NZAS Continues To Support Demand Response Flexibility In The NZ Electricity System

New Zealand’s Aluminium Smelter (NZAS) will continue to play a positive role in New Zealand’s energy system with the conditional agreement between NZAS and Meridian Energy to provide demand response flexibility during 2023 and 2024.

“We are proud to contribute to greater security across the electricity system by reducing our demand at times when the system is under stress,” NZAS Chief Executive Chris Blenkiron said.

“NZAS has reduced consumption in eight out of the last ten years and will continue to do so to ensure there is a reliable supply of electricity for New Zealanders when they need it most.

“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,” Mr Blenkiron said.

If approved by the Electricity Authority, the demand response agreement would give Meridian the ability to require NZAS to reduce consumption by up to 50MW.

There are several separate tranches of demand response flexibility that Meridian can call ranging from 15MW to 50MW, with each tranche having different ramp-down and ramp-up requirements.

Meridian and NZAS have also agreed to amend the smelter demand response provisions in the current electricity agreement. Any MW of demand response provided by NZAS under the demand response agreement will be deducted from the 250GWh reduction that NZAS would otherwise have been required to provide in the event Meridian called a smelter demand response.

In addition Meridian and NZAS have agreed to delete from the current electricity agreement the ability for Meridian to terminate that agreement in the event that NZAS’s consumption of electricity falls below 540MW for 3 months or more.

The demand response agreement terminates on 31 December 2024, the same date as the current electricity agreement. Meridian and NZAS are in discussions about a possible new agreement that would apply after that date. Those discussions are ongoing.

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