Latest / Early Edition with Ryan Bridge / John Harbord: Major Electricity Users' Group Chair on the proposed special economic zones

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John Harbord: Major Electricity Users' Group Chair on the proposed special economic zones · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Shange Jones pushing ahead with his desire to implement a
• 0:03
  Speaker 1: thing called special Economic Zones to boost electricity generation and
• 0:07
  Speaker 1: to secure fuel. Now the zones will create tailored regulation
• 0:12
  Speaker 1: policy and special access to financial support for those in
• 0:16
  Speaker 1: areas deemed desirable for generation. So John Harvard is the
• 0:21
  Speaker 1: chair of the Major Electricity Users Group, then joins who Now,
• 0:24
  Speaker 1: good warning to John?
• 0:25
  Speaker 2: Good morning.
• 0:26
  Speaker 1: So is Shane jones idea a good one? Will it
• 0:29
  Speaker 1: get more dams and wind farms built?
• 0:32
  Speaker 2: Look? It certainly would help. One of the big problems
• 0:34
  Speaker 2: we have in New Zealand is it's very hard to
• 0:36
  Speaker 2: build things, and there's no question that we need a
• 0:39
  Speaker 2: lot more generation built. It doesn't remove issues around sort
• 0:43
  Speaker 2: of access to finance potentially, and it doesn't change sort
• 0:47
  Speaker 2: of the fundamental dynamic we have in New Zealand that
• 0:49
  Speaker 2: our large generators tend to only build new generation when
• 0:53
  Speaker 2: the demand is already there for the new build. So
• 0:56
  Speaker 2: we always sort of lag behind a little bit in
• 0:58
  Speaker 2: terms of very electricity generation and that's one of the
• 1:00
  Speaker 2: reasons why prices stay high.
• 1:02
  Speaker 1: Do you think this might encourage more independent generators to
• 1:05
  Speaker 1: set up shop because we've got the big four gen tailors,
• 1:07
  Speaker 1: you know, and it's a bit like the supermarkets as well.
• 1:09
  Speaker 1: Would this actually create more competition.
• 1:12
  Speaker 2: Well, it'd be really interesting to see what the Minister
• 1:16
  Speaker 2: is thinking about in terms of access to finance. So
• 1:19
  Speaker 2: the big problem for independent generators is raising the capital
• 1:24
  Speaker 2: they need to actually build the generation, so they look
• 1:26
  Speaker 2: for a long term, large contract to underpin that investment.
• 1:32
  Speaker 2: The problem is most of the generation is wind and solar,
• 1:36
  Speaker 2: so it's intermittent generation because the wind doesn't blow all
• 1:39
  Speaker 2: the time and the sun doesn't shine all the time.
• 1:41
  Speaker 2: But our large users like as steel makers and our
• 1:44
  Speaker 2: your minium makers, they need a really constant supply of
• 1:48
  Speaker 2: electricity all the time. So what tends to happen is
• 1:52
  Speaker 2: the only sort of big players that the independent generators
• 1:55
  Speaker 2: can sell to are the big four gentators, So you
• 1:58
  Speaker 2: don't fundamentally change the dynam and if you're a gentailor,
• 2:02
  Speaker 2: you're a lot of building it yourself than buying it
• 2:04
  Speaker 2: off someone else. So there's a real challenge there for
• 2:07
  Speaker 2: the independence to actually enter the market. So if the
• 2:10
  Speaker 2: Minister's got some good ideas around access to capital and
• 2:13
  Speaker 2: making that easier, that could make a difference.
• 2:15
  Speaker 1: Yes, and when those people come into the market, and
• 2:18
  Speaker 1: this is advice for the gentailors as well. I mean,
• 2:20
  Speaker 1: what would you like them to be doing.
• 2:23
  Speaker 2: Obviously we'd like them to be building a lot more generation.
• 2:27
  Speaker 2: They are building more at the moment, but we need
• 2:30
  Speaker 2: a step change in a large order of magnitude. To
• 2:34
  Speaker 2: put it in sort of perspective, is you know some
• 2:36
  Speaker 2: of the wind farms and the solar farms that are
• 2:39
  Speaker 2: being built, you know they might be twenty or thirty
• 2:42
  Speaker 2: megawatts of electricity a year. Well, we use about forty
• 2:46
  Speaker 2: five million megawats of electricity a year, so it gives
• 2:50
  Speaker 2: you an idea of how much we need to increase generation.
• 2:53
  Speaker 1: All right, We're round about eighty two percent, and thank
• 2:55
  Speaker 1: you John Harvard for more from.
• 2:57
  Speaker 2: Early Edition with Ryan Bridge.
• 2:59
  Speaker 1: Listen live to News Talks. It'd be from five am weekdays,
• 3:03
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