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When We Needed Electricity, it Was Shut Off

Written By: - Date published: 1:49 pm, August 10th, 2021 - 104 comments
Categories: Deep stuff, Economy, energy, Politics - Tags:

Minister Woods and Prime Minister Ardern have been reduced to asking a series of questions about why Transpower got major electricity providers to drastically cut power last night.

As storms go it wasn’t a major. The cold snap was easily forecast in the www.metvuw.co.nz 10 day forecast, and by NIWA, and by www.metservice.co.nz in its 3 day forecasts.

Both of them have today been reduced to asking questions and saying what what public communication was and wasn’t “acceptable”:

Unlike all the electricity crises since 1992, this one was driven by not enough peak supply. With more post-tropical lows powering up the southerly cycles in winter, this event sure won’t be the last time major cold snaps hit. Just a tiny momentary squeeze on our oxygen tube.

Nor are they historically uncommon.

As well as those that hit Otago, my father-in-law used to recount the 1939 one that stopped the Kingston Flyer in its tracks somewhere near Garfield.

We  have very little direct democratic control over our electricity network. I don’t mean the privatised or semi-privatised bits. I mean the core Transpower network, regulated by the Electricity Authority.

Unlike Waka Kotahi NZTA, which sends out traffic network and crash warnings every day of the week and across the country, Transpower isn’t built for that. It appears it’s also not built for briefing or warning its relevant Ministers in time either.

Transpower’s GM Operations Dr Stephen Jay says that another outage could occur if this demand keeps up.

If we are to decarbonise our country, the electricity network has to be regarded and has to communicate at the same frequency and cut-through as the road network agencies do now. New Zealand will be shifting our entire transport reliance onto the electricity network within a decade. That is serious vulnerability.

After the 2018 storm in which most of western Auckland was cut off for weeks, there was a report. Nothing happened.

Yesterday the Minister of Climate Change came out with a statement saying “Right now, Ministers and agencies are discussing what action they will take to bring down emissions in their sector, which will form the basis of our forthcoming Emissions Reduction Plan. We must use this chance to review progress and make sure the actions we are committing to will cut emissions in line with what the latest science requires.”

This government has at every step encouraged us to rely more and more on electricity as our primary energy source. So a failure of supply is a direct rebuke to that effort.

Transpower themselves consistently promote themselves as our key agency of decarbonisation.

So last night New Zealanders did what all their flats have been fitted out for in winter, and turned their heat pumps on because it was cold. If there is another major outage, the smashing of competing policy waves is going to get louder and higher. It took out about half of New Zealand’s population. None were warned.

Redoubtable energy commentator Molly Melhuish sets out what the government agencies should have done here, such as communicate to the actual people affected.

There will be another report of course. Maybe even a Cabinet paper for noting. Someone will mumble about the electricity price review. MBIE apparently will do a bit more coordinating. It’s simply no substitute for structural integration that forces electricity to be generated and sent where and when it needs.

Minister Woods has been asking similar questions for months. In April she said to an electricity conference that “I want to be assured that the current level of wholesale prices is commensurate with the level of scarcity in the market and the risk of a shortage later this year … and I want to know what, if anything, might be done to moderate wholesale prices without risking the risk of power shortages.”

Questions without adequate answers, months in advance. The shortages came, and no one was warned. Kinleith and Glenbrook are at risk of closure, and Norska Skog Nelson has just shut down.

So neither supply security nor price spikes are a surprise, or a short term thing.

Someone in government is going to have to reconcile James Shaw’s lofty demands with the practicalities of security of supply as set out in legislation for the Electricity Authority.

We have a major issue with electricity security in New Zealand, one which flies right in the face of our climate change response, affects every single household, many of our largest employers, and in future affects every single land transport passenger and driver.

Government, here this: electricity consumers and power companies alike are fed up with your ‘questions’.

The point of government is to generate answers. Answer, or those who were cold will remember and vote you out.

104 comments on “When We Needed Electricity, it Was Shut Off ”

  1. ghostwhowalksnz 1

    Wind power in North Island is currently 15% of its capacity.

