Energy Minister Simeon Brown says the Government is moving forward with its plans for a liquefied natural gas (LNG) import facility by progressing two potential providers to a Request for Proposal (RFP) stage.
Brown made the announcement during a speech at the Auckland Business Chamber on Tuesday morning, where he said the Government intends to sign a contract with a preferred provider this year and have the new LNG facility operational in 2028.
"As New Zealand’s indigenous gas supplies run down, that squeeze only gets worse. Without LNG to fall back on, a dry year leaves us with unacceptable choices,” he said, describing New Zealand as an “outlier” when it came to access to gas.
“An LNG import facility is the fastest and most affordable way to cover the dry-year gap, keep the lights on, and protect thousands of Kiwi jobs. Every other comparable country in the OECD either has access to abundant natural gas or access to gas imports. New Zealand is an outlier, and it is time we caught up,” he said.
Asked by media following his speech when a deal with a preferred provider was being signed, Brown said: “Absolutely before the election.”
LNG facility 'won't be funded by a levy on power bills'
The Ministry of Business, Innovation and Employment (MBIE) began a procurement process for an LNG import facility in October last year. In February, the Government announced it would contract to build an LNG import facility in Taranaki that would cost “north of $1 billion” and be operating as soon as 2027 or early 2028.
At the time, the Government said the cost of the infrastructure would be paid for via a levy on electricity, and the cost connected with importing LNG will be paid by users of gas produced from LNG.
Brown said on Tuesday the Government is currently working through how the LNG import facility will be paid for, but confirmed that "it will not be funded by a levy on power bills."
“I have asked MBIE and National Infrastructure Funding and Financing (NIFFCO) to work through the detail of how the facility will be paid for, including engaging with the gentailers on a fair funding model, and will have more to say in due course,” he said.
Since the Government announced the LNG facility in February, Brown said wholesale electricity prices for 2028 and 2029 have fallen by around $20/MWh. According to Brown, these price drops represent potential annual savings of up to $800 million.
“Recent events in the Middle East are a timely reminder that New Zealand needs secure, diversified fuel supplies. Despite the conflict, LNG remains the fastest, cheapest and most flexible dry-year solution that can be put in place this decade,” he said.
“Responsibility for keeping the lights on sits squarely with the electricity sector, and that is the principle guiding our decisions on funding.”
Power companies need to face ‘real consequences’
Brown also announced on Tuesday that the Government is planning to amend the Electricity Industry Act in order to give the Electricity Authority “a clear role” in ensuring dry-year risk is effectively managed across the system. The Electricity Authority is an independent Crown entity tasked with governing the electricity market, but it does not set power prices.
“Today, MBIE begins consultation with the sector on a new Winter Energy Reliability Obligation. It will require large electricity buyers to lock in back-up supply well ahead of forecast dry winters – when lower rainfall reduces hydro lake levels and limits electricity generation – alongside requirements for generators to have firm fuel available if hydro storage runs low before winter,” he said.
Brown said the Electricity Authority will be required to annually report to the Minister on current and emerging security of supply risks, improving transparency and oversight.
The obligation will ensure the sector secures enough cover ahead of time, particularly during dry years when hydro generation is limited, according to Brown, with LNG just one option alongside new generation, demand response, and storage to ensure a reliable power supply.
“Dry-year risk sits with the electricity sector, not with taxpayers and not with households. It is only fair that the big power companies and large electricity users are the ones responsible for managing it,” he said.
“Power companies, particularly the large gentailers, need to face real consequences when they fall short.”
Brown said this is why the Government is increasing penalties for serious rule-breaking from a maximum of $2 million to up to $10 million, or three times the commercial gain, or 10% of a company’s turnover, whichever is the greatest amount.
In April, the Electricity Authority started asking power companies for more information about higher power prices. The Electricity Authority said most households were facing average increases of around 8% to their power bills going into winter, on top of last year’s 8% increase.
