It might not be all bad for the South - when the Tiwai Point aluminium smelter closes

Rio Tinto plans to wrap up its operations in Southland in August next year - causing around 2,600 job losses.

Energy Trusts of New Zealand's Alan Jenkins says as it's the country's biggest power user - it'll leave the grid with a surplus of 13 percent.

He says transmission costs are a big part of what drives prices up - so Southland should see cheaper power.

Jenkins says their local generators will have a lot more power to sell - and it's cheaper to sell it locally than send it all up North.