Contracts Signed with Tiwai Smelter to Provide Stability for NZ’s Electricity Market

One of the key conditions of the agreement between the electricity generators and NZAS is to provide up to 185MW of demand response.

The signing of individual 20-year bilateral long-term contracts between the New Zealand Aluminium Smelter (NZAS), Meridian Energy, Contact Energy, and Mercury NZ will provide certainty for the electricity market and a welcome boost to the Southland economy, Energy Minister Simeon Brown announced.

“The Tiwai Smelter is New Zealand’s largest electricity user. Their signing of these long-term contracts with Meridian Energy, Contact Energy, and Mercury NZ will provide much-needed certainty for electricity generators. Demand for electricity is going to remain high, and we expect that this news will lead to more electricity generation being brought online,” said Mr. Brown.

One of the key conditions of the agreement between the electricity generators and NZAS is to provide up to 185MW of demand response. This measure will help ensure that there is electricity available for households during dry years when electricity generation is tight.

“As our electricity system becomes more reliant on renewables, intermittency of generation becomes a larger problem. This commitment from NZAS will help ensure the grid can continue to deliver electricity to Kiwis during times of peak demand,” Mr. Brown added.

Mr. Brown expressed his satisfaction with the agreement, noting that it provides much-needed certainty not only for the smelter’s workers and their families but also for all the businesses and jobs indirectly supported by the smelter and its operations. “This will be welcome news for the people of Southland and provide confidence for their regional economy,” he said.

The 20-year contracts mark a significant step in ensuring the stability and sustainability of New Zealand’s electricity market, reflecting a collaborative effort to address future energy demands and regional economic growth.