Latest / Best of Business / Jon Duffy and Alan McDonald: Consumer NZ CEO and EMA Head of Advocacy on the Government's plan to address energy sector issues

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Jon Duffy and Alan McDonald: Consumer NZ CEO and EMA Head of Advocacy on the Government's plan to address energy sector issues · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks. There'd be
• 0:12
  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
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  Speaker 2: Well, today's energy announcement has been labeled a damp squib week,
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  Speaker 2: not bold, tinkering, short sighted, a missed opportunity. In short,
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  Speaker 2: it's really hard to find anyone who really rates it.
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  Speaker 2: With their reaction. We have John Duffy, the CEO of
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  Speaker 2: Consumer New Zealand, and Alan McDonald, the head of advocacy
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  Speaker 2: for the Employers and Manufacturers Association.
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  Speaker 3: High lads, Hi, Hi John, Alan. Do you like it? No,
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  Speaker 3: it's thoroughly underwhelming. Really here the report, if it did anything,
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  Speaker 3: there's a lot of talk around consensus and bipartisanship. It
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  Speaker 3: probably united every part of the House in some part
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  Speaker 3: of the report they didn't like. So that's pretty underwhelming.
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  Speaker 2: Do you think it's going to stop the closure of
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  Speaker 2: the mills.
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  Speaker 3: No. I think it's too late for that, and there'll
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  Speaker 3: be just there's nothing really in the short term that
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  Speaker 3: offers any kind of stance for those people already in
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  Speaker 3: that spiral where they're looking at tough decisions to close
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  Speaker 3: or downsize and all that sort of thing. If it's
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  Speaker 3: driven by electricity pricing.
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  Speaker 2: The Lery terminal doesn't solve the problem.
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  Speaker 3: Well, it's at least two years away. If it's done fast,
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  Speaker 3: it's going to cost and the LNG that comes in
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  Speaker 3: my understanding, is a bit about twice the price while
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  Speaker 3: it is currently, so there's another price increase straight off
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  Speaker 3: the bat, and it'll be too late for some of them.
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  Speaker 3: There is a lot of market noise, a lot of
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  Speaker 3: chatter about one of the big gas users pulling out
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  Speaker 3: of the market in the next twelve to eighteen months
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  Speaker 3: or so, and that might free up some more supply,
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  Speaker 3: so that might help. But I think the one I
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  Speaker 3: don't know which one it is. There's a lot of
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  Speaker 3: speculation around that. I couldn't really say, but I think
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  Speaker 3: the one thing, if there's a positive out of it,
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  Speaker 3: and it is a positive, that there's some kind of
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  Speaker 3: certainty in a plan and a bit of direction, and
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  Speaker 3: that might be enough to keep some of those businesses
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  Speaker 3: up some more. Well, the third years, we've got a plan.
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  Speaker 3: I mean they've been sitting on this thing for months
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  Speaker 3: and bits and pieces of it have been leaking around
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  Speaker 3: the edge, which is probably quite deliberate, so they can
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  Speaker 3: fly through tights and see what's going to work and
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  Speaker 3: what's not. But you know, there's a lot of people
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  Speaker 3: been paying a bit of hope on this thing and
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  Speaker 3: then we end up with something that's pretty underwhelming.
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  Speaker 2: Yeah, John, what do you think.
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  Speaker 4: Well, I'd probably take issue with the idea that there's
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  Speaker 4: a plan. Actually, I feel like this is people kind
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  Speaker 4: of clambering around in the dark, trying to grasphold or
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  Speaker 4: something to come up with solutions that might be sellable
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  Speaker 4: to the public with an election year coming up next year,
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  Speaker 4: but really don't move the country forward at all. I mean,
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  Speaker 4: let's remember, you know, last year, one in five consumers,
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  Speaker 4: you know, residential electricity customers, had trouble paying their bill,
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  Speaker 4: nineteen percent of people mispaying their bill on time. Fifty
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  Speaker 4: six percent of people are concerned about the price of energy.
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  Speaker 4: This does nothing to address that. It's Allan's absolutely right
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  Speaker 4: when he says it's underwhelming, and it's it's quite perplexing
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  Speaker 4: given the tough talk from the Minister of Energy just
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  Speaker 4: a matter of weeks ago, talking about fundamental reform to
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  Speaker 4: the sector, and you know what's been delivered next to nothing.
