Of course the electricity ‘market’ is broken, just like the Supermarkets, Housing and Banking industries are all ‘broken’
Electricity market concerns outlined in new campaign
A group of industry bodies and independent energy retailers have launched a new campaign calling for an overhaul of the energy market.
Of course the electricity ‘market’ is broken, just like the Supermarkets, Housing and Banking industries are all ‘broken’!
FFS people, I’m not looking for socialism, just basic regulated capitalism…
Big power companies paying large dividends at consumers’ expense – unions
Mercury more than doubles full-year profit
How high wholesale power prices could push up the cost of food
How are the gentailers milking us?
Why National of course!
John Key sold 49% of our Hydro Assets to create a $400million irrigation slush fund that was used to intensify dairy farming while polluting our water and generating climate changing gasses!
It also had the perverse impact of stopping investment into renewables as Russell Norman points out…
…the manner in which we are being scammed by the big power players and being failed by our Political leaders has manifested in our broken electricity market…
Electricity sector privatisation is destroying manufacturing industry
Energy crisis erupts after investment failure
Factories close & bosses plead for intervention as power prices explode
Wholesale electricity prices have spiked to more than eight times their long-run-average prices in the last week as a perfect storm of a dry winter, gas shortages and a decade-long failure by the big four gentailers to invest in renewable electricity generation converged to slam industrial power users. Manufacturers are now describing the prices and gas shortages as an ‘energy crisis’ and have called on the Government to intervene.
Waste paper and cardboard recycler Oji closed its Penrose plant yesterday at a cost of 75 jobs, while Winstone announced on Monday it would shut its pulp and paper mill at Ohakune, putting 300 out of work.
The New Zealand Manufacturing Alliance wrote to Energy Minister Simeon Brown last week to ask for a meeting this week to discuss intervention, Oliver Lewisreported this morning for BusinessDesk-$$$.
NZ wholesale electricity price (7-day moving average)
…and how did this all come about you ask dear reader?
Rather than ramping up renewable investment, especially of increasingly cheap solar and batteries, Energy & Transport Minister Simeon Brown says the Government is moving urgently to import more gas and build more gas-fired electricity generation. He blamed Labour for banning new exploration offshore for gas for the shortages, although there was $2 billion spent on offshore and onshore exploration using existing permits that didn’t increase gas supplies. The state-controlled gentailers, Meridian, Genesis and Mercury, also skimped on investing in new generation through already-consented wind farms and through grid-scale solar and batteries. That was to maximise dividends to Governments of both flavours over the last decade.
The Government is now scrambling to import Liquefied Natural Gas (LNG) supplies, which would require massive investment in port infrastructure to liquefy and transport the gas. Brown spoke in the General Debate in Parliament yesterday about the crisis and called for a bipartisan approach with Labour, after accusing Labour of causing the crisis.
Brown made no mention of ramping up solar and battery investments, which would be much faster and cheaper to install, and would improve the resilience of the rest of the electricity sector, especially of volatile wind and hydro generation.
Oh. And by the way. It wouldn’t produce higher emissions. Brown made no mention of the climate or emissions in his comments yesterday.
…surprise, surprise. National’s donor class are the polluters and they don’t want any investment in renewables.
Here’s the reality…
Power companies ‘failed’ to plan ahead – economist
Economist Geoff Bertram told RNZ that a key issue was that many electricity companies were too focussed on making money.
“What the big gentailers did for about a decade is sit on their hands, take out huge dividends and do very little investing. Their excuse was that demand wasn’t growing but in the process they just failed to look more than about a week or two ahead,” he said.
He added that it’s a historic issue.
“Through the 1990’s there was huge under investment and we got a crisis in 2001, then there was a decade where everyone was rushing in to invest, then they stopped investing after 2010 and biyearly 2020’s we had a crisis again.
“Now they’re all rushing to invest again.. this is a terrifically inefficient way to organise the provision of an infrastructure service,” said Bertram.
…the truth, as Greenpeace spell out, is that we don’t need gas!
Good News! New fossil gas NOT needed for energy security according to Govt report
Do we need more gas? No.
They’ve been lying to you about needing new fossil gas to “keep the lights on”. There is no shortage of gas.
In one of the most unreported good news stories of the year, the New Zealand Government Ministry of Business, Innovation and Employment (MBIE) recently released their updated report on Electricity Demand and Generation Scenarios looking out to 2050.
And the report confirmed that there is no need for new fossil fuels to keep the lights on. Wind and solar are the cheapest sources of new electricity generation.
The report concludes that while there will be a need for some peak electricity generators, to meet peak load on winter nights, these could be ‘green peakers’ such as utility scale batteries, green hydrogen generators, or forestry waste burnt in the Huntly thermal plant.
And this is a pretty conservative report from a pretty conservative Government Ministry – we can actually do a lot better than this if we have better policies.
Hence the energy security scare campaign being run by the current Government, to justify more fossil fuel exploration, is built on nonsense.
There is no shortage of fossil gas, there is a shortage of brains in the Beehive.
We need urgent investment into Electrification, not extending our addiction to gas and oil!
Fitch Ratings analysts warned NZ last month that the next 10 years of economic growth was dangerously stunted.
This matters because it is ratings analysts like Fitch who warn the market if we are good for all the money we borrowed.
They base that on future projections of our economic cycle and their analysis is terrible.