    Theres your culprit right there.

    Geothermal is 88%, Hydro is 40% etc. Thats North Island only South Island Hydro is 67%

    When the evening peak happens again tonight Geothermal, hydro, coal will all be able to ramp up to even higher %

    Wind will be only minor change

    • Andre 1.1

      One of the big issues with wind generation right now in New Zealand is it's so concentrated around Palmerston North.

      There's 950ishMW of installed wind capacity in New Zealand, not all of it commissioned and generating yet. 433MW of that is within 10ish km of Palmerston North, 336MW is within 130ish km of Palmerston North, either in Wellington (203MW) or south Taranaki (133MW).

      The only wind generation a reasonable distance away from balmy Palmie that's not more or less in the same weather is 58MW in Southland and 64MW at Te Uku in Waikato.

      This wouldn't be a problem if the weather there was like it was when I grew up there and it blew a howling fkn gale every fkn single fkn day for fifteen fkn years, but it seems they get a few nice days every now then these days.


      • Ad 1.1.1

        Wind is so intermittent and uneven it's never going to be a replacement for Huntly.

        We need peaking storage capacity around the centre of the North Island – somewhere between Tokaanu and Palmy would be useful.

        I suspect that's one of the proposals being evaluated against the Roxburgh Onslow Battery.

      • Sacha 1.1.2

        Current 'market' incentivises building nothing until you absolutely have to.

        • Sacha


        • Andre


          That there's been a Tiwai Point shutdown and 600ishMW baseload hanging to drop on the market at six months notice is also a very strong disincentive to invest in new supply.

        • ghostwhowalksnz

          But to get that missing 200MW last night when wind was delivering 10% of its rated capacity ( I looked it up at the time I heard about power cuts) would mean having 2000MW rated capacity wind farms.

      • Paul Campbell 1.1.3

        We need wind co-located with hydro – then add more hydro generating capacity, let the lakes fill when the wind blows and empty faster when it doesn't – this is cheaper, more efficient and doesn't flood more valleys than pumped hydro

        • pat

          you have just described pumped hydro

          • Paul Campbell

            No, this is like pumped hydro without the pumps, and the extra lake.

            Also the pumping operation is not 100% efficient unlike just letting the lake fill.

            The one downside is that you have to tolerate a wider range of lake levels in the existing lake, but it's likely a lower range than using just an existing storage lake

            • ghostwhowalksnz

              The reverse happens. At nights when wind is consistent and demand is low , power flows from North to South as the hydro is wound down and its wind keeping the overnight demand. Its not quiet pumped storage but its storage none the less.

              Your description falls down as the wind rarely is generating at the 60% of its capacity in the off peak period. Central North island where its windiest, on average can get to 25-30% of rated capacity, but the future of EVs etc is going to want dibs on that in next 10 years long before any pumped storage unit opens

              • Paul Campbell

                It is similar I'm proposing that we put the wind NEXT to the hydro, and share the transmission infrastructure and not incur extra losses across the strait.

                First step to handling future energy needs is to shut down Tiwai (the smelter is responsible for 1% of our CO2 emissions anyway, from the carbon anodes they burn in the smelting process), putting that power onto the national grid (needs a tie line from Roxburgh to Benmore) should be a priority, we shouldn't blow that energy on a green hydrogen boondoggle that effectively results in us exporting that energy

            • pat

              It solves nothing….the storage in the existing lakes is insufficient, even with the current rainfall patterns….you can use wind as much as possible to supplement hydro but as we know the consistency and output is insufficient to replace hydro so if we want a secure supply we need more storage ( a battery) and pumped hydro is the largest and most efficient battery available.

              • Paul Campbell

                It's not really the storage, more you need to be able to tolerate a wider range of operating levels so you have the room to run things up and down again (you have to do this even more for bespoke pumped hydro systems) – I'd rather we don't ruin more of our valleys, I cry inside every time I drive up what was once Cromwell Gorge, let's just change the way we use the ones we've already ruined, remember:

                Way back up in Cromwe-ell gorge,
                Tons of concrete they will forge.
                All our farmland they will drown,
                Right back up to Albert Town.
                Dam the Wilkins, flood the Reece!
                Will their planning never cease?
                We must learn where danger lurks:
                Vandals of the public works.

