Concession scheme for South Island power

Press, 29 August 1979, Page 1

Concession scheme for South Island power

PA Wellington A new concessional electricity scheme designed for new South Island industrial developments has been announced. The Minister of Energy (Mr Birch) said yesterday that the scheme would attract those with plans that would require large amounts of power, particularly in production for export. Most electricity would be supplied under the scheme through local supply authorities, but

very large users might be supplied direct by the Electricity Division of the Ministry of Energy. The scheme would apply to big new developments whose electricity use would exceed 25 gigaWatthours a year, and provide for concessional tariffs negotiated individually. The Government had been approached by companies hoping to establish new joint-venture industries in the South Island and wanting electricity concessions to do so, Mr Birch said later.

He said the sort of industry the Government envisaged in establishing the new concession included forestry processing, mine-ral-resource projects such as fero-silicon, silicon carbide, and further Comalco development in Southland. Mr Birch said the scheme would use additional electricity generation of 2000 gigaWatthours a year that would be available in the South Island until 1994. Larger blocks of power

might be offered at concessional rates, negotiated individually, with regard to the national and regional benefits. The scheme was complementary to that announced this year for new and expanding South Island industries with an electricity demand up to 25 gigaWatt-hours a year. A gigaWatt-hour is equivalent to one million units. A unit is equal to 1000 watts, or one kiloWatt, used for an hour. Any development in which 25 gigaWatt-hours

of electricity was used each year would have to be extremely large. “That is a very high usage, not just a normal factory,” said the general manager of the Municipal Electricity Department (Mr J. H. Donald). He could not think of any plant in the M.E.D.’s area of this size. “It would have to be something like a steel smelter or a large paper mill.” The newly-announced concession was a “step in the right direction,” said the director of the Canter-

bury Manufacturers’ Association (Mr I. D. Howell). However, he was awaiting further details, particularly of how big the concessions would be. They would have to produce significant cuts in the price of power if they were to compete with costs in the North Island, which were up to 49 per cent lower. This was because the policy of many South Island supply authorities was to subsidise domestic users at the expense of industry.