NZMEA Media Release, Tuesday 15 April 2008.

Again we ask, ‘will we keep the lights on?’

The New Zealand Manufacturers and Exporters Association, (MEA), says that the renewed possibility of power shortages this winter shows that the New Zealand electricity “system” is not delivering the required reserve margin and is calling on the Government to intervene in the situation to deliver a secure electricity supply.

“The Government is choosing to sit on its hands on this issue at a time when it cannot afford to do so”, says Chief Executive John Walley. “There are too many signs that the electricity system could be under severe pressure this winter, and this is the third time this year that there are warnings that New Zealand is on the verge of experiencing rolling black outs. The situation is very serious”.

Asking industry to reduce its usage, or moving to ever more price based rationing is not a solution to the problem says Mr. Walley.

“Switching the lights and machines off will not help. This is merely a band aid measure. Industry will make savings where it can but it cannot do so to the point of losing production. In many factories and facilities throughout the country, it is impractical and indeed, unsafe to do so”.

“Consumers reducing usage as prices increase will certainly reduce demand but is that a desirable state of being?”

“The electricity issue in New Zealand begins at the top. 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 and the Government needs to reassess its aspirations regarding carbon neutrality and the slow and litigious process of distribution and generation upgrades. These serve only to reduce an already thin reserve margin and increase the chance of black outs, especially if the weather turns nasty”.

Mr. Walley says that 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 combustion based plant, just because it may or may not be a political selling point.

“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 and associated transmission 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, then expect a scramble to develop and improve electricity supply – whatever the cost”.

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

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