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  Speaker 2: John, I don't know how much time have you spent
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  Speaker 2: thinking about this, you have you guys actually had a
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  Speaker 2: look at it and thought what would actually work to
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  Speaker 2: bring down prices for residential customers.
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  Speaker 4: In terms of the report, you know, it's only been
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  Speaker 4: out since this morning, so it's it's you know, I'm
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  Speaker 4: still working through it. Yeah, it's a big piece of
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  Speaker 4: you know, a big piece of analysis in my opinion.
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  Speaker 4: In its essence, we need more supply, and ideally that
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  Speaker 4: supply would be renewable, but we appreciate the fact that
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  Speaker 4: we need firming generation to get us to a point
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  Speaker 4: where we have enough renewable generation, So we are going
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  Speaker 4: to have to rely on fossil fuels for a time,
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  Speaker 4: but we what we need is a plan to get
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  Speaker 4: us to a point will we have enough renewables to
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  Speaker 4: meet demand, and ideally we'd be building ahead of demand.
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  Speaker 4: So there's actually a little bit of fat in the
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  Speaker 4: system so that we can innovate as an economy and
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  Speaker 4: rely on their being reliable eltricity to support that innovation.
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  Speaker 2: Absolutely. What would you do, allan, what's the thing that
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  Speaker 2: you would do to fix it?
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  Speaker 3: Well, I think some of the things that are already
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  Speaker 3: happening really start in the next maybe two to three
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  Speaker 3: to five years will make a difference. The idea that
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  Speaker 3: prices will come down to me, that's just a red hearing.
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  Speaker 3: They might stabilize for a while, and in real terms
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  Speaker 3: they might reduce, but that's still going up. We've already
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  Speaker 3: talked about doubling the price of the LNG when it
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  Speaker 3: comes in. But if you look at things like the
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  Speaker 3: fast track legislation and particularly as that applies, and couple
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  Speaker 3: with the RAMA stuff that's going to make plugging into
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  Speaker 3: the network easier, and the fast track plans for generation,
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  Speaker 3: that's got to go faster. And I'd almost say let's
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  Speaker 3: have an exemption for renew and just get them done.
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  Speaker 3: And then you know, there is a bit of gas
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  Speaker 3: expiration going on and Graymouth patrolling and bringing in a
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  Speaker 3: new supply new field. There's a lot of plans for
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  Speaker 3: solar and wind. Let's get on with that. The deep
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  Speaker 3: boor geo thermal stuff sounds really promising. Why haven't we
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  Speaker 3: started work on that, or if we have at subterraneum,
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  Speaker 3: no one knows about it. Why don't we look at
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  Speaker 3: another hydro not a major one, but there's small hydro
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  Speaker 3: schemes that can go in around the place. But that
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  Speaker 3: seems to have been ruled out by the environmental lobby. I
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  Speaker 3: don't know. But if you add those things together plus
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  Speaker 3: a little bit of gas LNG import, plus the government
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  Speaker 3: saying that it will support an equity raise. It's not
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  Speaker 3: putting an extra money and it's not giving them cash.
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  Speaker 3: It will support an equity raise for some of those
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  Speaker 3: projects if they stack up, and if the LNG terminal
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  Speaker 3: stacks up, all of those things heading in the same direction,
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  Speaker 3: and the planet huntley to bring in more coal. I mean,
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  Speaker 3: who's thought coal would be the answer the plan there
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  Speaker 3: with the three big gent tailors getting together and putting
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  Speaker 3: in that stockpile, that helps. But the ranking engines are
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  Speaker 3: forty plus years old and running out, and so the
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  Speaker 3: engineers that know how to fix them, so you know,
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  Speaker 3: that's something we've got to fix. Maybe a bit of
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  Speaker 3: diesel comes in there as well, which we closed all
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  Speaker 3: the diesel plants about fifteen or twenty years ago. Now
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  Speaker 3: we're looking at doing them again. So that kind of stuff,
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  Speaker 3: it's back to the future stuff.
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  Speaker 2: It's just wild, isn't it. Hey, guys, thank you appreciate
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  Speaker 2: both of you input there. That's John John Duffy. You've
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  Speaker 2: consumed in New Zealand Alan McDonald of VMA.
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