A little bit of wind

6 September 2002

A little bit of wind

The Energy Minister has tried hard, but can't give business an assurance of an adequate supply of reasonably priced electricity, says Business NZ. Chief Executive Simon Carlaw says all indicators point to price hikes and the prospect of power shortages, and the Energy Minister's assurances on the timing of new power stations are not credible.

"Yesterday the Minister said fears of power shortages were groundless because a new turbine would be built in Huntly by 2005, augmented by other generation: "...a little bit of wind, a little bit of geothermal..." and so on.

"But there is no assurance that the proposed new Huntly gas plant will come on stream in 2005 - it depends on a gas source that is still undeveloped. The lead-in time for bringing new gas production to market is around 10 years, so claiming Huntly will be on stream by 2005 is a bold statement.

"The other generation the Minister refers to is equally uncertain. The "little bit of wind" generation is likely to be very little indeed since the Resource Management Act could well scuttle any proposed wind farms in the future, just as it has in the past. The same is likely to apply to new hydro generation. "Meanwhile we have projections of gas shortfalls from as early as next year, and electricity shortfalls well before 2007.

"With real problems in fuel supply, we are going to have problems getting new generation plant built. No responsible board will approve investment in new generation plant without a secure long-term fuel supply contract.

"All of this spells higher electricity prices. Adding to the problem is the Government's Kyoto policy, which will also result in increased power prices.

"The Government should fix the Resource Management Act so we can get more power generation, and review its Kyoto policy in the light of the official confirmation of future generation constraints," Mr Carlaw said.

Ends

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