Simon Johnson looks at how New Zealand Aluminium Smelter Limited is behind the Meridian/Genesis deal keeping the Huntly Thermal Power Station burning coal as the threat of closing the Tiwai Point smelter is stalling the construction of consented renewable energy projects.
My post really just noted how backwards the decision was in terms of reducing emissions of greenhouse gases. And that the expected shut-down of Huntly represented the only predicted drop in energy emissions New Zealand had advised to the UNFCCC. And that reduction has just gone up in smoke.
However, New Zealand Aluminium Smelters Limited and the Tiwai Point smelter have a malignant background role in the Huntly deal.
Meridian Energy said the deal was necessary to provide security of energy supply if the hydro lakes are low. That is only the case if the next ‘cab off the rank’ of renewable energy capacity is not built to replace Huntly. The generators don’t want to build any new renewable capacity if the smelter closes and Meridian then releases cheaper Manapouri hydro electricity onto the grid.
The decision to keep the Huntly coal thermal power station open for another four years is not only contrary to all New Zealand’s commitments and climate targets, it also sends the Ministry for the Environment’s projections of stabilising energy emissions to 2020 up in a cloud of coal smoke.
We seem to have had an extra dose of announcements and activities about climate change in an action-packed month of April.
Why would Fonterra spend several million dollars on a process lasting nearly a year, seeking planning consent for a huge new milk drier that it knows will never be built? Perhaps that’s not a lot of money to them – after all, one million is only three months’ salary for their CEO.
Fonterra’s proposed Studholme project, just outside of Waimate in South Canterbury, would see two new spray driers powered by two immense coal boilers – one 65MW, the other 50.
This is the biggest new coal burning project in the country, with the hearing happening just as our Minister for Climate Change is about to travel to New York to sign the Paris agreement where we undertook to reduce our greenhouse emissions a totally inadequate 11% below 1990 levels. (It’s even more inadequate when creative accounting turns this into more like +10%).
Last week was a bad week for coal mines on the West Coast.
Early in the week Solid Energy announced 24 workers would lose their jobs from the Stockton mine, and by the end of the week Bathurst announced that it is putting the Denniston mine on hold, laying off 12 workers – terrible news for those workers and their families.
At the heart of this is the same issue that sent Solid Energy under: plummeting coking coal prices – a price that has continued to fall, and was again cited as the reason for Solid’s new layoffs.
Over on the Denniston Plateau, Bathurst’s woes have stemmed, in the first instance, from the long-signalled closure of the Holcim plant in Westport, its biggest client. Bathurst has had to seek domestic buyers for its high grade coking coal, because of the low international price.
As the country reeled with the news last week that Solid Energy had gone into administration with a $300m debt, another event was happening in the Pacific that puts the debate in a context that it too seldom receives in New Zealand.
On Thursday, Kiribati Prime Minister Anote Tong wrote to world leaders calling for a moratorium on new coalmines.
“Kiribati, as a nation faced with a very uncertain future, is calling for a global moratorium on new coal mines. lt would be one positive step towards our collective global action against climate change and it is my sincere hope that you and your people would add your positive support in this endeavour,” he wrote.
“The construction of each new coal mine undermines the spirit and intent of any agreement we may reach, particularly in the upcoming COP 21 in Paris, whilst stopping new coal mine constructions NOW will make any agreement reached in Paris truly historical.”
UK Economist Sir Nicholas Stern agreed: “The use of coal is simply bad economics, unless one refuses to count as a cost the damages and deaths now and in the future from air pollution and climate change,” he told Reuters (Stern’s full statement here).
In June, Pope Francis said in his encyclical that the use of “highly polluting fossil fuels needs to be progressively replaced without delay.”