The Government is also planning to update the Government Policy Statement (GPS) on electricity to set clear expectations that the Electricity Authority prioritise dry-year and wider security of supply risks, alongside reliability and affordability, Brown said on Tuesday.
49 Comments
According to Meridian, LNG is not required to manage dry year risk https://www.rnz.co.nz/news/political/596723/lng-imports-not-needed-for-…
The stench of vested interest is hanging heavily. I don't believe the Nats are actually stupid enough to believe LNG is the best option, so that's the only conclusion I can reach.
Deal breaker for me honestly, I cannot vote for these guys again
Perhaps the Nats have over-cooked their case to import LNG, but we wouldn't be having this conversation at all if Labour hadn't have banned oil and gas exploration. Presumably you are a Labour supporter given you listen to RNZ.
Assuming because one won't vote for blue shouldn't ever mean they will go straight to red, or that because one reads an RNZ article they support a specific party, is both ill informed, and closed minded at best. That is old thinking. Can't say I agreed with the oil an gas exploration ban but they have been searching for decades and haven't found much more gas, indicating that it really is immaterial regarding the ban as the likelihood of finding more was minimal.
Please educate yourselves on the various parties and policies on offer and vote more informedly than red vs blue. Clearly the ways of the past will not lead us to prosperity given where they have led us now.
Well said.
NZ's political colours are a lot more than bichromatic these days, so yes a rather silly and pointless conclusion
The Ardern government set up the NZ Battery project to investigate solutions to the low lake/dry year problem. The investigators were not just looking into Onslow pumped hydro scheme, they were looking at alternatives, such as, increasing the storage capacity of Lake Pukaki by raising it nearly 30m, or converting Huntly to run on biomass.
The current Coalition government disbanded the project months before it was due to report. This is the equivalent to book burning. Why would you destroy an expert-led investigation that took years and $millions to undertake?
The Coalition government if it didn't like the Battery Project remit could have expanded the investigations. It could have added LNG into the mix. There have been other suggestions that could have been considered. For instance, that an emergency stockpile of diesel combined with the appropriate generator would have a double benefit of dry year cover and be available for disruptions in global fuel supply lines like we are currently experiencing.
I would think that coal could still be in the mix. LNG and natural gas are good for fast start peaker plants for short duration supply spikes - but that is not what we need in a dry year winter. We need several months of long duration steady supply to replace hydro that has reduced capacity due to low lake levels.
The public should know in detail what the cost and viability of the various options are for tackling the dry year problem - which both sides of political spectrum agree needs to be addressed. Instead, politics has taken over and here we are being railroaded into spending $billions without being given the necessary technical engineering/hydrological/economic explanation for why this is necessary.
Because of this lack of transparency, I do not think this LNG plan has earnt the required social licence to proceed.
Agree
Labour were ahead of the pending trend, this lot are trying to replicate yesterday. Sad to see the new Minister shackled to ideology still.
The bigger question - asked at the recent Re-wiring Aotearoa get-together, I'm told - is whether the whole shebang can be kept functioning. The answer to that is local, distributed generation (almost always PV). It ticks the 'resilience' box, so doesn't tick the neoliberal wealth-to-the-corporates one.
The LNG won't come when we need it and increasingly won't come as time goes on. White Elephant territory.
While I am big on renewables, I think the dry year problem is best solved by fossil fuel, as it isn't meant to run often. But would be good to know why coal etc weren't considered. I suspect they are using electricity as an excuse to import LNG for industry.
Doesn't have to be coal. A stockpile of biomass, wood pellets etc would do the job too. Sure it's not as energy dense as coal, but over the long run the dry year insurance cover is such a tiny fraction of the market the extra cost of coal is neglible.
Brendon, the dry year problem is solved by putting a pile of coal at Huntly.
