Fonterra plants feed into the grid

By LIAM DANN

Fonterra is making money out of the power crisis.

As other industries struggle to cope with price spikes and possible blackouts, the dairy giant is quietly profiting as its generators feed power back into the national grid.

Fonterra has seven generation plants at sites around the country with a total generation capacity of 163 megawatts (MW), powered by gas, diesel and coal.

By comparison, New Zealand's largest thermal power station at Huntly has a capacity of 1000MW.

Fonterra has joint ventures with Genesis, Todd Energy and Contact.

The power companies own or co-own and operate the generators on Fonterra sites.

Fonterra is still a net power user on an annual basis but is benefiting because its off-season coincides with the high demand winter months.

The company is considering increasing its power generation to full capacity because of the crisis.

It could turn on three small power plants - in Te Awamutu, Waitoa and Edendale - which it owns outright. That would put a further 15MW into the national grid.

"Normally we wouldn't even consider it," director of operations Max Parkin said.

Fonterra has some exposure to spot prices. Normally any revenue from power exports is used to offset those costs. This winter the equation looks better than usual.

"Over the next three months we'll be exporting more into the grid than we use," Parkin said.

He would not say how much the company was earning from electricity sales.

It was not huge when compared with Fonterra's billion dollar operational budget, he said.

If all its farmer members were included, Fonterra was now the second largest power user in the country (after Comalco), he said.

It uses 1500 gigawatts of power, 5 per cent of the total supply.

A power saving regime has been put in place at all factories and is being promoted with farmers.

Fonterra's largest plant was built at Whareroa, at Hawera, in 1996. It generates 68MW and is jointly owned with Todd Energy.