Subsidies begat subsidies

Why is the south subsidising power delivery to the north? Steven Joyce opines:

I hold no brief for Rio Tinto or its aluminium smelter but I am a fan of Southland, and I don’t think Southland is getting a fair deal.

It’s worse than that.  Southland looks like it might be getting lined up for the “Taranaki Treatment” from the government.

Rio Tinto is once again reviewing the future of the smelter, which directly and indirectly, pays the wage packets of about 3,500 people in a region of roughly 100,000. . .

That’s a lot of jobs and there will be more in businesses which service and supply the smelter and it’s staff, but that by itself isn’t a justification for subsidising Rio Tinto. But there’s a but:

But actually they have a legitimate point – or at least, the people of Southland do.  People and businesses in Southland, including the smelter, pay too much to get their electricity delivered to them.  More correctly they subsidise the delivery of electricity to everyone else, and they are sick of doing it.

The lower South Island produces much of New Zealand’s power, and at the lowest cost, but they see no benefit from having the big hydro power stations in their neighbourhood.  Electricity is expensive to shift around so it should make sense to set up your business near a power station, but it’s not because electricity transmission costs are currently averaged across the country.

If you live over the road in Te Anau from New Zealand’s biggest power station, you are not just paying to have your power delivered to you, you are paying to get it delivered to people in Auckland, 1700 kilometres away on a whole other island.

Given the loss of energy and cost of sending power so far that doesn’t stack up environmentally or financially.

And as Auckland grows, it needs more power. Transpower, which runs New Zealand’s electricity grid, has spent several billion dollars over the last decade upgrading their network and keeping the lights on, much of it for the benefit of Aucklanders.

 And Southland people and the smelter have been paying for a lot of that.  

And we’ve all been paying for the subsidy to Rio Tinto because the south is subsidising the north’s power.

The previous government put together a new Electricity Authority to, amongst other things, sort out a fairer price for electricity transmission. It’s taken a while because it’s controversial.

In 2016 the authority put up a fair proposal that would have saved Southlanders a lot of money. The smelter would pay around $20 million a year less than it does now in transmission charges, and other Southland power users would get a commensurate reduction.

That would be better for the company and other southerners than subsidising the smelter.

But people in Auckland and Northland who would pay a bit more kicked up a big public fuss and so did politicians, including New Zealand First.  The Authority went away to check its sums again. It has now come up with another, watered down plan. It still improves things for Southland, but only about half the amount as previously.  And its still a few years away from coming in.

Tanspower should not have bowed to political pressure to change it’s  mind about people paying the trues cost of power just because for once the south would gain and the north would lose.

So it’s not surprising the smelter is getting antsy, or anybody else in the deep south. Southlanders pay higher petrol prices because the population is smaller and there is less competition.  They pay higher electricity prices because they are subsidising getting power delivered to Auckland.

On energy costs they never win. And they risk large industries leaving – industries that should be attracted to their part of the country because of the abundant cheap electricity that is generated there.

Thanks to the mnemonic Love Many Fat Royal People Today I can still    recite the factors affecting the location of industry – Labour, markets, finance, raw materials, power and transport.

The market in the south is smaller, but if you’re exporting that, and transport are not a big consideration. Finance is mobile, the south has plenty of Labour so it’s just subsidised power that makes the north more attractive.

If the south wasn’t subsidising the north’s power at least some   of the businesses which locate in Auckland, would choose somewhere nearer where the power is generated instead?

That would have the added bonus of slowing Auckland’s growth.

Meanwhile the trendies in Auckland and Wellington opine that we’d be better off without the smelter anyway for all sorts of thinly argued environmental reasons. Of course it’s not their lives that would be up-ended if it goes.

All this is grimly familiar to Taranaki people, who have had one of their largest highest-paying industries sacrificed on a Greenpeace-inspired oil and gas ban that is now generally accepted will do absolutely nothing to reduce climate change. Because of the complex interplay between coal, gas and electricity, it may be making things worse. It’s certainly lifting gas and power prices.

