Plant shut downs point up ramshackle power supply

Friday, May 2nd, 2008

Plant shut downs point up ramshackle power supply

The lack of a reliable electricity supply is causing New Zealand long term economic damage, the Employers and Manufacturers Association (Northern) says.

"The government's energy policy and related emissions trading scheme is in tatters," said Alasdair Thompson, EMA's chief executive.

"Ever since signing the Kyoto agreement power generators have had no certainty about investing in power supply. Now they're prohibited from investing in thermal plants for 10 years.

"Plainly Energy Minister Parker has no idea what's going on. Recently he said there is no reason to be alarmed, yet today we learn major power users are shutting down production capacity because the price of power has been too high for too long.

"Major users are facing wholesale prices double or more than usual, so high in fact it's more profitable for them to close some capacity or, in the Rio Tinto case, their supplier pays them to shut down.

"Yesterday SOE Minister Trevor Mallard said the electricity system was coping. Overseas investors must be incredulous a Labour government thinks putting people out of work represents a system that is coping.

"Our power supply systems have become ramshackle.

"This is the fourth time in seven years we have had crises or near crises of this type.

"Yet we have a government policy preventing new coal or gas generation for 10 years, and contemplating an emissions trading regime that would eliminate 22,000 jobs and slash growth prospects."

ENDS

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