                (to the tune of God Defend NZ)

                • pat

                  Then we will have to learn to live with (even) less energy…..what was the response to some hours of electricity loss for a few thousand households outside of usual production hours a week ago?

    • Ad 1.2

      Is geothermal a major carbon emitter?

      • Andre 1.2.1

        Depends on its water source and the exact heat extraction technology used. Some of them are as near as dammit zero, some of them are significant emitters. But even the worst geothermal is lower emissions than the best gas-fired power generation.


        • Ad

          And our own ones?

          • Andre

            That The Conversation piece reckons NZ ones range from 22g CO2eq/kWhr up to to 340g CO2eq/kWhr. It didn't get specific about which stations are low or high emitters.

            For comparison, gas-fired at best is about 390 g CO2eq/kWhr and goes up from there, coal is 850ish and goes up, Wind, PV and concentrated solar thermal are in the range of 5 to 20ish IIRC, hydro 7 to 2200ish (low figure is earth dams that drown desert areas, or run of the river schemes, high figure is concrete dams that drown forest areas with rich deep soils that then emit lots of methane)

      • William 1.2.2

        electricityMap can show the carbon intensity of different sources.

        You will probably need to select NZ from the list of countries & then select the North Island from the map (for me NZ automatically shows but I suspect that's because of a cookie having been set from previous visits).

        Once you've clicked on North Island a box will appear showing the various sources. Hover the cursor over each source & a range of information will show. The carbon intensities are;

        Wind 11g CO2eq/kWh

        Hydro 24g CO2eq/kWh

        Geothermal 38g CO2eq/kWh

        Nat Gas 490g CO2eq/kWh

        Coal 820g CO2eq/kWh

        We don't have anything significant but solar is 45g CO2eq/kWh

        Each of those figures is shown as "Source IPCC 2014". A while ago I went looking and iirc the figures are derived from a research paper referenced in one of the earlier IPCC reports. They are global averages and take into account the embodied energy in building each source, as well as the ongoing fuel component. In the case of geothermal there is CO2 released from underground.

        Scrolling down in the popup box will show more information such as sources in the last 24 hours.

        • Andre

          Thanks for the link. It opened to NZ for me on first visit, so maybe it goes by IP address or ISP.

          Notably, France, Norway, Sweden, Austria, Switzerland are all lower emissions than us right now and even pommyland is only a tiny bit worse.

      • Muttonbird 1.2.3

        By definition, geothermal power generation is not without some significant risk of catastrophic failure.

  2. Pete 2

    Answer, or those who were cold will remember and vote you out? Of course.

    No answers will suffice though. Megan Woods and the PM will be blamed. In October 2017 when they went into Government what should Ardern et al done to prevent what happened last night?

  3. aj 3

    my father-in-law used to recount the 1939 one that stopped the Kingston Flyer in its tracks somewhere near Garfield.

    Garston. A photo in the Garston pub showed the engine stuck in a snow drift about 2m deep, I think the train was about half way between there and Kingston.

  4. Ad 4

    Good to see the PM wading in a bit more, but if Transpower get close to another trigger tonight, there will be hell to pay.


    • mac1 4.1

      The PM was quizzed on the outage at Question Time in the House. She gave the times of the day when warnings were given as to the progress of the power situation. She was very strong to say that the problem came not from the ability to supply enough power but commercial decisions as to how to react to predicted shortages.

      https://www.parliament.nz/en/pb/hansard-debates/rhr/combined/HansDeb_20210810_20210810_20 This is the video of question 2 and answers from Judith Collins to the PM. 1.28 and following.

      • Ad 4.1.1

        I don't think her offload onto the generators is sufficient.

        Excuses when you are freezing just suck.

        Also, the government remains the 51% shareholder of the big generators, so they could have picked up the phone themselves. And of course there's always the Letter of Expectation to all of them. And notes to the Stock Exchange. And to the EA. And the government organising the generators and EA and Transpower into managed talks every Autumn.