And it is not just industry that is at risk in Taranaki and Southland. There was news out this week that the aggressive new water policy the Government wants to impose on food producers will disproportionately affect people and economies in places like Taranaki and Southland. . .

Our self-styled champion of the provinces might be a bit miffed that provincial people don’t show appropriate levels of political adulation when he shows up with the taxpayers’ cheque book and sprays $10m here and $10m there. The truth is his largesse is poor consolation for the damage other things are doing to the economic prospects of regions like Southland

We shouldn’t subsidise the smelter. Rather we should stop forcing Southlanders to subsidise Aucklanders. 

We should also revert to a more gradual water plan that gives farmers time to adapt, and we should let Southland retain control of SIT. Then we should get out of the way and let the sensible practical Southlanders get on with making a success of their province.

This illustrates how subsidies begat subsidies.

If transmission costs were levied where they fell, Rio Tinto would have cheaper power without subsidies and the rest of the south would also save on their energy bills.

 

 

Check your swtich board regularly

The power went out in our office.

We called an electrician who found this in the switchboard:

The whole board was replaced when we altered two years ago.

The electrician found some of the what-nots (for which there is a technical term which escapes me as I type) needed tightening – some because they can come loose over time, some because they’d never been tightened properly in the first place.

Friends lost power recently and the cause was also found to be due to over-heating in the switch board.

The Fire Service reminds us all to check our smoke alarms when the clocks go forward and back (mutter, mumble, forward this weekend, which is at least three weeks too early). It would pay to check switch boards at the same time.

NZ Power 3x more expensive

Labour’s numbers don’t add up for its power policy:

 

Dr Michael Dunn, engaged by the Taxpayers’ Union to provide the figures for the ‘Bribe-O-Meter’ election costing website, is questioning the Labour Party’s costing of it’s flagship “NZ Power” policy.

Dr Dunn says, “Labour’s claim that NZ Power will cost taxpayers’ $90 million per year is optimistic at best. A more realistic figure is $276 million.”

“As the Government continues to own majority stakes in many of New Zealand’s power companies, NZ Power would see the Government forego much of the income tax and after tax dividends it currently receives.”

“When these aspects are factored in, the NZ Power policy would not cost $178 million as Labour is claiming, but instead cost at least $828 million over three years.”

“The foregone revenue to the Crown is, we estimate, $276 million per year. This is significantly more than Labour’s average of $90 million.

“Labour assume that bringing down the cost of power will introduce offsetting economic benefits. But their assumptions are open to debate, and Labour do not appear to consider who benefits, the long term costs, and the cost to the private shareholders of power companies.”

Dr Dunn’s independent figures are reflected in the Taxpayers’ Union Bribe-O-Meter, which tallies this year’s election promises. The Bribe-O-Meter currently stands at $3,500 per household for Labour compared to $760 for National.

Jordan Williams, Executive Director of the Taxpayers’ Union says, “This isn’t some political hack calling into question Labour’s numbers. Dr Dunn led the team at IRD that costed revenue policy for 12 years. He has advised both National and Labour administrations.”

“The Bribe-O-Meter is to give transparency to the cost of politicians’ promises as we head into the general election.” . . .

A power policy costing us three times what Labour reckons on top of five new taxes and compulsory KiwiSaver with higher contributions all add up to a lot more money out of people’s pockets.

 

Lower power price increases

Power price rises are one of the sticks with which opposition parties try to beat the government.

It’s an easy hit because all but the self-sufficient use power and the lower people’s budgets are the greater the proportion of them has to be spent on the power bill.

However, the facts don’t support their criticism:

New power price data released today shows the Government’s 2010 electricity reforms are making a real difference for consumers, says Energy and Resources Minister Simon Bridges.

“The sales data released by the Ministry of Business, Innovation and Employment for the year ending March 2014, shows the lowest annual price increase since 2001 at 2.3 per cent,” Mr Bridges says.

“Discounts and other benefits from retailers are becoming the new norm in an increasingly competitive electricity market and the new data captures what consumers have actually paid for their power, rather than the advertised price.”

MBIE has also released the June quarter of the price indicator known as the Quarterly Survey of Domestic Electricity Prices (QSDEP), which captures the latest April price increases.

