As consumers receive their winter power bills, many are puzzled and some are incensed that they are so high.
There is a simple answer: wholesale prices are elevated (they have been very high for some time and reached $215 a megawatt/hour last week).
And there’s a not-so-simple answer:
The latter relates to New Zealand’s complicated generating system which – to the casual observer looking at the power stations – inspires admiration at their construction, as for example on the Waikato river or at Benmore in the south.
NZ’s system generates more than 80 per cent of its power output from renewable sources, but under the Ardern government aims to get to 100 per cent to minimise carbon emissions.
As Australian consumers are finding out, however, closing down fossil fuel plants, and relying on renewable sources can send prices soaring and brings another set of headaches.
NZ has relied on the Huntly power station with its fossil-fuelled generators as a back-up to its renewable system, but as long ago as 2016 its operator, Genesis, signalled the coal-fired generators would be phased out by 2025. Continue reading “The lessons NZ can learn from Australia to guide energy policy and keep prices down”
This article has been contributed by CHRISTIAN NOVAK, who has undergraduate and postgraduate degrees in history from the University of Sydney. He currently works for a Wellington based communications company.
With the global economy already massively disrupted after two years of a global pandemic and now, high inflation, the Russia-Ukraine conflict demonstrates the need for sovereign governments to protect and manage their strategic assets – in this case, energy supply and the risks associated with them.
Amid soaring fuel prices and cost-of living pressures, the closure of our sole oil refinery at Marsden Point calls into question New Zealand’s approach to energy security. Considering the Government struck a deal with Rio Tinto to keep the Tiwai Point Aluminum Smelter open, it puts the spotlight on the government’s decision not to underwrite the refinery. This is because the smelter is not a ‘lifeline utility,’ as defined under New Zealand’s Civil Defence Emergency Management Act 2002.
Compare our policy on Marsden to Australia, which is subsidising its two oil refineries on both strategic and national security grounds. The question posed, therefore, is: how does our government view security of supply of a strategic resource?
Australia, like New Zealand, faced similar problems with its refineries – scale and distance, therefore cost. Continue reading “New Zealand’s management of its strategic assets: just right or in need of recalibration (and in learning from Canberrra)?”
New Zealanders are suffering a fresh bout of “pump pain”, as the price of petrol surges past the $3 mark. It has climbed 40c in the last four weeks.
The pump pain (as the NZ Herald calls it) brings a glow to climate change warriors, but not to Kiwis who use their cars to get to and from work every day. What makes that pain worse is the prospect that it won’t be eased any time soon.
International crude oil prices have risen steeply because of Russia’s war on the Ukraine, and are now above $NZ150 a barrel. The price of Brent crude jumped from $153 a barrel last Wednesday to $168 on Thursday.
For the motorist, the pain at the pump is compounded by the knowledge that more than half the cost, 52%, is creamed off by the government, supposedly for roading improvements. Continue reading “How pain at the pump is exacerbated by the govt’s imposts on petrol prices”
In what it sees as a pivotal year for the electricity sector and New Zealand’s climate agenda, Genesis Energy says there is significant investment in renewables being made, the Emissions Reduction Plan is due from government and Budget 2022 will allocate capital to the climate response.
Genesis believes it has a key role to play with agreements for wind and geothermal generation, expanding its portfolio into grid-scale solar, and continuing work to ensure back-up generation at Huntly supports the transition.
Reporting its half-year result (a 63% rise in net profit of $84.7m), Genesis said the result underlines the company’s momentum as it invests for future growth in new renewable generation and enhanced customer experiences.
Chief Executive Marc England said Genesis has delivered another strong result while building capability for the future. Continue reading “Genesis expects to play key role in wind and geothermal generation while expanding into grid-scale solar power”
Contact Energy, New Zealand’s largest power company, is also among its most enterprising. Currently it is building a 168MW geothermal plant at Tauhara as market demand for renewable energy strengthens.
The company reports its project to investigate the world’s first-large-scale green hydrogen plant in Southland with Meridian Energy is also progressing well, with potential development partners shortlisted.
Only last week PM Jacinda Ardern said developing a “shared plan with businesses and investors” to establish a new green hydrogen industry in NZ was one of the government’s primary economic development objectives.
Contact Energy’s shareholders could be understandably excited, therefore, when the company this week reported a 70% rise in net profit to $134m (from $78m in the corresponding half), just as CEO Mike Fuge said the company was excited about the role its renewable generation was set to play in the decarbonisation of the country over the next decade. Continue reading “Contact Energy shareholders get a positive jolt from company’s latest results and renewable power prospects”
Kwasi Kwarteng – Britain’s top business minister – is smart.
King’s Scholar at Eton; Double first from Cambridge; University Challenge winner; Kennedy Scholarship and a PhD in Economic History – from Cambridge. With prizes along the way.
Continue reading “Sometimes cleverness can’t get you out of a hole”
Just keep reminding yourself that things need to get worse before they get better.
Norway – a grand profiteer from blood carbon, according to the puritanical wing of the climate church – has come up with a very old and very bad answer to Europe’s energy price crisis.
According to the Times, the government is going to help pay Norwegians’ electricity bills:
“Each household is expected to save hundreds of pounds through state subsidies to cover half of power costs above a price floor over the coming months.”
Continue reading “Isn’t it good, Norwegian soot”
Insanity is doing the same thing over and over and expecting different results.
Which, with baroque variations, is the story from the UK domestic energy market.
As we’ve reported before, the market is suffering from the unfortunate conjunction of soaring input prices and a populist price cap. As suppliers collapse into the consumer-funded government safety net, the regulator is thrashing around trying to cobble together a fix which might avoid prices rising to their true level too fast, without offending voters or damaging long-term supply.
Continue reading “Energy markets: the more they change, the more they stay the same”
Tyrants prefer to move when their enemies are weak, divided or both. So no surprise to see Russia’s Vladimir Putin fresh from his triumph in coercing Moldova, to stirring up trouble in the Balkans, supporting Belarus’s migrant-based diplomacy, blackmailing the EU over energy supplies this winter, and ratcheting up the threat of military action against Ukraine.
Well, that’s the view from the London-based Daily Telegraph, which points out that Putin has been sending clear and consistent messages, (punctuated by use of force in Georgia, Crimea and Eastern Ukraine):
Continue reading “And trouble in the East as well …”
The world climate revival meeting in Glasgow ended with Alok Sharma (the UK’s minister to COP26, as well as the presiding chief priest) in tears over a last minute word change. The countries which have built more coal fired capacity, more quickly, than just about anyone else in history (that’s you China and India) would only agree to phase its use “down”, rather than “out”.
Despite the (quite literal) imprecations of hellfire, the only truly substantive outcome of the conference may be the Chinese government’s practical suggestion that the world should aim for a global temperature increase of 2°. (Bill Gates also chipped in some climate realism, noting that 1.5° was probably unachievable.)
Continue reading “It will be a good day when Judith Curry is better known than Greta Thunberg”