"In 2001, 2008 and 2012-13, hydro generation was below the normal range, but no more than 9% below the average. The extra generation required to bring hydro electricity production up to the normal range was only 1,071 GWh in 2001, 1,091 GWh in 2008 and 1,100 GWh in 2012 and 2013 combined. That quantifies the scale of the dry-year issue."
https://www.comcom.govt.nz/news-and-media/news-and-events/2025/commissi…
Simeon Brown says that in 2024 coal only provided half the needed TWh of generation. Note 1 TWh = 1000 GWh.
"MBIE advises me that in a dry year the shortfall we need to cover is around three terawatt hours over three months. Assuming that coal can fill 1.5 terawatt hours, thanks to the Huntly firming options that have been put in place, this leaves a remaining 1.5 terawatt hours required to be covered."
"This is not a gap that you can plug with a few days of stored water or a handful of batteries. It is a sustained gap lasting weeks and months, and something has to fill it."
https://www.rnz.co.nz/news/political/597626/government-backs-down-on-le…
So Profile there may be a need for 3000 GWh of reserve generation capacity for extreme events like the 2024 dry year, rather than 1000 to 1500 GWh you describe. But other than point I agree with you. I can't understand why coal is not been considered for that entire reserve capacity. Also if it has to be a thermal reserve - why hasn't a strategic diesel reserve been considered?
Thermal generators (coal, diesel, natural gas, and imported LNG) will have smaller upfront capital costs but higher long term operating costs. While increasing NZ's hydro storage capacity so it ride through a dry year has higher upfront capital costs but lower long run operating costs.
Maui will close at the end of the year. It was discovered in 1969. NZ has never found another field that big in the nearly 60 years since. The whole Taranki basin is gradually been tapped out and no other gas field basin has been discovered. Despite politicians claiming that the exploration ban caused the industry to collaspe. Clearly the physical reality is it was a non renewable resource that had a limited lifespan.
Maui and other Think Big projects like Huntly power plant was NZ's response to the 1970s oil shocks. A whole lot of North Island industrialization was based on cheap gas and that has ended. So in the forestry sector etc we have seen deindustrialisation.
Yet thermal generation doesn't have to be NZ's energy future solution. Pre Huntly NZ actually had very little thermal capacity in its electricity system.
Australia, which has an abundance of piped natural gas, which is a lot cheaper than LNG (that has to be cooled, compressed and shipped) yet it is finding that the combination of solar and batteries is the cheaper option and it is closing down its gas peaker plants.
Does this give Australia an industrial advantage over NZ?
You ae both arguing for yourselves (and your current lifestyles).
Need?
More like want...
PDK I have edited my response to Profile. I don't think I am being self centered in my argument. I am trying to describe some of the history of how we got into this situation. I would want a more transparent public conversation, rather than this current railroaded process.
No doubt we will always have differences. Your worldview is malthusian and degrowth. My view is that abundance is still possible. Yet I think on this LNG plan issue we both agree it seems short sighted and this Coalition government has been less than transparent. It hasn't proven its case.
MBIE's 3 TWh is triple what history has shown us - in a country that is being actively deindustrialised by the laptop class.
"If supplied by coal at Huntly power station, 1,100 GWh would require two of the 250 MW units operating 24/7 for 3 months on each occasion. That dry-year back-up role would burn about 500,000 tonnes of coal each time"
There is plenty of hydrocarbon opportunity here no matter what the fifth column laptop class tell you - better to take advice people who do stuff for a living.
"… they have to fight with the difficulties of getting permits to explore. Over the last ten years or so many applications have been made by small companies for prospecting licenses which have been turned down by the ministry, as so nobody nobody knows about them. Fifteen to my certain knowledge knowledge.
We could have a very bright energy future if we do the right things?
Yes, that’s totally possible …there are a number of targets in the onshore which could bring gas to market in the relatively near future.
…even onshore Taranaki by world standards not heavily drilled. The Taranaki Basin both on and offshore has had 400 wells drilled, which sounds like a lot but the equivalent area in the North Sea has had 12,500 wells drilled. …The Taranaki Basin is a good basin, per well its discovery rate is good [1 in 6 for onshore] and its production level per well is very good. It just lacks that investment capital …and political certainty …we are waiting for the bureaucracy to grant the permits so the explorers can get going.
