DEUN wants Government to look to the Future

DEUN has labeled the $30 million subsidy to Tiwai Point as self-serving on the part of the present government.

“Globally, the aluminium industry is in trouble with the slump in prices since the global financial crisis”, says Sarah Free, secretary of the Domestic Energy Users Network (DEUN). “However, there is more to it than that; many shut downs are due to aging plant being replaced with larger plants using modern process technology. For example, Rio Tinto closed its UK plant last year and is closing its aluminum smelter in Quebec this November, while it has commissioned new plant in China. With low prices, old plant, and a large distance to markets, we can expect ongoing issues over the Tiwai Point smelter”.

“Why then should NZ taxpayers continue to prop up an industry that is very likely to have difficulties? Surely $30million could do quite a lot to bring new industries to the Southland economy while still allowing our power bills to decrease?” she said.

The Government’s response to Rio Tinto certainly has a lot to do with artificially supporting current electricity prices, and providing short-term market certainty to get the Meridian float underway. Bill English is reported as saying: "So in this case, it was about getting the deal completed and getting certainty for workers at the smelter, the wider electricity market. It does support the float of Meridian, and will give investors more certainty about what they are buying into.'’ Government appears to be oblivious to the fact that the majority of New Zealanders simply don’t want the State owned energy assets sold. Just 113, 000 investors bought shares in the retail offering of Mighty River Power, and 10% of the shares went to around 400 individuals. And with the share price languishing since the float, it could hardly be described as a success.

This should be a time when New Zealanders could get some relief from high electricity prices. Upgrades to the HVDC inter-island link mean electricity can flow readily between the North and South islands, so the advantages of cheaper electricity could be realized regardless of where you are in New Zealand. Government should be getting the best brains together to think about new industries that could be brought here. Additionally we could be looking to reduce our dependence on oil imports, continuing to retrofit insulation to existing houses, introducing initiatives for household to manage demand, taking advantage of new photovoltaic and wind technology, and exploring the potential for electric vehicles to make use of our abundant energy resources.

ENDS

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