Woodside and Fortescue are the final two parties bidding to...

Woodside and Fortescue are the final two parties bidding to build a large Hydrogen plant in South New Zealand.

https://www.southerngreenhydrogen.co.nz/articles/southland-hydrogen-moves-ahead-with-final-partner-selection

For those unaware of the situation, Meridian and Contact, two large power generators with significant Hydro generation in the South Island, are pushing for this hydrogen plant as a way to reduce electricity use in dry years when the hydro generation is low. The hydrogen plant will be ramped up and down as a buffer between generation and demand. The current strategy is for the country to burn coal and/or gas to fill this generation gap, as we did last year with much dismay.

The main alternative proposal is for the Government to build Lake Onslow, a huge pumped hydro system with more potential storage than all the existing hydro in NZ. The generators are against this as it will act to smooth out their revenue - bidding for cheap power when generation is high but importantly selling whenever power goes over a certain price and therefore capping those profitable peaks.

The hydrogen plant would also take up the load of the aluminium smelter currently in Southland but closing in the next few years, which has traditionally got extremely cheap power from Meridian. I expect the hydrogen plant would get a similar sweetheart deal, particularly if they are required to throttle production up and down according to the status of the hydro plants.