…Taranaki has very good pipeline infrastructure and production stations. If you are in a position to link in to that into that infrastructure from time of discovery to production could be less than one year."
David Bennett, an experienced oil and gas geophysicist, about New Zealand’s vulnerability at the end of global fuel supply chains. David explains that while current reserves may cover several weeks, future access is uncertain, with diesel posing the greatest risk to the economy. However, a topping refinery in Taranaki could be made a reality to refine local crude in about a year if the political will could be found.
https://rcr.media/episodes/dave-bennett-oil-gas-exploration-veteran-exp…
"Manufacturing in NZ is death by a thousand cuts. Everywhere you look it’s the cost rent, labour, raw material, but in particular energy. We don’t talk enough about the fact the NZ is being actively de-industrialised. For the first time now use more power for households in this country than we do for industry.
…we are now paying more than $20k/month for a power bill that used be $8 or $10k. It makes it very hard to survive."
https://rcr.media/episodes/jackson-fowler-medical-plastics-ceo-india-ft…
Over the past two years, six wood processing facilities have closed across New Zealand, including the Kinleith Mill in Tokoroa and the Eves Valley Sawmill near Nelson.
This year it was announced that both Heinz Watties and McCain Foods would wind down operations partly due to gas and electricity costs – taking hundreds of jobs with them.
And over the weekend a public meeting was scheduled amid concerns about the future of two of the Far North town’s timber mills.
https://www.stuff.co.nz/politics/360983630/help-industry-ride-out-gas-t…
"I have asked MBIE and National Infrastructure Funding and Financing (NIFFCO) to work through the detail of how the facility will be paid for, including engaging with the gentailers on a fair funding model, "
Do we take from that that all though it won't be paid for by a levy it will be paid for by via electricity sales?
Great post Brendon. This government has been great at tearing stuff down for purely stupid ideological reasons that cost the country dearly.
Luxon's legacy will parallel Trump tearing up Obama's deal with Iran; ideology trumping thought.
Mind you, one needs to be capable of the latter...
Interesting.
I had a similar thought re cost recovery source as redcows.
Then I thought, does this give greater scope for competition between the gentailers? Meridian claims pretty much 100% renewable generation. Can Meridian exclude itself from the LNG folly?
Possibly a good opportunity for Meridian to support roof PV generation with above average buy back $/kwh and thereby expand it's dispersed generating capacity while the sun shines, conserving lake stored water for cloudy days.
Meridian already have above average buy back. But PV doesn't solve the dry year problem. You can't turn the sun up to generate more power in a dry year, it tends to produce the same amount of power every year.
Hydro works great as a battery for the intermittency of sun and wind day to day, but not year to year to cover dry year risk, at least not at our current storage capacities.
Meridian are 100% renewable, but they were one of the companies to buy coal firming options from Genesis to cover a dry year. They are quite exposed as obviously it's the big hydro generators that lose generation in a dry year, and that gap has to be filled somehow.
Good opportunity to can the ETS.
The more renewables you have the more expensive your electricity. Windmills and panels are useless on a frosty night. Hydro/wind/solar doesn't provide competitive process heat for industry. We all have to pay for UN virtue signalling and politician sound bites.
The Electricity Authority said most households were facing average increases of around 8% to their power bills going into winter, on top of last year’s 8% increase.
"The December 2025 quarter delivered a record high share of renewable electricity generation at 96.4%, up 2.1 percentage points on the December 2024 quarter. Driving this was strong hydro output and increases in solar capacity over the past year."
If more renewables lead to higher prices why is Australia whose gas fields are not depleted replacing gas peaker plants with solar, wind and batteries ( which covers the evening peak demand)?
Why are electricity prices falling in Australia but not in New Zealand?
https://www.abc.net.au/news/2026-05-26/power-prices-fall-in-latest-dmo-…
Because this is not an argument about the best way forward it is instead a flag waving exercise in political affiliation.
