaker 2: we import gas when new renewables are fantastic, we need

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Speaker 2: more of them, but we're always going to need gas

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Speaker 2: to back them up and make sure that the electricity

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Speaker 2: market functions properly. I mean the fact that Rio, the

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Speaker 2: aluminium smelter and Meridian have struck it there as fantastic.

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Speaker 2: But again it comes back to it's not a great way.

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Speaker 2: Bending down industrial production is not a great way to

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Speaker 2: run an your energy system now, and.

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Speaker 1: As you say, it happens every winter, doesn't it that

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Speaker 1: they're having to do this, John, Thank you very much

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Speaker 1: for your time. John Carnegie with us this morning, chief

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Speaker 1: executive at Energy Resources ALTEDOA. For more from News Talks

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