For the June quarter, there has been an increase of 2.3 per cent.  This was driven by a 6.7 per cent increase in lines charges — the component regulated by the Commerce Commission — as retailers passed on the significant investment costs associated with upgrading local networks.

The energy component — the part subject to competition — decreased by 0.7 per cent.

Mr Bridges says competition is the best way to keep prices down and the latest electricity data shows that the Government’s 2010 reforms have helped bring runaway power price increases under control.

“Since the National-led Government took office in 2008, we have halved the power price increases seen under the previous Labour Government.”

Latest figures released by the Electricity Authority show that consumers can save, on average, $155 per year by switching power retailers.

“I encourage consumers to continue to shop around for the best deal,” Mr Bridges says.

The latest electricity price data can be found here: http://www.med.govt.nz/sectors-industries/energy/energy-modelling/data/prices/electricity-prices

Editor’s notes:

In March 2014, the Minister of Energy and Resources announced changes to improve electricity price monitoring and provide more accurate information about how the market is performing. http://www.beehive.govt.nz/release/changes-improve-electricity-price-monitoring

The previous way electricity prices were monitored wasn’t detailed enough to capture all the discounts and benefits being offered as a result of an increasingly competitive electricity market.

MBIE has worked with electricity retailers to develop the new approach, which reflects what people have actually paid for their electricity, including discounts and benefits.

The new data is based on the actual volume of electricity sold and the total revenue, to give the average price paid per kilowatt hour.  It includes prompt payment, multi-fuel and online discounts, as well as incentive and retention payments, and rates paid by consumers on fixed-term plans.

MBIE and the Electricity Authority will continue to work to improve electricity price data, including access to, and analysis of, more detailed consumption data with a view to making this publicly available in 2015.

 The reforms are working and they are far better than the back-to-the-future power play proposed by Labour and the Green Party.

LabourGreen power play will cost us all

Who are you going to believe – politicians trying to win votes or the director of the Programme on Energy and Sustainable Development and Holbrook working professor of commodity price studies with the department of economics at Stanford University?

Frank Wolak is the latter and he’s not impressed with the LabourGreen power plan:

This desire to “reboot” the electricity supply industry is understandable, but it is almost certainly not the best course of action. As a participant in many electricity industry restructuring processes around the world, one important lesson that I have learned is that all reforms start with significant unintended defects that can only be eliminated through a rigorous ongoing analysis of market outcomes and targeted regulatory reforms.

Many features of the current industry structure are consistent with international best-practice and a number of positive changes have been implemented since I completed my report for the Commerce Commission in 2009.

Continuing these efforts to identify and fix flaws in the existing market is likely to provide greater long-term benefits than undertaking a major restructuring of the industry. . .

He thinks major change is needed, but not the LabourGreen one.

His suggestion is to establish a regulator for the industry with a statutory mandate to protect electricity consumers from economic harm.

There are a number of legal rights that a regulator must have.

First, the regulator must have the ability to request any information from market participants necessary to carry out its statutory mandate, receive this information in a timely manner, and have the authority to impose financial penalties on market participants that fail to provide the requested information in a timely manner.

The regulator should also be allowed to require that all of the firms that it regulates prepare balance sheets and income statements using a standardised accounting system designed by the regulator. These accounting systems will allow the regulator to carry out the very important task of setting prices for monopoly services such as transmission access and distribution network access.

The regulator should be required to set prospectively the price of these monopoly services to allow the firm the opportunity to recover the prudently incurred cost of providing these services.

This does not mean that the firm is guaranteed full cost recovery regardless of how it incurs these costs. Because its price is prospectively set by the regulator, the firm’s revenues are independent of any actions it takes, so it has the opportunity to recover these costs if it incurs them in a manner consistent with what the regulator deemed to be reasonable when the price was set.

The final right of the regulator is to set the market rules governing the operation of the wholesale and retail markets.

Rather than allowing market participants to determine the terms and conditions governing participation in these markets, the regulator must set these market rules to protect the electricity consumers from economic harm. Market participants and other interested parties can provide input to this process, but ultimately the regulator must set these market rules because of the enormous impact they have on wholesale and retail electricity prices paid by consumers.

