The inherited power supply crisis

The Herald reports:

An influential collection of business and consumer organisations are calling on Prime Minister Christopher Luxon to fix the “broken” energy sector.

In a letter published in today’s Sunday newspapers titled “Our energy market is broken”, Luxon was told the country was running out of gas, new electricity generation is taking an age, soaring prices are forcing businesses to close and families are struggling to heat their homes over winter.

Among the organisations to sign the letter were the Auckland Chamber of Commerce, whose chief executive, Simon Bridges, is a former National Party leader; the Employers and Manufacturers Association, the Northern Infrastructure Forum, Consumer NZ and four independent power retailers.

Under the headline, “Our energy market is broken”, the organisations appealed for urgent reform of the energy sector, which they said has failed to serve New Zealanders, businesses and the country’s infrastructure needs.

They are correct. We have a shortage of energy supply, and this is going to send power prices soaring. At the moment it is mainly businesses paying the extra costs, but it will inevitably hit residential prices soon, and it will hurt.

New Zealand has gone from a country with internationally competitive pricing that attracted businesses to pricing that is closing businesses down, McDonald said.

There are no quick fixes, but the country needs to get on with gas exploration or some kind of thermal option to back what’s happening with things such as solar and wind, he said.

The fast track law should allow more solar and wind generation to be consented. But we also need gas and thermal energy. Ideally more hydro also.