New Zealand Aluminium Smelter (NZAS) has reached a deal with local energy provider Meridian Energy to allow the firm greater leeway when the plant’s power demands rise.
The new deal gives Meridian the right to require NZAS to cut its power demand by up to 50 megawatts in times of peak usage, power generation reduction, or hydropower shortage. In return, Meridian will pay NZAS a monthly fee and an amount per megawatt reduction by the plant.
The accord will run through the end of next year, ending concurrently with the current power contract.
Meridian chief executive Neal Barclay told local media of his firm’s gratitude to NZAS for agreeing to the change.
“New Zealand needs to build more flexibility into its electricity market and we believe demand response has an important role to play.”
The two firms are currently working on a new agreement that would extend their relationship after the current contract lapses at the end of 2024.
NZAS chief executive Chris Blenkiron noted that the aluminium smelter has cut consumption nearly every year over the past decade and expects to continue its cuts to guarantee a reliable power supply.
“This conditional agreement will give Meridian the flexibility it needs to manage demand at critical periods, and we are pleased to continue to play our part as a responsible electricity user.”
The deal is contingent upon approval by the country’s Electricity Authority, which has 45 days to rule on the agreement.