New Zealand Aluminium Smelter agrees with Meridian on flexible power demand to combat crisis

According to a report on April 5, the New Zealand Aluminium Smelter (NZAS) and Meridian Energy are likely to sign a new deal agreeing on flexible power demand from the smelter during grid stress or hydro shortage.

The news came after Meridian submitted an application on Wednesday with the Electricity Authority, which holds the right to approve the deal within 45 business days.

The new deal will give authority to Meridian to ask the smelter cut electricity demand by up to 50 megawatts when the energy system goes through a crisis, such as during winter peak periods or when generation or transmission experiences an outage.

In return for the demand cut, Meridian will pay the smelter a fee and an amount per megawatt reduction.

The new agreement will be valid until December 31, 2024, like the current electricity deal. So, Meridian and NZAS are in correspondence about the possible new agreement that will apply after the end of next year.

Meridian chief executive Neal Barclay said, "New Zealand needs to build more flexibility into its electricity market and we believe demand response has an important role to play." He appreciated the flexibility shown by NZAS.

NZAS chief executive Chris Blenkiron said the smelter reduced its energy consumption in the past eight of the ten years and would continue doing so to ensure a seamless electricity supply.

He added, "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."