South Port CEO: Hydrogen could be ‘massive’ for Southland economy
The CEO of South Port believes a proposed hydrogen project could provide jobs, help decarbonise heavy industry, and enhance Southland’s economy.
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Nigel Gear is the chief executive of South Port New Zealand, a deep water port based in Bluff.
Gear says the Tiwai Point Aluminium Smelter represents a significant part of South Port’s business.
“Tiwai winding down has a large impact on our company. They’ve been a customer of ours for 50 years now, and they represent 31 per cent of our cargo throughput, as well as approximately 20 per cent of our profit after tax.
“We supply the marine activity to move the vessels into the Tiwai berth, and pack containers of aluminium ingot at Island Harbour in Bluff. These containers are then exported worldwide.
“Tiwai Point has 700 to 800 direct employees as well as 300-odd contractors on site at any time. They spend up to $40 or $50 million in the local community each year, as well as about $400 or $500 million nationally. That is a significant part of our economy in Southland,” says Gear.
Sustaining Southland’s economy
Gear says that with the proposed wind-down of Tiwai Point approaching, it’s important that conscious choices are made to continue supporting Southland’s economy.
“We’ve got a thriving economy in Southland, and Tiwai Point is a big part of that. The electricity generated in Manapōuri is all local generation, and we’ve got the established infrastructure for that electricity to stay in Southland. We also have excellent port infrastructure here that’s available for use.
“In addition to the infrastructure we have a skilled workforce that’s currently employed by Tiwai that could easily transition into a new industry. A lot of these employees are married and have kids, so their partners are employed locally and their kids go to schools here.
“These people have a massive impact on our local industry. Should the smelter wind down, that Tiwai workforce will be available for further employment in new industries.”
Swapping aluminium for hydrogen
Gear believes that the proposed hydrogen project could have huge benefits for Southland, but that his preference would be for Tiwai Point to continue producing aluminium as well as the new hydrogen project going ahead.
“We’ve got great wind resource in coastal Southland with a number of wind farms already consented and new sites being reviewed by other companies, so why not look at expanding and growing our economy rather than substituting one for the other or shrinking our economy by putting electricity back into the grid?
“There are two ways of looking at this potential development. The first is that Tiwai Point does close and a significant green hydrogen project opens. Or Tiwai stays and a smaller hydrogen project establishes and grows as the generation capacity in the South Island grows? We obviously prefer the second option.
“If we do have the Tiwai electricity becoming available for use in a new industry, this is a once-in-a-lifetime opportunity, and I think the country should be looking at doing something special with that resource.”
Decarbonising heavy industry
Gear says that South Port’s proximity to the proposed project, available wharf space, and the depth of the harbour mean that it could quickly be up and running as a hydrogen export partner.
“When you’re looking at the supply chain costs, South Port would be an important part of an efficient and affordable supply chain for a hydrogen operation.”
Gear believes that this development could play a unique role in decarbonising both shipping and heavy industry.
“A project like this in Southland would raise a lot of opportunities for R&D. We may find that multinationals would want to situate offices and facilities in Southland and see what they could do to decarbonise their own businesses, so it’s a wonderful opportunity in that regard.
“Once established, hydrogen fuel could be an opportunity to decarbonise our large forklift fleets, our cranes, and potentially our tugs. These are fleets that currently can’t be electrified - they’re too big, they need a lot of grunt, and hydrogen seems like the best solution for these types of machines going forward.”