Yet again we ask, ‘will we keep the lights on?’

MEA Media Release, Friday 15 February 2008.

Yet again we ask, ‘will we keep the lights on?’

The Manufacturers and Exporters Association, (MEA), says that the Government is consistently ignoring the warning signs threatening a secure electricity supply and its claims that it has made unprecedented levels of investment and that there will be no blackouts this year, is yet another case of ‘lies, damned lies and statistics’.

“Growth in demand, low lake levels, planned plant outages, warm rivers and the Cook Strait link restrictions highlight that the New Zealand electricity “system” is not delivering the required reserve margin”, says Chief Executive John Walley. “This Association made this point in 2006 and when companies such as Meridian Energy issue similar warnings that New Zealand is on the verge of experiencing rolling black outs, the situation is very serious”.

The MEA says that the impact that electricity shortages in South Africa have had on its people and economy should be sending a clear warning to New Zealand. The Government’s aspirations regarding carbon neutrality and the slow and litigious process of distribution and generation upgrades, serve only to the existing reduce reserve margin and increase the chance of black outs, especially if under adverse weather conditions.

“If responsibility for keeping the lights turned on rests with the electricity industry, then the framework under which they operate needs to ensure that adequate levels of investment are channelled into the areas that provide lowest cost generation and reliable transmission. The framework needs to be free from political tinkering and messaging. If the electricity companies cannot access hydro generation, then it does not make sense for the Government to take other sources of generation such as coal or even nuclear off the table and impose moratoriums on new plant, just because it may or may not be a political selling point”, says Mr. Walley.

“The heavy emphasis and reliance that the Government has placed on wind, tidal and solar at the expense of hydro and thermal projects, will not be sufficient to meet with New Zealand’s electricity demand in the medium term and it brings us back to the reality when ‘just-in-time’ becomes ‘just-too-late’ and the lights go out. It can take up to 10 years to bring large generating projects on stream, even the large scale wind farms that Meridian is now proposing can take several years. There is no quick fix, but if New Zealand experiences power cuts this year, as South Africa has, then expect a scramble to develop, improve electricity supply – whatever the cost.”
“When we hear comments from our politicians such as ‘we will be well until 2012’, ‘things are bad but not that bad’ and ‘we will get through winter’, we are reminded of the advice that South African Minerals and Energy Minister Buyelwa Sonjica gave to South Africa’s Parliament last month that the people could, ‘boil less water, use the microwave rather than stove, take a shower and not a shallow bath’ as a means of dealing with the power crisis”.
“New Zealand needs urgent development of large hydro and geothermal plants, a robust north-south 400kv transmission backbone is an absolute must, backed by wind, bio-diesel and later marine and nuclear sources, to avoid a future that is now present in South Africa”.

“It is a pity that political spin, hot air and economic analysis will not keep the lights on, and it seems we will need more blackouts to see the light”.

MEA – the authentic and independent voice for manufacturers and exporters.
For further comment contact John Walley, 03 353 2545, 021 809 631.

David Miller, MEA Media Liaison.
Phone: 03 353 2544, 021 605 771
davidmiller@mea.org.nz or david@cma.org.nz

The New Zealand Manufacturers and Exporters Association (MEA) is a national organisation that was founded by the Canterbury Manufacturers Association (CMA) and the New Zealand Engineers Federation (NZEF). The MEA is New Zealand's only sector focused and independent voice of manufacturers and exporters. MEA members make nearly $2.0 billion in sales and have an export value of around $1.0 billion. Our organisation can trace its beginning to the early history of New Zealand.

As a legacy of the hard work and careful financial management of the past, we have a significant asset base that enables our independence and extends our activity. Subscriptions fund only a small part of our current operating costs.

Membership is open to all manufacturers and exporters and others at the discretion of our Council. Enquiries should be directed to mea@mea.org.nz

ENDS

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