Meridian / NZAS sign demand response agreement

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m e r i d i a n e n e r g y . c o . n z
Stock Exchange Listings NZX (MEL) ASX (MEZ)
5 April 2023
Meridian and NZAS enter into conditional demand
response agreement for 2023 and 2024

Meridian Energy Limited (Meridian) and New Zealand Aluminium Smelters Limited (NZAS) have
entered into a conditional agreement for NZAS to reduce its consumption of electricity at the Tiwai
Point smelter by up to 50MW and provide demand response flexibility during 2023 and 2024.
The agreement is conditional on receiving approval from the Electricity Authority under the ‘materially
large contract’ provisions recently introduced to the Code. Meridian will make an application to the
Authority for approval today. Under the Code the Authority has 45 business days to make a decision
on the application.
If approved by the Authority, the demand response agreement would give Meridian the ability to
require NZAS to reduce consumption by up to 50MW. This is likely to be valuable at times of hydro
shortage or when the electricity system is otherwise under stress, for example over winter peak
periods or when generation or transmission is on outage or not available.
Meridian Energy Chief Executive Neal Barclay welcomes the agreement.
“New Zealand needs to build more flexibility into its electricity market and we believe demand
response has an important role to play. We appreciate the work of the team at NZAS in making this
option available over the next two years.”
There are a number of separate tranches of demand response flexibility that Meridian can call
(ranging from 15MW to 50MW), with each tranche having different ramp-down and ramp-up
requirements. Meridian would pay NZAS a fixed price for each MW reduced by NZAS under the
demand response agreement.
Meridian and NZAS have also agreed to amend the smelter demand response provisions in the
current electricity agreement. Any MW of demand response provided by NZAS under the demand
response agreement will be deducted from the 250GWh reduction that NZAS would otherwise have
been required to provide in the event Meridian called a smelter demand response. In addition
Meridian and NZAS have agreed to delete from the current electricity agreement the ability for
Meridian to terminate that agreement in the event that NZAS’s consumption of electricity falls below
540MW for 3 months or more.

m e r i d i a n e n e r g y . c o . n z
PG 2

The demand response agreement terminates on 31 December 2024, the same date as the current
electricity agreement. Meridian and NZAS are in discussions about a possible new agreement that
would apply after that date. Those discussions are ongoing. A copy of the demand response
agreement and amendments to the current electricity agreement is available on Meridian’s website at
NZAS contract | Meridian Energy.

ENDS
Neal Barclay
Chief Executive
Meridian Energy Limited



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