Latest / Early Edition with Ryan Bridge / What can the Government do for the energy sector?

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What can the Government do for the energy sector? · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: The Finance Minister along with the Energy Minister are looking
• 0:04
  Speaker 1: at urgent advice what can we do about this wholesale
• 0:06
  Speaker 1: electricity price spike which has just gone through the roof.
• 0:09
  Speaker 1: I mean it's nuts, really when you talk about the
• 0:11
  Speaker 1: numbers sitting at around seven hundred dollars per megawatt. In
• 0:15
  Speaker 1: late twenty twenty one it was at around one hundred
• 0:18
  Speaker 1: dollars per megawatt. As a result of these prices, multiple
• 0:22
  Speaker 1: large scale businesses are halting their operations. Actually the latest
• 0:26
  Speaker 1: is pan Pack in Hawke's Bay forest products they do.
• 0:30
  Speaker 1: They export pulp product to India and China. They've halted
• 0:33
  Speaker 1: their operations. Cost of electricity outweighs profit. Joining me is
• 0:38
  Speaker 1: Energy Resources alted O Chief executive John Carnegie, John, good morning,
• 0:42
  Speaker 1: Good morning. First of all, why is it that the
• 0:46
  Speaker 1: spike is happening and not happening in other places like
• 0:50
  Speaker 1: in Canada for example. I mean it's interesting looking at
• 0:53
  Speaker 1: pan Pack, they point to Canada their biggest competitor in
• 0:56
  Speaker 1: terms of the products they're making. Their electricity index, when
• 1:01
  Speaker 1: up twenty percent since twenty eighteen hours is up two
• 1:03
  Speaker 1: hundred percent.
• 1:06
  Speaker 2: Well, look, I guess what we're seeing in actually the
• 1:09
  Speaker 2: most painful way is how reliant our economy is on
• 1:12
  Speaker 2: natural gas and how important you know, you're probably wonder
• 1:17
  Speaker 2: why I'm talking about natural gas for electricity, but how
• 1:19
  Speaker 2: important it is to our electricity system. About twenty percent
• 1:23
  Speaker 2: of our produced gas is used in the electricity market,
• 1:26
  Speaker 2: and about ten percent of all electricity generator using the
• 1:30
  Speaker 2: users gas. And of course that might be used to
• 1:33
  Speaker 2: your listeners, but it's a real problem if gas production reduces,
• 1:37
  Speaker 2: which it has been quite dramatically, and when you combine
• 1:40
  Speaker 2: that with extremely low lake levels, you know, we've got
• 1:45
  Speaker 2: some of the driest conditions we've ever ever seen, combined
• 1:49
  Speaker 2: with insufficient gas five power stations which are used to
• 1:54
  Speaker 2: hold the system together when the lakes are low. Well,
• 1:57
  Speaker 2: then I guess you'd call that the perfect.
• 2:01
  Speaker 1: What do you you know? The government's looking at things
• 2:04
  Speaker 1: like importing lng G. What do you make of that?
• 2:11
  Speaker 2: I think al G is probably a very useful backup option,
• 2:16
  Speaker 2: but there are a range of other solutions that I
• 2:18
  Speaker 2: think that they should also be working on as well.
• 2:21
  Speaker 1: How long just on aler G, how long before we
• 2:24
  Speaker 1: would actually see that if we started importing it making
• 2:26
  Speaker 1: a difference here to that market?
• 2:31
  Speaker 2: I mean, that's quite quite difficult to answer, but I
• 2:36
  Speaker 2: think you're talking you're talking around about twelve months, twelve
• 2:39
  Speaker 2: after eighteen months possibly, and it's not an insignificant piece
• 2:43
  Speaker 2: of investment. You know, we're talking hundreds of millions of dollars.
• 2:48
  Speaker 2: But you know, one of the solutions I think, if
• 2:52
  Speaker 2: you're wanting to help bring down prices back to long
• 2:55
  Speaker 2: run averages, is actually just getting more gas into our system,
• 2:58
  Speaker 2: natural gas, and that's actually most likely probably going to
• 3:03
  Speaker 2: come through our existing gas producers who have the infrastructure,
• 3:07
  Speaker 2: the workforce, and the knowledge, but actually just need assurances
• 3:11
  Speaker 2: from the government that their investments aren't going to be
• 3:14
  Speaker 2: undercut by future government policy changes like they were in
• 3:17
  Speaker 2: twenty eighteen.
• 3:18
  Speaker 1: But that's the hard thing, right, I Mean, it's a democracy.
• 3:21
  Speaker 1: We vote people and we vote them out, and when
• 3:23
  Speaker 1: the next labor lot come in, I mean, you saw
• 3:25
  Speaker 1: what they did last time. So how can businesses have
• 3:28
  Speaker 1: confidence to invest?
• 3:31
  Speaker 2: Well, I guess that cuts to one of the solutions
• 3:34
  Speaker 2: that I'm going to propose and have been proposed, and
• 3:38
  Speaker 2: that's us working our way back to political bipartisanship to
• 3:42
  Speaker 2: ensure in New Zealand's energy security Frankly, we should never
• 3:46
  Speaker 2: be putting our country in this situation where we can't
• 3:50
  Speaker 2: take care of our people. Industries closing and communities being
• 3:54
  Speaker 2: devastated by job losses is not a part of an
• 3:57
  Speaker 2: energy future. Thanky that I thought I would ever see,
• 4:00
  Speaker 2: and I hope never to see again. This. Actually, this
• 4:03
  Speaker 2: isn't a political game. Actually, this is about livelihoods and jobs.
• 4:07
  Speaker 1: John, thanks for your time. John Carnegie, the Energy Resources
• 4:10
  Speaker 1: to archieve executive saying we need bipartisanship when it comes
• 4:15
  Speaker 1: to our electricity sector. He's got a point, doesn't he need?
• 4:19
  Speaker 1: But you need confidence. Businesses need confidence to invest in
• 4:23
  Speaker 1: order to make sure that the demand is met so
• 4:25
  Speaker 1: that we're not in this mess every time the hydro
• 4:28
  Speaker 1: late levels are down.
• 4:30
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• 4:33
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• 4:34
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• 4:36
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