OCT 20: The main proposed Energy Plan for the next 15 years, outline by the Government only two months ago, will now have to be abandoned as a result of the confirmation yesterday that the Aramoana aluminium smelter will not be built.
The smelter would have required more than 3,000 gigawatt hours of electricity, and the Energy Plan proposed a development plan built round this need and the need to ensure continuity of supply in low rainfall areas.
The Minister of Energy, the Hon W. F. Birch, confirmed to the Daily Times yesterday that this option will not now go ahead.
So far as Otago is concerned the "smelter option" required the Luggate dam to be commissioned early in 1989, the Queensberry dam early in 1990, the Kawarau Gorge dam and the first of a series of dams on the Lower Waitaki by early 1992.
The plan proposed a capital expenditure on Otago dams estimated at $1,320 million.
ALTERNATIVES
It its place, Mr Birch said, will have to go a mix of two alternative proposals, one based on the South Island's hydro resource and one based on the North Island's coal resource.
"We will now have to reconsider the Upper Clutha situation and the power stations proposed in the North Island," Mr Birch said.
The South Island hydro resource alternative has Luggate delayed by three years, Queensberry delayed by four, Kawarau delayed by one year (and commissioned before Queensberry), and construction on the Waitaki dams started after Luggate, with first commissioning in early 1992.
But this option also includes an additional cable across Cook Strait to send surplus South Island hydro power to the North Island.
The North Island coal option plan has only one new South Island dam scheduled in the 15 year period - Luggate, to be commissioned early in 1995.
Capital expenditure on dams in Otago under the first option would be $1,680 million, while in the second option the estimate is $150 million.
After meetings in Parliament's executive offices yesterday, the South Pacific Aluminium Company and the Government announced they had mutually agreed to call off negotiations on the smelter proposal.
Mr Birch said a commitment to build the smelter has been deferred indefinitely, but existing contacts with the consortium will be maintained so that negotiations "can be picked up when world conditions are more encouraging". Mr Birch said he believes the smelter will eventually be built, "but not at this time."
The decision on the smelter will not effect progress on the construction of the Clyde high dam, the minister added.
Electricity from the dam will be required to meet other increases in demand for electricity in the late 1980s.
OPPOSITION VIEW
The Opposition spokesman on energy, Mr D. F. Caygill, said the Government must now turn its attention from Think Big to broader-based development.
The announcement threw "two awkward facts" into sharp relief.
Just three days before the 1981 general election the Prime Minister promised "Dunedin will get an aluminium smelter at Aramoana".
Of the Think Big projects, the smelter provided the second largest total of jobs - exceeded only by the combined total of New Zealand Steel's two-stage expansion.
Anti-smelter groups in Dunedin yesterday indicated they will turn their attention to ensuring Aramoana site is protected as a reserve for recreational land ecological qualities.