Read the first sentence. Aussie consumers are getting a break from inexorable rise in electricity cost with the help of coal. On a cold winter night last year spot electricity prices surged up to $17,500/MWh on a sustained price surge in one windless evening. Take out base load, balancing, stabilisation and reap the whirlwind.
"The Australian Energy Regulator (AER) today published a report into energy prices exceeding $5,000 per megawatt hour (MWh) in the National Electricity Market (NEM) during April, May and June 2025.
The wholesale 30-minute energy prices exceeded $5,000 per MWh 66 times in the quarter - 19 times in NSW, eight times in Queensland, 15 times in Victoria, 15 times in South Australia and nine times in Tasmania. This compares to 11 high prices in the previous quarter and 19 high prices in the same quarter last year."
https://www.aer.gov.au/news/articles/communications/aer-reports-q2-2025…
https://wattutilities.com.au/june-2025-the-month-energy-markets-will-ne…
"In December 2021, Prime Minister Anthony Albanese promised Australians their economic plan would reduce power prices by $275 by 2025.
“I don’t think, I know, I know because we have done the modelling,” Mr Albanese said at the time.
However, when placed side-by-side, the prices from the 2024-2025 financial year were not $275 cheaper; instead they are hundreds of dollars higher."
https://www.skynews.com.au/business/energy/labors-275-power-price-promi…
So it is your opinion Profile that Australia would have cheaper electricity if they built more gas and coal generation and reversed course on their ramp up of solar and wind generation with a build up of battery backup to provide more round the clock supply?
If you are correct in your description that gas and coal is the cheaper energy option then why do you think Australia is committing a massive deindustrialisation mistake?
Australia is captured by woke ideology. The extra transmission, backup, balancing, syncro etc. costs of low energy density, remote windmills and solar panels drives your system costs through the roof. Have a look at history. Virtue signalling isn't low cost for the man in the street.
"Throughout the 1980s, '90s, and most of the 2000s, electricity prices tracked fairly closely to general consumer price trends.
In the past decade, however, electricity has shot off the charts. Since 2008 power prices have risen 117 per cent, more than four times the average price increase across sectors."
Have a read of Dieter Helms work or McKays withouthotair to get a better understanding?
https://dieterhelm.co.uk/energy-climate/the-price-of-energy-and-the-sys…
https://www.withouthotair.com/
https://www.abc.net.au/news/2018-07-18/electricity-price-rises-chart-of…
The whole world must have succumbed to woke ideology because "in 2025, solar generation grew by 636 terawatt-hours (TWh) – 17 times more than gas generation, which increased by just 38 TWh. Solar alone supplied roughly 75% of new global electricity demand growth last year, while gas contributed only around 5%."
And this is the fifth year in row that gas percentage of total electricity generation has declined. The evidence points to solar crushing gas.
https://electrek.co/2026/06/08/solar-is-crushing-gas-growth-worldwide-a…
Didn't bother to read Dieter Helm then? Yes, woke ideology is rampant, like electricity system cost rises, but I think you knew that. The Chinese must be thick building more coal power plants than the rest of the world combined. Why would they invest a cent in new coal power stations?
"It is here that the confusions about the concept of “cost” come into their own. The most simplistic argument is to point out that the marginal costs of wind and solar are close to zero. This is indeed the case, and in many respects it is uninteresting. Comparing the marginal cost of gas with wind and solar is comparing apples with oranges. ...To be clear, renewables don’t pay the costs of the intermittency they cause to the system; they don’t pay for the additional capacity needed to meet an expected peak demand; they don’t pay for the extra transmission and distribution networks required; and there need to be lots of wind turbines and lots of solar panels to replicate the power output (when the wind is blowing and the sun shining) of a gas turbine."
