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Thursday, August 20, 2020, 3:18 PM Press Release: First Gas

Paul Godevy, CEO of gas grid operator Firstgas, thinks leaving the Tiwai smelter leaves a gap that can be bridged by the nascent hydrogen industry.

The end of the smelter at Tiwai Point is a large scale earthquake for the New Zealand industry and energy sector.

This aluminum egg in our industry basket uses about 12 percent of New Zealand’s electricity. It produces nearly $ 1 billion annually in exports from the purest grade of aluminum, made with the greenest energy. It employs around 800 people and indirectly supports over 3000 jobs.

Smelting hot action; 570 MW of electricity is sent from the Manaburi Hydropower Station to Tiwai Point by two 220 kV dual-circuit transmission lines. It’s enough electricity for 680,000 homes.

Manaburi was built alongside the smelter in 1971. The couple reminds us of a period the government had been thinking heavily about.

Our national aspirations have changed since then, but sometimes big commitments are still needed. In Christchurch, we have rebuilt the entire CBD. In Auckland, we are renewing bus and rail infrastructure and investigating port transportation. In New Plymouth, where I live, we are moving to new forms of energy after we finish offshore oil and gas exploration.

Now there’s Covid-19. The scale of the recovery required to overcome the impact of the pandemic has encouraged us to consider projects that will help position our economy for a greener future. Coincidentally, it is at this moment that smelter land and dedicated supplies of carbon-free electricity are available.

There is currently no realistic alternative use for Manaburi power – upgrading transmission lines would cost hundreds of millions to move power north.

I know one industry can replace smelter – on the right scale and with global environmental benefits.

This industry is hydrogen.

Hydrogen can be made by electrolysis, using electricity to split water molecules. The main challenge is the cost and amount of electricity required. Tiwai and Manapouri can take on this challenge.

Hydrogen gas can be used to power industrial heating units, generators, vehicles, and even appliances in the home. Firstgas has a hydrogen grill at our base in New Plymouth and Hyundai has shown hydrogen-powered cars here as well.

It is a green fuel because it turns into water when it burns. There are no emissions.

Japan and Korea have committed to using hydrogen to cut their emissions. The Tokyo Olympics will use hydrogen to fuel the Olympic flame and the athletes’ village. These Asian countries are huge energy importers and are already paying high prices for hydrogen.

Southland hydrogen production can be a high-value source for export. Decarbonizing heating can also be used on the South Island, such as that used in dairies to dry milk, which is currently fueled by burning coal.

The hydrogen industry is not a far fetched dream. It is actually produced and used in New Zealand in small quantities. Furthermore, we are planning the ecosystem necessary to make the entire industry operable and commercially viable, including a pilot program for hydrogen delivery via our existing pipelines.

People say they want hydrogen. But they are concerned about whether enough will be generated, whether the required infrastructure will be built, and whether others will convert to hydrogen.

This ambiguity can be resolved through government intervention.

Governments are not afraid to comply. Last week the government announced a $ 30 million investigation into pumping water into Lake Onslou. The project will cost $ 4 billion to complete and will take us to the government’s goal for 100% renewable electricity. Electricity transmission costs will increase this number.

The energy sector is talking big. But such investments can only be repaid through energy prices. The problem is that nearly a quarter of the Kiwi population cannot afford to pay for their own power as it is.

Investing in a Tiwai can be the best value. We are not starting from scratch there, and the resulting product will be exportable, better suited to domestic industry, and an alternative source of energy. It will also create an “ecosystem” for its business; Maintain high-paying jobs and generate New Zealand export earnings.

The government does not need to pay for it. Instead, it could coordinate different players, perhaps by ensuring hydrogen sales or by offering incentives for New Zealand energy users to switch to hydrogen heat systems.

The hydrogen sector will not be ready to take over the smelter as of next year. But with careful planning and right focus, we can live up to 2022.

The departure of the fuse will leave a large gap. I think both opportunity and time call for replacing it with an industry that is equal in size but also equal to the needs of a carbon-free future and the public’s expectations about energy prices.

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