Latest / Early Edition with Ryan Bridge / John Carnegie: Energy Resources Aotearoa CEO on the Government's proposed LNG import facility

Transcript

John Carnegie: Energy Resources Aotearoa CEO on the Government's proposed LNG import facility · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Government's given the all clear to build an Alingy import facility.
• 0:03
  Speaker 1: This is to help with energy security and the dry years.
• 0:05
  Speaker 1: It will cost north of a billion dollars hopefully be
• 0:08
  Speaker 1: set up in Taaramaki by next year or early twenty
• 0:11
  Speaker 1: twenty eight. John Carnegie is Energy Resources alte at Chieved
• 0:14
  Speaker 1: Executive with me this morning. John.
• 0:15
  Speaker 2: Good morning, Yes, good morning. Your thoughts on that, Oh, well, look,
• 0:19
  Speaker 2: we think it's a necessary dry year insurance policy. That's
• 0:22
  Speaker 2: required because New Zealand actually faces a massive fuel shortage
• 0:27
  Speaker 2: with lawer than anticipated domestic guest supply and the constant
• 0:31
  Speaker 2: risk of dry years.
• 0:34
  Speaker 1: Is the aling terminal the right call, though, because that
• 0:37
  Speaker 1: Frontier Economics report last year said it could be basically
• 0:40
  Speaker 1: a white elephant. You's been a billion bucks on this thing,
• 0:43
  Speaker 1: and then what do you do with it after?
• 0:46
  Speaker 2: Oh look, there's obviously a large upfront infrastructure costs of this,
• 0:50
  Speaker 2: but officials have assured us all that this is going
• 0:55
  Speaker 2: to be more than offset by the downward pressure on
• 0:58
  Speaker 2: future wholesale electricity prices and are reduced and will reduce
• 1:03
  Speaker 2: the risk premium in our years. So what this investment
• 1:07
  Speaker 2: will effectively do is take the heat out of the
• 1:10
  Speaker 2: electricity market and lower peak prices compared to those without
• 1:14
  Speaker 2: the investment. And of course this is great news for
• 1:17
  Speaker 2: anyone who cares about our major industrials, our energy intensive industries,
• 1:21
  Speaker 2: which will benefit from both moderated future electricity prices in
• 1:26
  Speaker 2: dry years and the potential availability of freed up domestic
• 1:29
  Speaker 2: domestic natural gas.
• 1:31
  Speaker 1: Will this stop the do you think will stop the
• 1:34
  Speaker 1: closures the plant closures?
• 1:37
  Speaker 2: Well, it will certainly contribute to doing that. You know,
• 1:41
  Speaker 2: It's certainly not a silver bullet, but that's it will
• 1:46
  Speaker 2: take some stress off while we work to bring more
• 1:49
  Speaker 2: domestic gas online in a medium term. And I think
• 1:53
  Speaker 2: what we know is that New Zealand's energy system will
• 1:57
  Speaker 2: be at its most effective when renewable generation, infirming fuels
• 2:02
  Speaker 2: like allergy and domestic natural guests actually work in harmony.
• 2:06
  Speaker 2: And we need to stop having binary good versus bad conversations.
• 2:10
  Speaker 2: All fuel options need to be on the table.
• 2:12
  Speaker 1: John, Why don't your members pay for stuff like this?
• 2:16
  Speaker 1: Why do we users have to pay a levy?
• 2:20
  Speaker 2: Yeah? Well, I mean I think the key thing is
• 2:23
  Speaker 2: that it's the reason the crown has a role. Here
• 2:27
  Speaker 2: is an acknowledgment due to the absence of cross party
• 2:31
  Speaker 2: support that this vital investment wouldn't actually proceed without the
• 2:36
  Speaker 2: Crown taking a position to secure it. So, you know,
• 2:40
  Speaker 2: it's just a recognition that the market risk of an
• 2:45
  Speaker 2: investor to come in an invest a billion dollars with
• 2:48
  Speaker 2: the prospect that, however, many years later, it might become
• 2:52
  Speaker 2: a white elephant due to government policy settings just predicates
• 2:58
  Speaker 2: the need for the ground to be involved.
• 3:00
  Speaker 1: But won't it So you're say, if because our politicians
• 3:02
  Speaker 1: can't agree on stuff, we're having to pay for.
• 3:05
  Speaker 2: It, well we'd have to pay for it anyway in
• 3:09
  Speaker 2: all likelihood with our declining supply of domestic gas. And
• 3:14
  Speaker 2: what this what the Crown's involvement is just to bring it,
• 3:20
  Speaker 2: to bring it forward, to provide the investor, with the
• 3:23
  Speaker 2: eventual investor with some comfort.
• 3:25
  Speaker 1: Is it not? Because does the government not have to
• 3:27
  Speaker 1: get involved? Because no private investor would do this, because
• 3:31
  Speaker 1: it will become a white elephant because our energy security
• 3:34
  Speaker 1: problem is a medium term not a long term one.
• 3:37
  Speaker 2: Oh well, lookly there are a lot of medicine butts
• 3:40
  Speaker 2: in their rhyme. As I said, I think what we
• 3:44
  Speaker 2: need system.
• 3:45
  Speaker 1: Jim, Can I ask you when as it stands, Yes,
• 3:49
  Speaker 1: I know that. But as it stands, how far do
• 3:51
  Speaker 1: we need to leap to to get you know, to
• 3:54
  Speaker 1: bridge this gap. How big is the gap? When will
• 3:56
  Speaker 1: we have enough energy security or do we just need
• 3:59
  Speaker 1: to keep adding and you know forever in the in
• 4:01
  Speaker 1: the day.
• 4:03
  Speaker 2: Well, I mean, the good news is that we're growing
• 4:07
  Speaker 2: our renewable base, but the issue with growing more renewables
• 4:11
  Speaker 2: such as wind and solar and batteries is that their
• 4:14
  Speaker 2: growth also by definition exacerbates the problem of being too
• 4:18
  Speaker 2: weather depend them. So actually, what we do need is
• 4:20
  Speaker 2: a reliable fuel and we will always need a reliable
• 4:24
  Speaker 2: fuel to fill the gaps which dostic natural gas previously filled.
• 4:30
  Speaker 2: And you know, eventually we will get other fuels, we
• 4:32
  Speaker 2: will get biomass and biomethane and all the alternatives, but
• 4:38
  Speaker 2: at the moment it falls to domestic natural gas and
• 4:45
  Speaker 2: dealing gen.
• 4:46
  Speaker 1: John, appreciate your time this morning, John Carnegie Energy Resources
• 4:49
  Speaker 1: out to our chief executive.
• 4:51
  Speaker 2: For more from Earlily Edition with Ryan Bridge.
• 4:53
  Speaker 1: Listen live to news Talks it be from five am weekdays,
• 4:57
  Speaker 1: or follow the podcast on iHeartRadio.