https://dieterhelm.co.uk/energy-climate/the-price-of-energy-and-the-sys…
"Accelerating the construction of a new power system is an important measure to support the "double carbon" strategy, and a new generation of coal power is one of the main tasks for building a new power system. With less than 40% of China's coal-fired power installed capacity, providing about 60% of the power generation, 70% of the peak capacity and nearly 80% of the adjustment capacity, the atmospheric pollutant emissions decreased by more than 90%, and built the world's largest clean coal power supply system. At the same time, coal power is still the most economically reliable heat supply in China at this stage, and it is an important heat source guarantee for people's livelihood heating and industrial heat"
https://www.nea.gov.cn/20250418/46634bd0851944898dbf3286de753afe/c.html
Dieter was writing about the UK, which has a completely different generating system than NZs. So I didn't bother to read it. Also the UK is even more Nimby than NZ and has an even worse record of building infrastructure affordably. Its electricity prices are higher than most of its neighbours on the European continent. I doubt there are any lessons to be learnt from the UK.
A shame, you could have learn something about system costs and broadened your knowledge. Ok for you to move goal posts to Oz but the UK is verboten? A windmill or panel need backup, syncro, balancing, transmission etc. if it is in the UK, Oz, or NZ hence sky rocketing electricity prices in all three places.
NZ has enormous spinning reserve due to hydro being our major form of electricity generation. Solar and wind can easily be accomadated from a grid balancing perspective in NZ. Profile I don't think you are engaging in a good faith argument here and we are getting well away from the articles topic of discussion which is the Coalition governments LNG proposal.
NZ has enormous spinning reserve due to hydro being our major form of electricity generation. Solar and wind can easily be accomadated from a grid balancing perspective in NZ. Yeah, nah. Here is some more reading for you. Geography and our small grid matter when it comes to adding intermittent generation.
"New Zealand operates a small power system with low inertia and system strength. This implies that the system is more susceptible to active and reactive power imbalances that will cause bigger changes in frequency and voltage, respectively. In addition, the grid is extensive and reaches most parts of New Zealand, with many system components being exposed to external hazards, e.g. local environment and weather conditions.
...With the increase in proportion of variable and intermittent generation in the power system, i.e. wind and solar PV, actively balancing the power system will become more challenging and likely result in more frequency fluctuations.
Wind generation is highly intermittent, which can lead to generation output varying quickly due to wind gusts and potentially shut-down due to low or high wind speed.
Solar PV is affected by weather in a similar way to wind, [10] but may have a weaker correlation which will reduce the overall variable and intermittent effect. Cloud movement can cause solar PV generation to vary, and in some instances a fast fluctuation in active power output can occur.
Variability caused by clouds and wind can make it more difficult for the System Operator to predict the amount of additional generation that will be required from one hour to the next. This in turn makes it difficult to calculate exactly what the output of each generator should be to match demand each trading period.
The short-term balance (second-to-second) between demand and generation is also affected by fast changes in wind speed or cloud movement, presenting a real challenge for the System Operator to maintain frequency within the normal band of 49.8 Hz to 50.2 Hz."
https://www.ea.govt.nz/documents/1979/Appendix-A-Phase-1-final-report.p…
My old flatmate and good friend who unfortunately passed away a while ago did his PhD into the power harmonics of the electricity grid before he went on to work for Transpower and the NZ Electricity Authority. He had no concerns about the ramp up of wind turbines, so your scare mongering doesn't have any effect on me. Your description is the normal grid stability tasks that NZ has managed well for the last 100 years.
It is not "my description". Ironically, the direct quote is from a Transpower report on the NZ Electricity Authority website. Is the EA scare mongering?! I'm beginning to think you don't read anything and make it up as you go along. The past 100 years didn't have any expensive intermittents ramping up the system cost but I think you know that.
You really are full of mis-information and mis-direction Profile. NZ has expensive electricity during dry years not because of the intermittency of solar or wind but because periodically we have dry years meaning low lake levels in our hydro system.
For the last 50 years our back up supply for this situation was natural gas from Maui and the Taranki basin. But Maui is tapped out and we face an expensive choice of how to move forward. Hence where we are with the question of whether importing LNG is really the best option when it costs north of $bn just for the basic infrastructure required.
