Climate changes suit Comalco

By CHRIS DANIELS

Comalco's Tiwai Pt aluminium smelter, New Zealand's biggest electricity user, is slowly ramping up production, as rain falls xand power prices plunge.

The general manager of smelter operations, Tom Campbell, said production would be back up to 95 per cent of capacity within 10 days, after which the company would pause and reassess the situation.

One furnace a day was being brought back online, he said. About 93 per cent of the smelter was back into production.

Soaring prices on the wholesale or spot electricity market, due to low rainfall and lower gas reserves, prompted Comalco to cut back production by 10 per cent - the amount of electricity it bought on this market. It is back to buying 20 megawatts of electricity a day on the wholesale market, by restarting one furnace a day.



Campbell said there was a lot of work involved in restarting a furnace, which was dictating the rate at which capacity was being increased.

Comalco buys 542MW of power by contract. Such contracts - for much smaller customers than the smelter - have been rising in price recently.

A fixed-price index posted on an industry website shows an increase in the cost of electricity bought on fixed contracts.

Electricity at 7.73c a kilowatt hour is being offered in the Upper North Island for three-year terms. South Island power buyers are being asked to pay more than 9c a kilowatt hour for the same term.

In September last year, three-year contracts were being signed for as little as 5.5c a kilowatt hour.

The fixed-price-contract index is based on information voluntarily provided by power firms and could be based on only a small number of actual signed contracts.

But it does indicate that power prices for commercial and industrial users are heading up, to levels similar to tariffs paid by small, residential electricity consumers.

Residential consumers pay around 7c or 8c a kilowatt hour for their electricity, plus fixed charges from their retailer and local lines company.