A good energy policy is a good climate policy

Germany’s government shut down its last operating nuclear plant at the weekend.  

Simultaneously, major utility EON announced a 45% increase in the price of electricity.  Some German consumers will pay NZ$0.87 per kilowatt-hour.

And a day or so later, fellow-EU member Finland started regular output at  Olkiluoto 3, Europe’s newest and largest nuclear reactor.  

Continue reading “A good energy policy is a good climate policy”

Wettest July-to-March creates  delight in boardroom of big electricity generator

Tourists  through  the North Island in the past summer  may not have enjoyed the  wet weather much but  for the  big electricity generator Mercury—which operates  the hydro system on the Waikato river—it was close to heaven.

Mercury headed its report on the  third quarter  “ STILL WET, WET, WET!”.

It was, they said, the wettest July to March period ever. Q3 hydro generation was up 367GWh on the  previous corresponding period.

As well, the company reported connction growth across all products, with total connections lifting 11,000 in Q3.

 It  noted that electricity futures prices remain elevated at around $170/MWh out to CY26.

Inflows into the Waikato catchment remained very high for the quarter on the back of Cyclone Hale and the tropical atmospheric river experienced over Auckland Anniversary weekend. This continued a trend of very wet conditions since the start of the financial year, with the inflow sequence since 1 July 2022 remaining the wettest on record. Hydro generation was 1,220GWh for the three months ended 31 March 2023, up 367GWh (43%) on the previous comparable period, reflecting the high inflows.

Continue reading “Wettest July-to-March creates  delight in boardroom of big electricity generator”

It’s not easy being Green

Fancy that, Germany has co-governance too. But they do things differently over there.

Can you imagine a government made up of ACT, Labour and Greens?  As a fresh replacement for an eternal National – Labour coalition?  Welcome to Berlin.

But some things always stay the same. The Greens have a problem understanding power and compromise.

Continue reading “It’s not easy being Green”

Big electricity company lands contract with US tech giant Amazon to power up Auckland data centres

One  of New Zealand’s  big electricity  companies, Mercury, has landed  a  power contract with US tech multinational  Amazon, whose business interests include e-commerce, cloud computing, digital streaming, and artificial intelligence.

The long-term corporate Power Purchase Agreement with Amazon  is for renewable energy for their Auckland data centres, planned for launch in 2024.

 Amazon will purchase around half the real time output of Turitea South (the southern section of Mercury’s Turitea wind farm) for an agreed price. Turitea South is 103 megawatt (MW) and expected to produce 370 gigawatt hours (GWh) per annum. The financial terms of the deal are confidential.

The renewable energy from Turitea South, NZ’s  biggest wind farm, will be used to support Amazon Web Services’s (AWS) data centres in Auckland, when they launch in 2024.

 Mercury says it has a strong pipeline of renewable development, but now having a guaranteed consumer buying a significant amount of Turitea South’s generation means it is  well placed to continue developing renewable projects at pace.

“In addition to shifting the dial on decarbonisation at home with the development of the Turitea wind farm, this agreement means we’re also supporting a major global company with their decarbonisation goals,” said  Mercury CEO Vince Hawksworth.

“We’re committed to delivering on our strong pipeline of new renewable generation and arrangements like this will help us get there faster. It’s great to welcome AWS’s data centres to New Zealand”.

 A power purchase agreement (PPA) is an electricity supply agreement, where a price is agreed for a period of supply. For the gennerator and the customer, the agreed price avoids the volatility risk of buying and selling on the wholesale energy market, where the price moves around depending on current and forecast supply and demand.

Mercury itself  has  been expanding  its business . It has a significantly larger retail business, primarily due to completion of the Trustpower retail acquisition in May 2022.It also acquired the outstanding shares in the broadband company NOW NZ in December 2022.

It added 440,000 more connections from those two transactions alone.

Commissioning of the 103MW Turitea South wind farm is  due to begin this month: the company  said  earlier this year completion was taking longer than expected due to construction and delivery challenges.

“Once complete, Turitea will be New Zealand’s largest wind farm and materially shifts the dial on  decarbonisation ambitions. That’s a win not just for Mercury, but for the Manawatū region and New Zealand as a whole,”  the company   said then.

While operating earnings (EBITDAF) were up $223m to $451m for the  6 months ended December 31 net profit was down $197m to $230m with the previous period including the one-off net gain made from the sale of Mercury’s shareholding in Tilt Renewables when Mercury acquired Tilt’s NZ operations in August 2021. The early exit of a long-term hedge with Norske Skog in HY2022, which reduced revenue by $65m in that period, also contributed to to the lift in EBITDAF in HY2023.

Genesis’ go-ahead for big solar farm in Canterbury has wider significance than just heating 10,000 homes

One  of New Zealand’s biggest electricity  generators, Genesis Energy, has given the go-ahead for a large solar farm near Lauriston on the Canterbury Plains, an hour’s drive south of Christchurch.