Profile I think it would be better if we focused on that issue rather than getting carried away with the propaganda of petro vs electro state arguments.
P.S. We may not have had as much intermittant supply but demand has always been intermittent and unexpected breakages do occur creating unexpected supply challenges. The system operators here in NZ and overseas have developed protocols and system rules to manage these situations.
"Research has shown that gas prices have historically been a key driver in wholesale electricity prices rises. According to Griffith University, the historical correlation between gas prices and electricity prices was 0.9 over 2012-2021 and gas prices influenced 50%-90% of pricing intervals in the NEM. More recent analysis by CEIG also highlighted the correlation between gas prices and electricity prices.
Recent outages at coal-fired power stations have also been driving up wholesale prices, as highlighted by AEMO in Q4 2024 and Baringa. When these power stations have outages – which occur more frequently as they age – more expensive gas-powered generation will often be used to fill the gap. "
https://ieefa.org/resources/whats-really-driving-high-power-bills-hint-…
"In the pantheon of policy mistakes, the train wreck that is Australia's east coast gas export industry is a stand-out.
For a decade, it has pushed up the cost of living by elevating electricity prices, contributed to higher interest rates, hindered the switch to renewable energy and cut a swathe through the ranks of eastern Australia's energy intensive industries, many of which have either been forced to shut or move elsewhere"
"The big question now is: Will it work?
The new scheme won't come into force until 2027. That's partly because the industry is so complex due to the numerous, but largely ineffective, laws and rules that have been enacted to correct the gas export disaster."
https://www.abc.net.au/news/2025-12-23/the-gas-fix-to-a-problem-that-sh…
Throughout the 1980s, '90s, and most of the 2000s, electricity prices tracked fairly closely to general consumer price trends. Frank ignores the 1980's and 1990's where coal dominated Australian electricity generation and presents data starting in 2012 when solar panels and windmills got trendy.
https://ourworldindata.org/data-insights/australia-is-replacing-coal-an…
"The Gillard government held a cabinet vote on gas reservation but discarded the idea, succumbing to arguments that it shouldn't interfere with free markets, even though there would be a near monopoly on gas production.
Then-resources minister Martin Ferguson in 2011 openly acknowledged that east coast exports were likely to increase prices."
You can try and blame renewables but that boat sailed long ago....and was foreseen.
You are doing it again! Can you not find anything from the 1980s or 1990s that suits you argument? Martin did make a good point in 2011 - "A number of government policies to promote renewable energy–based electricity generation are funded from the prices paid by consumers for electricity. These policies contribute directly to higher retail electricity prices, and depending on the level of uptake, have the potential to place further upward pressure on prices."
Throughout the 1980s, '90s, and most of the 2000s, electricity prices tracked fairly closely to general consumer price trends. Frank ignores the 1980's and 1990's where coal dominated Australian electricity generation and presents data starting in [2011] when solar panels and windmills got trendy.
https://ourworldindata.org/data-insights/australia-is-replacing-coal-an…
And you are doing it again....obfuscating with an irrelevant time period.
The Australian electricity market was fundamentally different in the eighties and nineties with wind and solar virtually non existent, gas was a domestic commodity (and priced accordingly) and the marginal generator pricing structure (NEM) did not exist....introduced a year or two after our own own goal with it in 1996.
Infrastructure replacement/maintenance costs will always be required and the smart choice is to spend that capex on the lowest cost replacement....anfd that isnt gas, which is the highest cost marginal generator pulling up the price of all electricity....nevermind the fact it will also have to be imported
So we are not allowed to compare electricity prices to the period before we had wholesale addition of intermittents to the grid. How convenient for you.
So breaking the link between gas and electricity prices is the best way to lower electricity prices because gas as it is depleted gets more expensive, and is susceptible to global shocks like the Ukraine and Iran wars.
Meanwhile solar and wind is domestically controlled and the duck price problem (low midday prices and high prices after dark) can be affordably addressed with battery storage. Unlike gas, the cost trajectory of both solar and battery storage per unit of output is declining.