        • ghostwhowalksnz

          No you cant pick up phone when it comes to a 51% control of listed on stock market company. Even the Board wouldnt be ringing some one up.

          Just last week Little was saying how difficult it was getting DHBs to follow government policy as they see themselves as little silos and will do it their way. That was specifically in relation to mental funding for new facilities ( One DHB hasnt even got a site) and the extra funding for 2000 extra nurses, some used the money to pay overtime and agency nurses. Thats why they are getting their 'executive heads cut off'

          • Ad

            Plenty of those kinds of calls get made across Wellington every day.

            Andrew Little, by letting DHB's run regional vaccinations, has essentially stalled his own reforms.

            Agree generally that Ministers need greater powers in the electricity market. And there are waaay too many layers, and and and …

            …But operating what levers they have instead of apologising and offloading would be a great start.

            • ghostwhowalksnz

              Thats wishful thinking. Its a highly technical area which has computers to run all the possibilities and which when parameters are exceeded for some HV powerline or a plant it will be cut off by the software.

              "Gale force winds earlier in the day at Tokaanu pushed weed into the intake, and then a sudden decline in wind in the evening affected central North Island wind generation.'

              The 3rd Huntly boiler or 'Rankine' as its cutely called takes many hours to start up, so wasnt on standby at all.

              Like I said Wind is the culprit as forecasts cant always predict the time for a drop in winds . Increases can be managed as some turbines can be braked.

              • mac1

                How many hours is needed to fire up the third boiler? as the PM mentioned the first advice about supply issues was hours before.

                She said in the House, "What we've presented here are simply the facts. As you will have heard, at 6.43 a.m., Transpower issued a low residual notice to participants. At 1.02 p.m., Transpower issued a warning that there was insufficient generation offers for the evening peak. Another warning was issued at 5.07 p.m. At 6.40 p.m., Transpower issued a request for network companies in direct grid connections to then shed 1 percent. As I've said, despite all of those warnings, we had an issue where the Rankine at Huntly was not—was not—fired up. Clearly, we had capacity that was not utilised, despite Transpower's requests."

              • Andre

                'Rankine' as its cutely called

                Err, no it's not named Rankine. It's called a Rankine-cycle boiler because of thermodynamic cycle used to transfer the heat to the turbines. All four of the original Huntly units were Rankine cycle units, able to burn either gas or coal. But since they're such low efficiency compared to combined cycle units, it's kind of a waste to burn gas in them.

              • Ad

                Ministers aren't going to take over the spot market or the Transpower control rooms.

                You're misunderstanding operational from governance roles.

            • Sacha

              Andrew Little, by letting DHB's run regional vaccinations, has essentially stalled his own reforms.

              Backwards. Can only reach everyone locally through the current agencies when they have not been replaced yet. The Ministry had enough trouble getting just the booking system done. They still have a pandemic to manage. The separate 'transformation unit' in DPMC is continuing work on the big system changes.

      • ghostwhowalksnz 4.1.2

        I think she has been mis-informed. The hydro, geothermal and gas etc have to have reserve power on standby , ie not delivery to compensate for an unexpected event like a major power line or generator tripping.

        About 3-4 weeks ago Huntly itself 'tripped out' and that was something like 400MW gone in an instant . Luckily it was 5:30 in the morning. Would have been some not so hot showers that morning as system adjusted.

  5. David 6

    A very well reasoned and argue piece Ad. Thanks for putting this up.

  6. Michael Delceg 7

    Large scale storage is necessary, be it batteries or pumped hydro or something else. Fines should be introduced for supply breakdowns that would be higher than the cost of building storage facilities, or the government should get into competition with the suppliers by building storage. This event puts a lie to the neoliberal argument that privatisation increases efficiency. Where have we seen that before?

    • Ad 7.1

      Large scale storage in the right place ie where most of the population's demand is: from Taupo north.

    • ghostwhowalksnz 7.2

      batteries ? I dont think so.

      The mega scale battery farm just outside Melbourne that caught fire the day it was turned on can only supply less than 10% of its capacity as grid feed in.

