The Tiwai sign at the New Zealand's Aluminium Smelter site at Tiwai Point. Photo / Gregor Richardson
The Tiwai sign at the New Zealand's Aluminium Smelter site at Tiwai Point. Photo / Gregor Richardson
New Zealand First and National don't agree on much these days, but this morning the two parties were in agreement over one thing: Labour stole their Tiwai Point smelter policy.
"Better late than never," New Zealand leader Winston Peters said soon after the policy was announced.
National leader Judith Collinsused the exact same words when asked about the policy at a media stand-up not long after.
She said it was "flattering" that their rivals were using a policy they had already announced – Peters' said Labour was "playing catch-up".
Labour's plan, if it's re-elected come October 17, is to keep Tiwai on life support for three to five more years.
The party's plan is to facilitate a shakeup when it comes to how much companies pay for electricity – this would mean Tiwai would end up paying less for its power.
But the company would have to agree to a number of "bottom lines" – such as maintaining the current level of employment at the smelter – for the cheaper power price deal to remain on the table.
In July, Rio Tinto – the company which owns the Southland smelter – announced its plans to wind down New Zealand Aluminium Smelters Ltd, including Tiwai Point, by August 31 next year.
Rio said the business was "no longer viable given high energy costs and a challenging outlook for the aluminium industry".
As well as being one of the largest employers in Southland – directly employing 1000 people, with 1600 indirect jobs – it is one of New Zealand's biggest power users. This is where National and Labour's plans intersect.
The two major parties want to put the smelter on life support for at least another five years.
They plan to do this by renegotiating the Transpower agreement.
Under the current system, electricity users – such as large companies – pay for their power and the costs associated with maintaining the electricity grid as a whole, based on how much they use.
Rio Tinto's position is that it pays a disproportionate amount for the transmission infrastructure across New Zealand, given it obtains most of its electricity from the nearby Manapouri hydroelectric power station.
Both National and Labour want to renegotiate the Transpower agreement so Tiwai's power bill goes down, whilst not letting that deal impact too heavily on the electricity prices around the rest of the country.
A "quick exit" from the electricity market would mean that other companies in New Zealand would not be saddled with the shortfall.
If Rio's August 31 exit happens, Labour's energy spokeswoman Megan Woods said Auckland alone would have to pay an extra $10-16 million a year, meaning people would pay higher power prices.
"We are avoiding the cliff of August next year," Woods said.
But both National and Labour's plans require Rio Tinto to agree to the terms, and keep the smelter open beyond August next year.
Woods said the main difference between the two parties' plans was "what comes next".
Labour's plans involve a Just Transition – a scheme that focuses on creating green jobs in the region which the Government will look to create over the next three to five years.
"It's no good just to say 'we're going to keep the smelter open for another five years and not have a plan for what comes next," Woods said.
National, meanwhile, want to keep the plant alive and give it an upgrade.
"Technology upgrades to the smelter could see up to 200MW of electricity available to the grid as dry-year cover."
"We will look to partner with Rio Tinto on the installation of those upgrades," its policy said.
Tiwai Point has been a large pillar of New Zealand First's campaign so far as well.
But unlike National and Labour, NZ First has yet to release its Tiwai Point policy.
Instead, Peters has spoken about the issue in a speech.
He promised that if New Zealand First was around the Cabinet table after the election, its ministers would "commit to a 20-year agreement with a 10-year review, with a fair electricity cost based on the cost of supply and a respectable margin".
New Zealand First leader Winston Peters and NZ First MP Mark Patterson at the Save Tiwai public meeting at the Invercargill Workingmen's Club in July. Photo / Getty Images
That margin, he said, would be close to the original agreement of 10 per cent when the smelter first opened.
In the speech, he was not sympathetic to Labour's plans of a Just Transition in the region.
In her press conference today, Labour leader Jacinda Ardern said the Government didn't go ahead with a plan because it could not get consensus around the Cabinet table.
"NZ First did take a different view about the future of the smelter than the one we have taken today."
The Greens do not have an official Tiwai policy.
Act has said: "The Government should legislate that a transmission line is consented between Manapouri and Tiwai.
"It is not going to build it, but Transpower will have to give NZAS a discount on transmission. This manoeuvre could make the smelter viable.
