Hamish Rutherford writes:
Monday night’s rolling blackouts were far from the first sign that New Zealand’s electricity system is struggling to cope, but it does take the issue to a whole new level.
With the Government squarely blaming the problems on commercial decisions of the electricity generators, the sector faces increasing risk of a shake-up.
“If we are going to have a market-oriented system providing security of supply, then that market must deliver,” Energy Minister Megan Woods told Parliament.
“The market failed in this respect.”
For months, major industrial users have been warning that the industry was under such strain that thousands of jobs are at risk.
Already Taranaki’s Methanex has idled one of its plants, the Norske Skog pulp and paper mill in Kawerau has closed, other paper plants are said to be precarious and even New Zealand Steel has dropped hints about the future of its operations at Glenbrook.
As well as low hydro lake levels, the system does not have nearly enough gas to provide the resilience needed to keep the system at capacity.
Not enough gas, so we banned exploring for any more!
When Act MP Simon Court asked Woods in June about whether the Government may intervene in the gas market to try to prevent power outages, Woods responded with reference to the NZ Battery Project, a massively ambitious project that is unlikely to be built before 2030, if it is progressed at all.
To be fair taking nine years for Labour to develop a solution would be fast for them.
Between the decision to rip up the rules on the gas market, to the difficulty consenting renewables projects, to the threat to build hydro storage at Lake Onslow, the market is simply responding to the signals that the Government is sending it.
I’m not sure you will ever be able to get a major hydro dam consented again.