      Its prime purpose is standby reserve to maintain stability of the Victoria power system with frequency, power factor and all those esoteric AC grid terms. Its like an emergency standby which could happen at any time , not to boost peak supply at all.

  7. Tiger Mountain 8

    Well done all the above from people that know what they are talking about in specific aspects of power supply.

    As a generalist, on this issue anyway, I maintain like a stuck Record,/CD/mp3, that power generation and supply needs to be returned to full public ownership and control as part of the solution to NZ’s energy needs.

    • Ad 8.1

      In the meantime before some government wipes out our sharemarket by nationalising every electricity generator and electricity distributor, it would be useful if the relevant Ministers figured out how to operate the existing levers of power they have already available to make the system work better.

      • Tiger Mountain 8.1.1

        Heh, really…generations of New Zealand workers and tax payers physically built our power infrastructure which was grasped by the artificial power retail market that Maurice Williamson first fronted. It has never delivered for working class NZers. Time to admit it and move on.

      • ghostwhowalksnz 8.1.2

        "how to operate the existing levers of power they have already available"

        There is no levers of power, just wishing it is so doesnt make it true

        They werent there when it was a NZED monolith either. At most they could get the annual power price increase changed in election year

        • ghostwhowalksnz

          I understand the first that Meghan Woods knew that rolling cuts were occurring was when One News called her office.

          No chance of those mythical levers being worked at all. Even the through the roof spot prices that day should have been a warning to power companies move their own levers.

          They didnt. Even Transpower fumbled the ball asking for bigger cuts than needed, some 'error' they say.

      • pat 8.1.3

        Wipe out (though the NZX is doing that pretty well on its own)?….the capital value of the generators is around 35 billion (NZX is 185 billion)….and half of that is gov owned…..17 billion of that 40 sitting at the RBNZ will compensate the private shareholders.

        • Ad

          Tell me how that would work.

          And how much capital would be left in New Zealand as a result.

          • Andre

            All of us that hold shares in the generators could go and buy houses when the government buys them back!

          • pat

            How much capital would be left?….the real capital (the assets) would 100% remain….and under control of the Gov….some NZD will likely be converted, how much I couldnt say, but that is no concern as it is overvalued anyway

    • Andre 8.2

      Y'know, I don't recall the 70s and 80s as being times of awesomely reliable and dependable electricity supply either. So I have my doubts about nationalisation being any kind of cure for for preventing what happened yesterday. The causes and motivations behind failures might be different, but there will still be failures.

      • Ad 8.2.1

        It's like answering "Jesus" to every question asked in Sunday School.

        Replace Jesus with The State: Relax: everything is done for you.

        Transport: Jesus! Housing: Jesus! Health: Jesus! Welfare: Jesus! Climate: OYesJesusJesusJesus!

        And the more crises pile upon crises, the more the overweening state is supposed to save us.

        Here we are with the most interventionist state we've had in 50 years, and the results are actually pretty mediocre.

        • Stuart Munro

          the most interventionist state we've had in 50 years

          Universities are still trying to fit the round peg of learning into the square hole of a "user pays" fiction. The state managed that less than 50 years ago without a thought.

          We are very far from the 'most interventionist' we've been – though its attractiveness an an excuse to do nothing naturally appeals to the lazy babies of neoliberalism, for whom a competent joined up response to anything invariably looks like too much work. That's the job though – not making excuses.

          • Ad

            This government is well and truly in the Muldoon camp. Doesn't mean it's coherent.

            It dropped over $30b in a year just to keep us employed. Who has done anything on that scale since Fraser?

            As for the tertiary sector, it nationalised all the polytechs and directed courses and apprenticeships through them – inside 2 years.

            • Stuart Munro

              well and truly in the Muldoon camp

              Good. Palmer was utterly wrong that doing nothing was a virtue.

              Shame none of the subsequent governments understood their job instead of running the Goodbye Porkpie economy – selling bits off to pay for cheap thrills like tax cuts instead of the kind of assiduous long term planning that characterized the Tiger Economies.

