Latest / Best of Business / Margaret Cooney: Octopus Energy Chief Operating Officer hopes ministerial change will bring solutions to energy crisis

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Margaret Cooney: Octopus Energy Chief Operating Officer hopes ministerial change will bring solutions to energy crisis · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks be follow
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  Speaker 2: This is interesting when the text says the issue, of
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  Speaker 2: course with the dollar being down is that it's great
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  Speaker 2: for exporters and we're an export based economy. Meanwhile, everyone
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  Speaker 2: else feels the pain. And that's true. The domestic economy
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  Speaker 2: feels the pain. The dollar goes down, the petro prices
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  Speaker 2: go up, it costs forever to it costs an enormous
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  Speaker 2: amount to run the car, and all other things because
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  Speaker 2: remember everything depends on energy, right Anyway, the text goes
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  Speaker 2: on and says central government will never change their stance
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  Speaker 2: because it helps boost GDP and boost text receipts. And
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  Speaker 2: this is the sort of frustration which sends people who
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  Speaker 2: are not involved in the export industry and are not
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  Speaker 2: making money from the lower dollar. That's the sort of
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  Speaker 2: thing that sends people overseas. And I read that text
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  Speaker 2: out because I want to talk about energy. The energy
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  Speaker 2: sector drives an economy, and the energy sector has a
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  Speaker 2: new minister, and that hoping that that new minister will
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  Speaker 2: have new solutions to the country's energy crisis. So we've
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  Speaker 2: got electricity prices continuing to rise. We've got no solution
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  Speaker 2: found for our looming gas shortage so far. And we
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  Speaker 2: have a new Climate Change minister and it's Simon Watts
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  Speaker 2: from the north Shore. He picks up the energy portfolio
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  Speaker 2: from Simon Brown. So let's talk about this. I'm joined
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  Speaker 2: by Octopus Energy Chief operating Officer Margaret Cooney right now.
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  Speaker 2: Happy new year, Margaret, thanks for giving me. It's a pleasure.
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  Speaker 2: So the energy crisis, where is it from your point
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  Speaker 2: of view?
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  Speaker 1: Oh?
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  Speaker 3: Look, it's still going. I think as we're sauring the
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  Speaker 3: Sember when the GDP numbers came out, electricity costs are
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  Speaker 3: having a real drag on the economy in productivity. So
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  Speaker 3: the issue the dry year has gone from last year,
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  Speaker 3: but issue of high prices impacting New Zealand businesses and
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  Speaker 3: households is an ongoing issue.
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  Speaker 2: Yeah, So what's the answer. So, I know, I mean,
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  Speaker 2: we all know this is the problem with it so
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  Speaker 2: many things. We can all point out the problem beautifully.
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  Speaker 2: The question is what is the answer.
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  Speaker 3: Yeah? Well, I think the good thing is that New
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  Speaker 3: Zealand really doesn't need to reinvent the wheel here. The
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  Speaker 3: OFCD have identified that basically we need to do some
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  Speaker 3: reforms to support competition in the sector. So one of
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  Speaker 3: the things that the Minister has highlighted is that there
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  Speaker 3: is a reform agenda that's needed an energy and it's
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  Speaker 3: really action in that. So we know already that the
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  Speaker 3: current energy prices are well above the cost of new generation,
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  Speaker 3: so all we need is new generation coming into market
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  Speaker 3: also settings that support much more innovation. So we have
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  Speaker 3: seen abroad just the massive impact that entry from new
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  Speaker 3: generation investors and retailers like ourselves is having on energy markets.
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  Speaker 3: And I think, you know, there's a bad news story
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  Speaker 3: at the moment around the energy but there should be
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  Speaker 3: a lot of hope and confidence that with some reform
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  Speaker 3: we can actually make sure that the New Zealand economy
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  Speaker 3: is driven by the energy sector and it's not no
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  Speaker 3: longer an Achilles heal.
