New Zealand has been facing some of the most challenging energy market conditions in over a decade, with simultaneous shortages in natural gas and hydro-electric generation. The consequence has been sustained high wholesale electricity prices, creating issues for electricity retailers without their own generating capacity, to the point where Electric Kiwi – for example – says it is turning to focus on the Australian market.
Some market-watchers contend the problems trace back to the decision of the Ardern government to ban any further offshore exploration for oil and gas. That drove away not only oil exploration companies but also the offshore rigs needed to complete planned drilling programmes.
Whether that is the case or not, some of the big generators like Contact Energy and Genesis are said by critics to be creaming it – but from their point of view, they are doing their utmost to meet the high demand for electricity. Their shareholders certainly should be happy with the healthy margins they are reporting while wholesale prices remain very high. Continue reading “How the govt’s ban on oil and gas exploration has tightened supplies – and resulted in NZ importing 2m tonnes of coal”