              Incoherent I grant you – parties haven't governed for decades – the lazy babies thought they didn't need to. Left it all to MBIE or the like.

  8. Jenny how to get there 9

    We are facing an existential climate crisis. If our electricity grid can't cope now. Then there is no getting around it, we will have to cut back our electricity use to conserve this resource.

    This being the case, it is better that we do it in a planned way, instead of running the system until it breaks, risking lives and livelyhoods.

    After essential industries, I would prioritise rural and remote areas.

    It is time for townies to make some sacrifices, with planned power outages.

    So, how could it be done?

  9. newsense 10

    Not much of an apology from Genesis.

    • Muttonbird 10.1

      No. He tried to socialise the failure by saying they all dropped the ball and they couldn't see what each other was doing. WTF, that's the way they want it, isn't it?

      Loved the way Megan Woods bluntly said this was a market failure. And it is true.

      "Shareholder greed leaves families cold", should be the headline.

      • ghostwhowalksnz 10.1.1

        Good point. The $300,000 per MWhr and at that price signal was supposed to guarantee supply under economic theory.

        It didnt

      • newsense 10.1.2

        And now poor old Genesis has been ‘victimized’. Surely another leader with such a bad take would resign?
        Not we’re sorry our systems failed and we left people without power. Not sorry we didn’t do what we exist to do. No, instead oh we’re getting bullied!

      • Graeme 10.1.3

        Emerson's take on it in this morning's Granny

        (‘elp mods, entered 500 in width and it didn’t take)

        [image resized]

    • Ad 10.2

      Nor the government. Nor the regulator. Nor anyone.

  10. barry 11

    The electricity market is working as designed. The only reason power cuts are not more common is because when they happen, people start asking questions and nobody wants that. Like supermarket prices and petrol prices, we will pay what they ask and moan to ourselves but not do anything, so long as supply continues.

    People keep talking about low lake levels, but they are higher than normal for this time of year. Tokaanu power station failed because of lake weed (a known and fixable problem). Wind generation was down, but it is only a small part of the equation.

    The reason that Genesis burns coal is not to fill in the gap, but because they can charge more per KwH. When they are the most expensive power all the generators get paid more even if they have much lower costs. There is never any incentive to produce more if it doesn't make the price higher. The only time that power prices drop is when Huntly is completely turned off.

    • Ad 11.1

      Minister Woods is meeting with Genesis today.

      Both will need to come out of that announcing something concrete.

      • Graeme 11.1.1

        Emerson's cartoon I put up above encapsulates the the problem, the conflict between public utility and profit.

        Hopefully this incident will be the fuel Government needs to sort out the mess from the Bradford reforms and the Key sale.

        • Ad

          Minister Wood shoulders both housing and energy. That's a fair weight to carry.

          I too am hopeful, since she's had enough advice over the term to generate a plan.

          Between profit and public, it will be a matter however of shifting the axial point a degree or two in either direction.

          Last term they already shunted dumploads of subsidy into them with the Winter Heating Allowance.

          I suspect Transpower nor EA to get out of this free either.

          Probably all of them in future will get massive fines for grid failure.

          And Wood could always focus their minds by dismissing the Boards of Transpower and EA. With them would go the Chief Executives of both. Probably it's either them or her.

          • ghostwhowalksnz

            Have you seen the members of the Board of Genesis, its like NZ 'neo-lib royalty'


            It reminds me of Boeing, very heavily weighted towards financial return and none on the supply risk …but of course the security of supply isnt 'their' problem its someone else. The rolling cuts are pushed down to the lines companies to action

            • Ad

              We're not going to see much openness to political change if Ardern and Woods keeps offloading blame to the private sector rather than deal with the problem. Both Genesis and now Mercury CE's have already come out with defensive responses today.

              We're also unlikely to get big public-majority owned corporates to change if the government doesn't ensure Labour-aligned people get on those Boards.

              The levers are much, much harder to operate after the 49% privatisation, but Woods still needs to show she can still operate them.

      • mac1 11.1.2

        How is this for concrete?