It is part  of Genesis’ strategy of replacing thermal baseload  with renewable generation – a mix of wind and solar.  What it calls its Future-gen strategy will result in the removal of 1.8m tonnes of carbon emissions a year by 2030.

This underlines that  NZ is better placed than most countries not only to be energy independent, but also for nearly all its electricity to be renewable.

Genesis’ analysis of future market scenarios show that by 2030, the existing pipeline of projects will lift NZ from about 85% renewable electricity generation to 96-98% – a remarkable achievement of investment, risk, planning, logistics and flexibility. It is something  critics of the industry  overlook when they call  for the State to re-nationalise the big  generators, to  lower electricity prices to  consumers. Continue reading “Genesis’ go-ahead for big solar farm in Canterbury has wider significance than just heating 10,000 homes”

Mercury Energy’s hydro power generation has been boosted by a wet half-year

They called it an “atmospheric  river”, the weather bombardment which hit  NZ’s northern region at the weekend. It exacted a  terrible toll on  metropolitan  Auckland and the rest of the region.

Few living there may have noted a statement from electricity generator Mercury Energy labelled “WET, WET, WET!” This was to emphasise the impact of  what the company said had  been “the wettest first half-year ever”. Mercury operates the chain of hydro-electricity stations on the Waikato river.

More prosaically, the company said  hydro generation  in the second quarter  of this financial year was 38% higher than in the corresponding quarter in the previous year. Continue reading “Mercury Energy’s hydro power generation has been boosted by a wet half-year”

Government wants to make the Fuels Sector more resilient — but will this do it?

Having done nothing as the oil majors closed down the Marsden Point refinery, the Ardern government is now belatedly moving into the  market to ensure what it  calls  “supply  resilience”.

Energy and  Resources Minister Megan Woods says  she  wants “to strengthen NZ’s fuel sector” through a suite of initiatives to encourage more competition.

She doesn’t say why suddenly there should be a  need for more competition, but implicitly there is  criticism of the big petroleum companies for their high prices – as if  government taxation wasn’t taking  more out of motorists’ wallets than the actual cost of the petrol.

It’s  rather like  the Prime Minister saying bank profits are too high, while ignoring the government’s action in printing  money during the Covid pandemic to ensure so much cash sloshing around waiting to be banked.

Continue reading “Government wants to make the Fuels Sector more resilient — but will this do it?”

Shipping coals to Newcastle? No, it is being shipped to NZ – increasingly – while the govt funds those who switch to renewables

We were rewarded – on visiting Kiwiblog today – by finding this chart from The Facts, which shows how coal imports into this country have almost quadrupled under Labour.

David Farrar muses:

Maybe banning new natural gas exploration was a bad idea?

One reader, in comments below the Kiwiblog post, wants the PM to explain how it is better for the environment and our balance of payments (in deficit) to import nearly 2m tonnes of coal.  

Another reader ventures that most of this import will be for Huntly (and other similar furnaces).

As I understand it, Huntly was built to run on gas and/or powdered coal. NZ coal doesn’t powder in that way – it can’t go into a furnace designed for gas. Hence the Indonesian coal.

The correct answer is to burn gas in it. It’s NZ gas, and it’s better for the environment than coal. Win-win. But that takes us directly back to the question of why we have less NZ gas than we used to, and why we now run Huntly on coal.

But hey – the government is doing its best to shake coal out of our energy-producing systems.  Continue reading “Shipping coals to Newcastle? No, it is being shipped to NZ – increasingly – while the govt funds those who switch to renewables”

BCG report throws light on how we might avoid the power-price shocks that Aussies are facing

Retail electricity prices in Australia are expected to rise by 50%  over the next two years, with  Federal Treasurer Jim Chalmers said to be weighing up market intervention to stop those costs spiralling further.

The  Australian Treasury has assumed in the federal budget  presented  in Canberra  last  night that retail power prices will increase by an average of 20% nationally in late 2022 and a further 30% in 2023/24.

These  startling  rises  stem  from  Australia’s  drive  to  decarbonise  its  electricity  supplies. After  enjoying  a long  run of  cheap  electricity, Australian consumers  are  now  facing  what  will be  a  severe attack  on  household  budgets.

By  comparison,  with  80%  of our  electricity  already  coming  from  renewable  sources, New Zealand may escape  such  rises. Continue reading “BCG report throws light on how we might avoid the power-price shocks that Aussies are facing”

Orban et urbi

Hungary’s PM Viktor Orban doesn’t get a great press – at least outside Hungary where it’s harder to arrange.

So broadminded diversity connoisseurs might profit from a recent speech at the Bálványos Free Summer University and Student Camp (a ‘large-scale intellectual workshop of the Carpathian Basin’ apparently).

It reads both well and revealingly; logically constructed and strategically coherent; its premises stated and conclusions drawn.  Perhaps he could give Zoom lessons to more gushy and less focused global peers.

Continue reading “Orban et urbi”