Fitch have made clear to us that Dairy, Tourism and exports to China have waned and can not grow beyond the manner in which we have already grown them…
He told BusinessDesk that Fitch sees the drivers of growth in the decade before Covid as having “run their course”.
In other words dairy, tourism and China export growth – while continuing to be large and core components of New Zealand’s economy – can’t possibly continue on the same dramatic growth curve they did before.
…John Key’s, ‘All our cows in one Beijing paddock’ has not only been geopolitically dangerous, it’s also run its economic course.
So what now?
This Government seem to think mining, gas and oil exploration alongside weakening regulations for donors will unlock NZs next economic cycle but it can’t and won’t…
The idea that we’ll mine our way to prosperity is one of those. It may well be an industry worth promoting, but betting the house (or more specifically our clean green reputation) on it being transformational is just silly.
We mined the big accessible gold deposits in 19th and 20th centuries. The odds of finding valuable rare metals like lithium are very low. It would be great if we did but if that’s this Government’s strategy, they might as well buy Lotto tickets.
Striking oil is also a long shot and the time frames involved to find it and get it out of the ground take us well past 2030 – the date by which the International Energy Agency has forecast the world will face a “staggering” glut.
If Kiwis ever wanted to be a rich oil-producing nation (and a large percentage don’t) we’ve missed that boat.
…if we are to play to our advantages, we need to play to the one that will provide the most impact to all of us.
Cheap, 100% renewable electricity!
This needs to be our focus and if Sam Stubbs recent ideas can generate this outcome they are worth looking at…
When we look at what gave New Zealand a competitive advantage in the 20th, cheap electric power is near the top of the list.
The dairy industry was built on the ability to turn liquid milk into powder more efficiently than our competitors.
The next wave of global economic growth will involve electricity and lots of it.
Artificial intelligence is incredibly power-hungry. One Chat-GPT search uses 10 times the power of a Google search.
Throw electrical vehicles on top of that and it becomes obvious – only countries with access to a cheap, stable power supply will have a competitive advantage in the years ahead.
There has been plenty of talk about the potential for New Zealand to be a world leader in data centres. To do that we’ll need more and ideally cheaper power.
Collectively, data centres will consume about 200 megawatts (MW) of electricity at peak usage – roughly the amount required to power some 200,000 homes. The average demand in Auckland is about 1700MW. That has been forecast to rise to 500MW of consumption over the next five years based on current plans.
…solar panels on every public building.
Local wind turbine generation.
Windfarms.
Electric public transport.
More Hydro.
Tidal generation investment.
This needs to be our way forward. Not more Dairy and more cheap basic exports to China and Tourism.
Cheap sustainable electricity is our competitive edge, we need to urgently focus on that now!
Shane is in the pocket of Mining, he is gaining Fast Track Power for his donors, not for NZ.
We need better ideas than the ones currently being pushed and our electricity market needs urgent reform at a time when a Government that only knows how to destroy is in power.
Increasingly having independent opinion in a mainstream media environment which mostly echo one another has become more important than ever, so if you value having an independent voice – please donate here.
The electricity market is not broken it is maximizing ROI to private companies as planned.
Max Bradford and National changed the nations original low cost electricity plan to a high cost plan.
Still as a consumer I get to choose which colour is on the computer screen when I choose which company I currently want to price gouge us as we try to keep warm.
Put solar on more homes that will supply local homes ,business and EVs .Cheap as chips to do and existing hydro becomes a massive battery backup for when the sun dont shine or the wind dont blow .Some parts of AUS have 30% solar and export power to other states during the day .
All that being said, the major, heh, circuit breaker, would be the return of power generation and supply to full public ownership. Any compensation paid only if the Gentailers piss off quietly.
Solar and the rest of the list is a no brainer for a sustainable, renewable electric energy future.
I’m with you. The Tiwai Point Smelter uses around 530 megawatts at a return to New Zealand of probably sfa taking into account the intermittent goverment largess to keep it going.
A population of 5 mill doesn’t have the scale to drive a competitive electricity market but does have the scale to prop up expensive corporate structures.
The shift from the state-run model to state-owned enterprises was largely responsible for the focus becoming making money.
Lower supply and higher demand results in higher prices. Facilitated by the market setup. Providing little incentive to invest in more generation.
Yes, partial privatization under Key exacerbated the problem.
Therefore, the solution is to remove the failed profit driven market model and return to the state-run model.
Seemores’ new bill will kill regulated capitalisms. And what happens if people cannot pay their water bill will their water be turned off like power has been disconnected. And what about the biggest users of water what are they going to be charged and how fair will this system be?
All these problems were there 6 years ago when Labour took over .For 3 of those years they had free reign to make bold moves . What did they do except destroy the gas exploration industry without ensuring there was a substitute ready to fill the gap.
Hahahahaha Trevor. So Key and Nationals mistakes are Labours fault for not fixing it.
That’s got to be the silliest thing I’ve seen in a long time.
Using your analogy, why isn’t the CoC fixing it now?
Chris three chins and Shane two bellies are doing a lot of damage
The unrealised basis of commerce in NZAO today is that gradually everything will be broken and those with money will pay to have what they want rebuilt – it’s called a market economy, and the people with money to spend are the market and can buy things and deserve them. And the people without money aren’t in the market, and must scurry around like Gollum and pick up crumbs. It’s the way of the modern world, my child. Wisdom of the financial gurus. Who are the same set as Homer’s supermarket guru.
https://www.youtube.com/watch?v=Qf3xwmXXDH8