        "Genesis Energy is planning 500 megawatts of grid-scale solar built on existing North Island transmission connections, including Huntly power station.

        The generator retailer is finalising a joint venture with international developers to build enough solar over the next five years to generate up to 750 gigawatt-hours of power a year. That’s enough to power 185,0000 electric vehicles a year and Genesis plans to eventually back this up with battery storage as well." Energy News Aug 12

        • Ad

          Ah concepts and plans. Good on them and thanks for the citation.

          I'll be impressed if they tied this to greater grid supply security.

    • ghostwhowalksnz 11.2

      Without Huntly we would have power cuts in North island every morning and night.

      2015 Story when 540MW of peak generation in suburbs of Auckland ( Southdown and Otara )was shutdown


  11. RP Mcmurphy 12

    Thorstein Veblen in his Theory of Business opines that businessmen spend as much time as they can tripping up their competitors. now that we have a "MARKET" for electricity we can expect more of the same. Competition my backside. It has become screw as much profit as you can and screw the consumer. Just another example of the infantilisation of new zealanders of all classes.

  12. Marcus Morris 13

    To what extent is the uncertainty of the future of Tiwai point a factor in all of this. It uses thirteen percent of the the countries power generation. If and when it finally closes down the amount of electric power that will become available to the national grid will be massive. Will this not be a factor in the thinking of those planning for future generation.

    • Andre 13.1

      Yes, the threat of all that power getting unleashed on the market at six months notice has significantly inhibited the development of new generation.

      Right now if Tiwai Point got nuked, the grid between Manapouri and the Waitaki basin isn't grunty enough to take all the power that would be freed up. But a grid upgrade is underway, scheduled for completion in 2023. So Meridian will then be free to try to sell that power to other customers, and maybe the current scheduled closure in 2024 will actually happen.

      Certainly by then it will only be the jobs that Rio Tinto will be able to use as hostages, a good chunk of Meridian's output and revenue will no longer be captive.

    • Ad 13.2

      It's very difficult to make investment decisions when the government has extended the life of Tiwai Point with sustained subsidy over many years and the horizon is still 2024.

      The Onslow Battery Dam proposal is also just as enormous.

      Some commitments are still being made, but mighty price surges also make such big decisions difficult.

  13. Dean Reynolds 14

    Prior to 1990, we had a reliable electricity system which gave us the second cheapest power in the OECD, (after Norway) based on state owned electricity generation & supply. The Bolger Government decided to smash this system & replace it with a profit driven corporatisation model which Key then partially privatised. So today, 30 years on, our electricity system is driven by corporate greed, (not community need, as it was pre 1990).

    Instead of pissing around the edges, holding enquiries, etc, we need to renationalise the entire system & operate it, once again, on a non profit basis. This will benefit both domestic & business electricity consumers. Our current electricity system is another example of market failure.

    • Ad 14.1

      As per my post today, We Are Stuck, what you want is not possible. Wishing won't make it so.

      • Dean Reynolds 14.1.1

        Of course it's possible – Government is sovereign. I don't buy into the mealy mouthed narrative that government can't do anything. Michael Cullen renationalised NZ Rail after private owners proved incompetent. What we did with rail we can do with power.

        • pat

          Agree it is entirely possible….but undesired by a range of interests in a position to impact any decision.

        • Ad

          Nixon considered it for oil companies in the late 1970s oil crisis.

          Last Western democratic leader to try straight-out nationalisation was Mitterand. Total failure.


          Michael Cullen bought from a willing seller: not a nationalisation in the revolutionary sense you're speaking of.

          Bernie Sanders toyed with the idea, using existing the TVA and other public entities.


          We have some growth in public ownership by public funds such as ACC and NZSuperfund part ownership of Kiwibank.

          But given NZSuper's light rail fuckup I wouldn't trust them.

          It's certainly in the histories of Labour and National, US Republican and US Democratic Parties.

          The two main problems with renationalising the entire electricity generator system is:

          1. There's no idea whether it would do any better than now.

          The likelihood that it will be better, starting from right now rather than from Max Bradford's time, is about as reliable as Max Bradford's forecasts. Or indeed Minister Mahuta's forecasts for water cost efficiency once she effectively nationalises water ownership.

