The Madness of our broken Electricity Market
Electrification could save NZ $95 billion by 2040: report
New Zealand households could save as much as $95 billion dollars by 2040 if the country fully electrifies the economy, according to an international renewable energy advocate.
Dr Saul Griffith founded Rewiring America, and Rewiring Australia – and is in New Zealand presenting a report pushing the case that electrification is ultimately cheaper than using fossil fuels.
Dr Griffith and his co-authors, including the Reserve Bank chief economist Paul Conway, say there should be a systemic approach to adopting solutions like widespread rooftop solar uptake.
Tax incentives and Government finance would be tools to be used, but also addressing workforce change, and consenting.
Dr Griffiths’ ‘Investing in Tomorrow‘ report says New Zealanders are spending about $20 billion a year on imported fossil fuels but could save over four times that by swapping out fossil fuel burning cars and appliances – for electric equivalents.
His proposal comes at a time when the government is moving to accelerate the importation of liquified natural gas, to deal with an energy supply shortfall.
Dr Saul Griffiths, an engineer, is chief scientist at Rewiring Aotearoa.
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.
No to mention our doofus PM saying we have no gas because of the ban on issuing NEW permits. He didn’t bother to say that those still looking last found an economical source in 2002. The same people who buy his BS think Labour shut Marsden Point.
The so called electricity “market” has been a debacle from its inception in about 1998. It has delivered nothing but higher consumer prices, lower investment in infrastructure, destruction of institutional knowledge, and inadequate long-term planning.
What else could be expected from inserting a parasitic layer of demand for shareholder profit into an essential national utility.
It’s implementation caused me to write to Max Bradford around the time and tell him in colourful and no uncertain terms what an utter low life he and his idealogue colleagues were.
High power prices are hurting not just manufacturers, but councils too.
Wairoa District Council said its energy costs had gone up 40 percent in the past three months.
Mayor Craig Little told RNZ the town relied on electrical pumps to get water to residents, and the price increases had been scary.
“I think it’s hit everyone by surprise right across the country as with us. You try and predict it and you can’t get that one right – we’ve got pumps with massive electrical motors and it’s going to be huge for us,” he said.
https://www.rnz.co.nz/news/business/526771/council-s-energy-costs-up-40-percent-it-s-pretty-scary-across-the-country
Yes Max fixed it.
Couple weeks ago, the State porn tosser, waved with pride, this is oppertunity, as this barge sailed into the estuary of the South, now only to be land beached as this skipper and without doubt able sailors, had no knowledge of our coastal seas harbour!s and estuaries. What a karma message , tosser.
NZ is captured. The only way out is when the fiat based growth model crashes and burns. Think local, act local.
nationalize everything without compensation
simple as