Really the only use case for thermal generation, like gas, is when months of backup supply is needed, such as NZs dry year problem. Coal, diesel or even biomass from the forestry industry could be as good a solution in this scenario as gas, especially expensive imported LNG.
And the thermal solution is only being considered if more water storage cannot be affordably added to NZs hydro system so that it can ride through its periodic dry year/ low lake problem without issue.
Good luck with that for the thousands and thousands of people who have cased in their credits, spent the money and cannot pay it back.
Just...why?
This is a hell of a lot of money to pay for something that's actually designed to be a medium term kludge.
I suspect there are a number of individuals who will end up with lucrative contracts ( either directly or indirectly) from an industry that will benefit from this decision....and there will be cries of BS, but time and distance are great camouflage.
Kiwis don't think we have a corruption problem. I don't think we have gangsters, shakedowns and payoffs. But I do think we have unregulated lobbying and a culture of 'you scratch my back and I'll scratch yours'. We also have a culture of avoiding conflict and not calling out BS.
I think this NZ version of corruption explains a lot about our economic performance. It goes a long way in explaining why so many industries are dominated by a cartel of a few players. Why costs are so high. Why infrastructure costs so much. Why productivity is so low.
Way too many cosy arrangements.
The main knowledgeable people on this forum on NZs energy supply are Brendon and profile. Two points not mentioned is that Oz govt or the state have deliberately forced coal stations to shutdown. Not enough unreliables to make up the difference and unlikely they ever could achieve at a cost that would be comparable with coal or gas, without the current overseas political situation. Batteries are hugely expensive. If you are in the camp that fossil fuels must be ridden of and very quickly then cost is not an issue. There is also something fishy about Oz and it's gas supply. Hocked off to overseas so not easily accessible to local generators?
To keep Huntly going as the reserve for dry years is questionable. I'd suggest the old units are hanging on by a bare thread but without inside knowledge the ability to keep the old units going is uncertain to Joe public. CEO statements on Huntly also need independent outside verification.
There is something weird about Australia's domestic gas markets. Long term export contracts has meant exports are often priced far below what the domestic market pays. I believe that is creating.some political fallout across the ditch.
But that doesn't change the fact that around the world, with a few exceptions like the US with its shale, it is renewables, especially solar that are the fastest growing form of electricity generation.
The Iran war and its effect on fossil fuel supplies will be reinforcing that trend.
"it is renewables, especially solar that are the fastest growing form of electricity generation. " No doubt but taking the UK and Germany as examples it's been forced by their respective govts. Within the last 3 years or so Germany demolished, not closed down) a perfectly good fossil fuel power station that was just six years old and it wasn't small change generation, about 1600MW. The Texas blackout a few years ago had the unreliable naysayers blaming wind and solar but they were not large contributors to the problem. Winterisation of gas equipment was a big problem as well as gas pumping stations with having electric driven pumps with no electricity combined with gas import from other states into Texas being restricted. Ercot (Texas sort of equivalent I think to Transpower and the Electricity Authority combined) I understand is now calling for wind and perhaps solar to have backup generation available under certain conditions making wind and solar even more expensive.
I think solar's huge uptake is more centered on China, India, Pakistan and the rest of Asia and Africa. Rather than in Europe.
The world is dividing into electro-states and petro-states.
I get the impression there is huge propaganda and ideology at work because of this divide. Add in culture wars means propaganda and ideology seems to be dominating the debate. Unfortunately for NZ this undermines a proper clear eyed assessment for the best way forward based on our resources and our needs.
P.S. I completely agree that Germany has made huge energy mistakes. Their solar and wind resources are marginal at best (NZ is much better located). Rejecting nuclear was a massive error. If Germany had done what France did after the first oil shock and made nuclear their dominant form of electricity generation then Europe would look very different today.
https://worksinprogress.co/issue/liberte-egalite-radioactivite/
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