Energy markets: the more they change, the more they stay the same

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”

NZ has yet to announce climate-warming pledge for Glasgow summit but RBNZ is developing guidance for our finance sector

The clock is ticking on global warming, the  Dominion-Post  warned this  week ahead of  the Climate Change Summit in Glasgow. 

The  opening  paragraph  of  the  report  was  ominous: 

“Even after  countries — excluding NZ — unveiled  ambitious new  pledges  to  cut emissions,  it’s still  not  enough to achieve the global of 1.5 degrees  Celsius of climate warming,  a  new  report  found.”

The  article  points  out that NZ  has been  notably  absent   from the burst of  announcements that have been made, but  suggests we may  make our declaration in Glasgow.

It  argues that, as  a  small economy,  NZ’s nationally determined contributions (NDCs) will  not sway  the  dial  much.

But Green  co-leader  James Shaw,  who is  representing  NZ  at  the  conference, may  find anything he says is not  greeted  with applause.  NZ, like  Australia,  is  regarded  as  a  laggard  on  climate  change. Continue reading “NZ has yet to announce climate-warming pledge for Glasgow summit but RBNZ is developing guidance for our finance sector”

Emergency measures introduced in UK as energy bills soar – and NZ should brace for rising prices, too, thanks to exploration ban

Soaring energy  bills are a  problem for  firms,  households,  and  the  government. This  was  a  headline  in  The Economist last week – but it  can’t  happen here, can it?

After  all,  NZ has   plenty    of energy.  Unlike Europe, 80%  of  its electricity is  from renewable  sources. And  according  to oil industry  authorities, NZ is  surrounded  by a massive  continental  shelf — the fifth  largest in the  world, beneath  which  lie  vast  quantities  of  undiscovered  natural gas and, probably, some light oil.

So  surely  NZ  can face  the  future  with confidence?

Well,  no:  let’s not forget Prime Minister  Jacinda  Ardern had her “non-nuclear” moment and  placed a ban on new offshore exploration permits  for  oil  and  gas.  Since  then,  as  international oil explorers gave  up  their  offshore   exploration  licences, supplies  from existing  producing  wells have begun to  diminish for several reasons.

Higher  costs  are  starting  to  flow  into  household and  business  gas  bills. Vector  is  increasing  Ongas LPG  cylinders  from  $115.026  to  $125.82. Continue reading “Emergency measures introduced in UK as energy bills soar – and NZ should brace for rising prices, too, thanks to exploration ban”