          2. Capital flight

          No one will trust their money here, so off it goes. That's quite big. It reduces the strength of the economy – and of the government as it means a loss of tax revenue. Additionally, rapid capital outflows reduce our purchasing power of citizens, and every business assisting the electricity industry will pull out in the blink of an eye. Then there's a very likely domino effect on the entire sharemarket since the Government will have taken most of the valuable companies right off it: there goes your Kiwisaver.

          • pat

            Funny thing about public v private ownership…..it ignores the fact that the technical expertise is almost invariably the same people.

            Two reasons given why its 'impossible'…and neither are.

          • Dean Reynolds

            Ad, your blog is a confused & contradictory justification for maintaining the staus quo in our electricity sector – how could the actions of Nixon & Mitterand be remotely relevant in a post Covid world?

            NZ's state owned, non profit electricity system operated successfully for 70 years until 1991, giving us affordable, reliable power. The present, broken system has been in place for only 30 years & is another example of neolib market failure. Do you really think that this broken system is going to meet the government's climate change targets?

            Ad, in last year's sea change election, the millenials were half the voting strength & as from 2023, they'll outnumber the boomer voting bloc. Millenials have had a gutsful of being shafted by the crappy neolib policies foisted on them by the boomers & they will increasingly demand radical change right across the economy, driven by strong, pro active government action. Sooner rather than later, the over paid, profit driven incompetents who've screwed up our electricity system will be replaced & the sector will be returned to public ownership.

            • Ad

              If such millennials want it, they should start with a remit at the next Green Party conference:

              "The Green Party commits to completely renationalising the electricity generators and lines companies"

              If that became a manifesto promise we would at least know it has as shot at 9% support.

              If you are going to propose a policy that big you must do it through democratic means. And of course it would fail at the Green Party conference even if it were proposed.

              • Dean Reynolds

                Ad, why don't you attend the next Green Party AGM & propose exactly that remit? With good background data & some careful lobbying you might surprise yourself by getting the remit adopted as Green Party policy!

                • Ad

                  For two reasons: I'm not a Greens supporter, and it's a stupid idea.

                  You want the policy, you put it up.

                  • Dean Reynolds

                    Ad, if you think that renationalising the electricity industry is a 'stupid idea' then you're wasting everyone's time by writing for The Standard. You should be contributing to Kiwi Blog – their politics are more to your liking.

            • RedLogix

              Millenials have had a gutsful of being shafted by the crappy neolib policies foisted on them by the boomers

              The politicians in the 80's who were promoting the neoliberalism were for the most part born pre-WW2. And the people they got their ideas from were even older.

              The vast majority of boomers had nothing much to do with it, most of us were young adults at the time with little to no political awareness, interest or position in the parties. It all pre-dated the internet and the internal machinations of the Muldoon and Lange govts, was by and large opaque to us.

              This politicising of the generations, setting one against the other is a crappy game at best.

              • Dean Reynolds

                Red, Baby Boomers are the generation born between 1940 & 1964. The politicians of the 1980's who promoted neo liberalism were all Boomers. Lange, a contempoarary of Douglas, was born in 1942, Prebble in 1948, etc.

                All Boomers enjoyed the post war benefits of Keynesian economics & the welfare state, (free tertiary education, full employment with good wages, affordable housing, etc.)

                The neo lib policies of Douglas were the failed austerity policies of the 1920's & early 1930's, tarted up for the 1980's. Douglas & his Boomer cronies deliberately dismantled for the next generation, (the Millenials) all the benefits which they themselves had enjoyed & substituted greed driven neo liberalism. That is why they & their legacy are so despised.

                As the father of 5 millenials, I don't believe in 'politicising the generations' but I do believe that my children's generation deserve the same benefits that I & all other Boomers enjoyed. Unlike you, I don't try to justify intergenerational theft.

  14. RP Mcmurphy 15

    fran wilde sold the wellington MED for a cake tin so the mob could go haywire once a week and pretend they were passionate about something

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