Basslink repair: Norske Skog paper mill says it will reduce power use if asked, with no impact on jobs

Monday, Feb 29, 2016

Like all of the state's major industrials, Norske Skog is making contingency plans with Hydro Tasmania to reduce consumption should the energy crisis deepen further.

Tasmania is facing an unprecedented energy situation with dams approaching record lows and the undersea Basslink cable still out of action.

About 60 per cent of the state's electricity is used by five industrials: Bell Bay Aluminium, Nyrstar, Norske Skog, Temco and Savage River mine.

Norske Skog general manager Rod Bender said if it was required, the paper mill would shut down half of its machinery.

"It's likely if we were to participate in the contingency planning, and all of the discussions we've had since early January have involved the closure of one machine on site for a period, we would probably turn it off for a number of days, a portion of a month," he said.

The mill has two machines and two pulp mills — one of each would be shut down, if required.

Mr Bender said the important thing would be to try and reduce consumption around contracts.

"Once we've taken an order, our customers really do expect that we deliver, so it's trying to balance the forward orders that we take both domestically in Australia and also in Asia and overseas with our position in the contingency planning," he added.

But he said "we'd turn it off for as long as possible to contribute to the needed load reduction".

The mill employs 300 people and contributes about $180 million to the Tasmanian economy each year.

Smaller industrials will be hit: unions

Steve Walsh from Unions Tasmania was worried the core business of all other industrials would also be hit, affecting jobs.

"Clearly, the major industrials that we do have left in this state would all be forced to reduce production, and that would directly impact on the workers the union represent," he said.

Norske Skog promised jobs would not be on the line.

"Their workers operate over 24/7 and their leave is rostered during the course of the year, so they would be forced to take leave immediately and that would create a lot of disruption in their families," Mr Walsh said.

Energy Minister Matthew Groom said Tasmania's energy problem was a "fluid situation".

"The state can't control the timing of the repair of the cable, we can't control the rain, but what we can do is control contingencies," he said.

Hydro Tasmania has spent $44 million securing 200 diesel generators and the Government said it may need to expand gas generation at the Tamar Valley Power station if Basslink was not repaired by May.

Greens leader Cassy O'Connor said as well as being costly, the diesel use would increase the state's emissions.

"Over the next three months we'll be burning over $100 million worth of diesel, including the installation, to make something like aluminium," she said.

"Now that is not sustainable, it's extremely expensive and its filthy, dirty power."

The owners of the Basslink cable expected it would be operational by mid-year, despite still not being able to pinpoint the exact location of the fault two months after it failed.


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