The loss of jobs if the Tiwai Point aluminium smelter closes would be devastating for those affected and have an impact on the Southland and wider economy.
However, in crisis there is almost always opportunity and energy consultant Wayne Cartwright sees one in the excess power that would be available.
An energy consultant says if the Tiwai Point aluminium smelter is closed and the Manapouri hydro lake is made available it would be a huge boon for the country.
The plant is under threat of closure because its owners say the price they pay for electricity is too high and the operation is not economic.
Wayne Cartwright says worldwide demand for energy will rise substantially over the next few years and with some investment from the Government, power from Manapouri could be siphoned to the national grid.
He says if that happens the price of energy won’t soar as much in New Zealand as it could around the world.
“We’re looking at a substantial rise in global prices of energy, particularly oil and gas, and if the substitution of hydro electricity for those requirements in New Zealand that need at the present time oil-based energy … can be made then this will be a great advantage to New Zealand because of the lower cost. . .
Most of the excess power would be in the south of the South Island which isn’t necessarily where the demand would be but upgrading the transmission lines to cope with the excess supply would be expensive. Instead of shifting the power north, it would be cheaper and could be more attractive for some businesses to move south.
The mnemonic love many fat royal people today has kept the six factors which determine the location of industry in my memory since 6th form geography – labour, market, finance, raw materials, power and transport.
If the smelter closes there will be excess labour and power in Southland. Finance is mobile, there’s a good port and reasonable roads in Southland. If whatever is produced is exported, nowhere in New Zealand will be much further from the market than anywhere else.
The possible closure of the smelter could be regarded as a crisis but it also has the potential opportunity for new businesses which could be better for Southland and New Zealand.