Government Must Encourage Energy Efficiency To Reduce Power Prices

Energy efficiency must be part of the solution to high electricity prices, an energy efficiency expert says.

Ecobulb managing director Chris Mardon says that householders and businesses should be incentivised to invest in low-energy devices such as LED lights and heat pumps, which use less electricity than old technologies.

“Replacing all 29 million inefficient light bulbs in New Zealand homes with LEDs would reduce the electricity network winter peak load by 340MW and consumer power bills by $176 million per year,” Mardon says.

Incentives could be applied through the Commerce Commission, the Energy Efficiency and Conservation Authority (EECA), or the Electricity Authority.

Mardon says homeowners and businesses are no longer encouraged to invest in efficient devices because of changes to government policy.

“In recent times we have seen a dismantling of incentives for energy efficiency. Gone are the low-fixed charge regulations and the $1 billion Government Investment in Decarbonising Industry (GIDI) Fund, which incentivised installation of efficient lighting, heating and electric motors for commercial buildings. And in May 2024 the government cancelled EECA’s remaining $156 million funding for residential LEDs, low-cost energy efficiency measures and heat pump water heaters.

“Energy efficiency investment is now almost dead in the water, with utilities much more focussed on building new generation or hi-tech load shifting, neither of which reduces energy consumption during extended periods of tight supply such as now.

“For the sake of consumers and the New Zealand economy, Ecobulb strongly encourages the government and its regulators to restore incentives for energy efficiency.

“Rolling out various low-cost energy saving measures to 1.5 million New Zealand homes would save kiwis $1 billion a year in power, with a four-month payback based on energy savings.

“Upgrading inefficient lighting in SMEs with efficient LEDs would save the equivalent amount of electricity used by the Nelson/Marlborough region, at a third of the cost per MWh of electricity generated by building renewable electricity generation, while also delivering valuable peak load reductions to help keep the lights on in winter.

“Energy efficiency is a no-brainer, and not just because it lowers energy volumes and power bills.

“Replacing all inefficient light bulbs in New Zealand homes with LEDs would reduce carbon emissions equivalent to taking all cars off New Zealand roads for a year, and lower a Hamilton-sized city-worth of peak load—delivering a Net Present Value to New Zealand Inc. of $2.02 billion at an 18:1 benefit-to-cost ratio,” Mardon says.

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