We are being scammed on power prices and our Political Leaders have failed us
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…
Shane Jones accuses big power companies of profiteering
…shut up Shane.
Bernard Hickey has the insight…
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 Lewis reported 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.
Quote of the day does have to go to Mark Ross, the chief executive of the Wood Processors and Manufacturers Association of NZ who is begging us to bail them out because they didn’t plan ahead to invest in renewables.
Unfuckingbelievable!
Meanwhile, this is the planet right now
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.
If you want to know who to blame read this.
https://norightturn.blogspot.com/2024/08/reaping-what-they-sowed.html
Good link realist. I did not read no right turn before posting my comment…have been pushing for re-nationalisation for years. We do not have to write long detailed posts on this, the facts and figures are out there for much of this.
Power infrastructure should be a basic national resource for all, but it is not. An example…in the Far North where I live there is a geothermal power station at Ngawha Springs, it has enough capacity to power the Far North, but–the power generated goes into the national grid because the local lines are not able to utilise it.
So when the deadly “Pylon power outage” happened recently we could not access the national grid to access that power.
The artificial power market created by National–bludging on hydro power built by previous generations and taxpayers–was always mere free market exploitation, based around price gouging. The gentailers have very little new infrastructure to show for all those years or even keeping up adequate maintenance.
And let’s not forget Rio Tinto and that accursed polluting smelter–using a huge amount of power at bargain basement prices and sending the profits offshore. They should be sent packing and the power allocated to the national grid.
Power generation and lines supply needs to be returned to full public ownership asap–without compensation if the retailers do not go quietly. Has anyone noticed that Masturbation Jones is only advocating for corporates and business, what about people that cannot afford to turn the heaters on and wrap up in blankets and hot water bottles? Fossil Gas is not the answer! The CoC vandals really do have a fundamentalist screw loose, Natzo politicians it seems were no more exempt from the online craziness than the rest of the population.
The aluminum from Rio Tinto gets top dollar as it is the greenest aluminum in the World .At the same time it gives 1000 plus great wages in jobs and service jobs.
The intended result of the Key government .Another National led disaster .Imagine what water will look like in 10 years .
GREED ON GREED More money for the elite and too bad for the rest of NZ as they dont donate to natactnz
Can someone more knowledgeable than me, do the calculation to work out the amount of generating capacity available from covering NZ home roofs with solar? Multiply the average roof area, by number of houses, by the amount of power that can be generated from rooftop solar. If the coalition came up with a fit for purpose mechanism for solar to be put on roofs nationwide, at no cost to the housholder, but paid for over time by the power generated, it would address the problematic lack of generating capacity, which is only going to get worse with population growth and the electric vehicle charger rollout, promised in the election. Perhaps all new builds could be 100% solar tile roofed. Surely the Greens would give cross party support to any such initiative?
Dick it would cost around 45 billion to fit every house in NZ with solar and a battery at 25k per house which is todays prices .But as we would be doing so many I would think we would get that down to 15 per house without too much trouble .l think the power companies would be unhappy that we all owned our own power generation .
The big boys would soon drop prices .
A battery would negate having to be fleeced by the sell to the grid price .
Hope that answers your question some what .
No doubt the negative nellies will be out in force .A couple of months ago in queensland they produced more solar than they needed .
This government obviously has the motto that a profit today is more important than having a decent environment to live in tomorrow. Your description of the power companies being a scam it totally correct since the market is set to ensure everyone gets paid the price of the most expensive producer there is no incentive to have a competitive market that allows consumers to have reliable affordable power. Bring back the NZED without the current idiots in charge would be a good first step.
A basic design failure in the construction of New Zealand’s hydro-electric system means that the hydro dams & lakes aren’t big enough to avoid or even mitigate the risk of a “dry year”.
The usual “on-the-cheap” mindset comes back to bite an ungrateful nation on it’s collective bum.
hENRY THOSE DAMS WERE BUILT WHEN WE HAD UNDER 3 MILLION POPULATION SO OF CAUSE THEY ARE NO LONGER BIG ENOUGH FOR 5 MILLION
The usual “on-the-cheap” mindset comes back to bite an ungrateful nation on it’s collective bum.
And yet you voted the hapless Willis in who wants Toyota ferries?
But doesn’t the free market & competition lead to better service & cheaper prices for the consumer? Kool-aid anyone?
Of course all the competion leads to better service. Twenty power companies competing to see who has the best call center for explaining more than twenty different “confuse them with prices” pricing schemes.
We are so spoilt with electricity choice. Do you want a pink website or green website with your electrons?
Just in case the elderly are too confused and can’t afford the additional cost of all that choice the power companies are given the ‘winter bailout energy payment’.
There are 3 big solar energy plants planned for Canterbury area and all are held up by environmental claims .I do not have enough knowledge to say if the claims are legitimate but just because it’s Green tech does not mean it is Green .The same applies to hydro.
Geothermal should be used more .Japanese technology means the depth drilled now is far greater than now
This eh!, Wai, Your, cone to a massive fuck up, that your cone ice cream melted, without a chance.
Distract, Electrical, fool cone heid, yer a goner.
Base, sell our market, we are market free corporations in a land open to profit opertune and invets what this place, down the end of our north end planet sp0-here, heaps of exploit wealth to invest, why , these people allow.
Dam we were talking about this in labour party as far back as 2010 that why the policy direction was geared towards value added or trying to move up the value chain within our current resources the problem is simple national always national
Some pointers from a professional engineer (me):
The Max Bradford semi privatisation was a stupid idea right from the start. This is a tiny country with a tiny population that didn’t warrant splitting up ECNZ. That said, I’ve done quite nicely with my Mercury shares, LOL.
With the exception of hydro and some geothermal, renewables aren’t really low cost producers. On paper they look good until we factor in the cost of grid stabilisation using batteries or pump storage. A key reason for the current high cost of electricity is reliance on the erratic supply from wind and solar, plus low lake levels.
The long term fix, assuming we rule out carbon emitters is either more hydro (there are some sites on the West Coast but good luck getting iwi to agree to that) or nuclear. A couple of SMRs could be up and running within 5 years if we didn’t fuck around with the consenting process, but good luck with that too!
You been proven wrong on too many occasions Andrew to be credible.
A self proclaimed engineer with Lego blocks is not legitimate.
Industry running short of power. Increase residential electricity demand by an additional 25% via recruiting a 1 million immigrants in a decade, there are predictable consequences. Its justs what happens when there is no economic plan (
or business plan for the nation.
correct the extra million is the cause of most of the problems at this time .Health system built for 3 million now expected to look after 5 million schools built for 3 million in the same boat and on it goes .roads ,water ,sewage ,housing the list just goes on and now we are headed for record unemployment in the near future .The silver lining maybe the record numbers being driven off shore by this usless government
As a guy who built windfarms in NSW , South Australia and California let me say no foreigner will invest in NZ renewables while you have delays under the RMA. It makes NZ comparatively unattractive. Except if you are a lawyer getting paid for hourly delays.