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  Speaker 2: So when we talk about new generation, if you're going
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  Speaker 2: to talk about a DAN that's going to take forever,
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  Speaker 2: even no matter how much fast tracked legislation comes in
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  Speaker 2: the resource consenting and the engineering is extraordinary. If you're
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  Speaker 2: going hydro, then you've got to cause wind, and you've
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  Speaker 2: got geothermal etctera, and you've got solar. You know, now
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  Speaker 2: really do we have enough extra generation there to actually
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  Speaker 2: cope with what we already use in terms of energy
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  Speaker 2: and what we hope to use in energy to further
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  Speaker 2: far on growth.
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  Speaker 3: There are is quite a substantial pipeline of potential generation
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  Speaker 3: development sites. Part of the problem is that lots of
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  Speaker 3: these new entrant generators actually can't get the projects off
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  Speaker 3: the ground because they can't get the contracts with counterparties
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  Speaker 3: because the market so locked up. So it's really just
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  Speaker 3: reforming that piece to unleash a level of investment that's
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  Speaker 3: needed to help scale the sector and also decarbonize the
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  Speaker 3: sector as well.
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  Speaker 2: Everyone loves to talk about the oil gas exploration. Of
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  Speaker 2: course we didn't promote it. We didn't actually stir it
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  Speaker 2: on by banning it. That was bad for business, and
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  Speaker 2: of course people didn't want to put money into that
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  Speaker 2: sort of business if they're going to see a government
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  Speaker 2: banning and then unbanning oil and gas exploration. But also
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  Speaker 2: before that even happened, we were finding it difficult to
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  Speaker 2: find any new sources. So where do you think that
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  Speaker 2: where do you think we are in that area in
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  Speaker 2: that sector of the sector.
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  Speaker 3: Look, I think there are a whole number of issues
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  Speaker 3: around the gas sector. There hasn't been enough exploration to
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  Speaker 3: bring on new supply. That's an obvious issue, but there's
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  Speaker 3: much debate about the Crown Minerals Act as well, so
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  Speaker 3: I don't think we should expect huge changes there in
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  Speaker 3: the short term. It is a gas is ultimately like
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  Speaker 3: kind of ten year horizon to invest in it and
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  Speaker 3: find it. But I think one of the things we
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  Speaker 3: should place a lot more hoping is actually the potential
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  Speaker 3: of other technologies to fill the gap that has previously
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  Speaker 3: been filled by gas. So we are seeing massive reductions
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  Speaker 3: in the cost of of grid scale batteries, and so
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  Speaker 3: the combination of building out those renewables like solar that's
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  Speaker 3: falling and putting batteries in that is another solution.
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  Speaker 2: Yes, yeah, absolutely, But of course then they become dependent
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  Speaker 2: on the rare earth minerals that then also start to
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  Speaker 2: run out, and then you have a run out there
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  Speaker 2: as well. I mean, really, what human kind needs to
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  Speaker 2: find is a cheap and reliable and perpetually renewing energy source.
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  Speaker 2: Have you heard of any of those lately?
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  Speaker 3: We've got a New Zealand based nuclear fusion operation so
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  Speaker 3: Open Star, so maybe there's hope in.
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  Speaker 2: That really as that we're at. Because I'm hearing this
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  Speaker 2: in America as well. I think they are saying they
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  Speaker 2: are saying, look we've got an energy crisis in America,
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  Speaker 2: and look how much oil we've got. But so they
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  Speaker 2: are really saying we have not maximized nuclear technology.
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  Speaker 3: Yeah. Look, I think more immediately for New Zealand, bilving
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  Speaker 3: out renewables than batteries are an option lot. Guess in
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  Speaker 3: the medium term maybe, but there's a few hurdles there.
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  Speaker 3: I think the other big thing to highlight is that
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  Speaker 3: for households, adopting solar is becoming increasingly economic. So the
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  Speaker 3: payback on the solar system now is around five to
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  Speaker 3: seven years, and you know, beyond that period, it's not
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  Speaker 3: like a couch. It actually starts making new money. So
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  Speaker 3: the one team which we do need to do expanding
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  Speaker 3: our energy supply. You know, I would strongly encourage everyone
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  Speaker 3: who has the access to money or a low interest
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  Speaker 3: loan to look at solar because you know, it really
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  Speaker 3: really does stack up.
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  Speaker 2: All right, Margaret Cooney, I thank you so much.
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  Speaker 1: Now.
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  Speaker 2: Margaret is the Octopus Energy Chief operating Officer.
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