Contact Energy has reached a long-term agreement with New Zealand Aluminium Smelter (NZAS) to supply renewable electricity to its Tiwai Point operation.
The agreement, which is subject to final regulatory approval, will see Contact directly providing 100 megawatts (MW) to NZAS from July 1 2024 until December 31 2024.
This will then increase to 120 MW from January 1 2025 for a minimum of 10 years, with the maximum term ending on December 31 2044.
In addition, Contact will supply an additional 25 MW to NZAS for the 2025 and 2026 calendar years to support the near-term production of high purity aluminium.
The price for this supply is said to be "materially higher" than the current transitional agreement and reflects its short-term nature and market conditions.
As part of the agreement, NZAS will also provide Contact with demand response of up to 46 MW to support New Zealand's security of supply.
Contact's strategic decisions and sales choices in the past four years were based on the belief that the Tiwai Point smelter would continue to operate long-term, according to Contact CEO Mike Fuge.
The company expects to receive final regulatory approval by the end of June 2024.
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