An essential feature of this redesigned regulatory process is an ongoing market monitoring process where the regulator uses data compiled from market participants and data submitted to and produced by the market operator to undertake market performance analyses. Although this market monitoring process is extremely data and human resource intensive, it is necessary for the regulator to anticipate significant market performance problems and take action to ensure a small problem does not become a large problem that harms consumers.

Another role of the regulator is to provide transparent information to customers on the components of retail electricity prices. . .

This is very different from the LabourGreen plan which Wolak described as:

“a sham that might make me feel a bit better”, but was the wrong weapon to attack “runaway” retail electricity tariffs, which he says are the real problem in current market arrangements. . .

Wolak says the NZ Power policy, which would unpick a 25-year-old experiment in electricity market design in favour of a centrally planned model, “may not even solve the problem, which is runaway retail prices.” . . .

“It may look good, but it’s got lots of challenges,” said Wolak of the Labour-Greens policy. “You’re throwing the entire baby out just to get rid of the bathwater and you’re going to start over, as if you have all these problems.

“My argument is that some of the changes since 2009 are pushing in the right direction,” said Wolak, whose 2009 report for the commission found evidence of electricity generators wielding market power at different times, to maximise the value of their generation efforts.

From that, officials calculated $4.3 billion of “excess charges”, which then Energy Minister Gerry Brownlee acted on by shaking up the national retail market, which is now more competitive, with high levels of customer churn. . .

However, Wolak believes moving to a cost-based, single buyer model could be a disaster.

“If what they are going to try and do is say ‘we are recovering costs and allowing you a fair return’, then oh my god, it’s just a can of worms that you wouldn’t believe that’s going to get opened,” Wolak said of Labour’s plan to calculate rates at every power station in the country on a cost-plus return basis.

“They are going about it in a kind of bass-ackwards (sic) way and saying ‘we’re going to say what each guy’s price can be in terms of generators selling’. That’s just a nightmare.”

“What’s simplest is to say we’re going to make this thing as competitive as possible.” . . .

Powerless

A note in the mail box a couple of days ago informed us the power would be off from 10 until 12.30 today while trees near power lines were trimmed.

Thanks to the warning I was prepared – kettle in the office boiled so the staff could have morning tea, computers unplugged and a list of things to do in town.

But when I got back at 12.45 we were still powerless.

They usually over-estimate the time needed but this morning’s job took longer than expected. An extra half hour without power ought to be neither here nor there and it wasn’t a catastrophe but any time without power is inconvenient.

No power means no phone and no computers. It also means no microwave and a couple of men had brought pies for their lunches.

Still it’s back on again and all’s well – except for the seven electronic clocks on radios, oven, mocrowave, DVD . . . . which will have to be reset.

It’s not their money

 Does Meridian Energy realise what it’s saying?

Increasing power prices now would shield customers from large increases if and when planned schemes came about: “Small increases provide a smoother path for consumers.”

 Is it the job of a power company to “provide a smoother path for consumers”?  That sounds like they think  they’re better able to manage our money than we are.

My concern is increased because of the proviso “if and when planned schemes come about”

What happens if planned schemes don’t come about, will we get our money back, with interest?

And how much more power generation do we need? The reduction in production at the Tiwai aluminium smelter means there is considerably less demand for power than there has been for some time.

The Remuneration Authority has a similar line  with regard to local body pay rates:

Authority chairman Richard Oughton, in the circular, said some local bodies were considering not increasing pay.

He said the increase from July 1 was conservative, somewhat less than it should be based on market conditions.

“A zero increase could create a situation where a larger, and perhaps less publicly acceptable, adjustment may be needed from July 1, 2010.

Further postponing an adjustment at that time would only serve to exacerbate the problem,” he said.

 He too is saying that a lower increase now will mean a bigger increase later.

I think ratepayers would prefer to keep a little more of their own money now and worry about how acceptable future pay increases are when the time comes. 

The government is sending very strong messages about the need for restraint so it’s possible that the pubic and private sector salaries on which councillors’ remuneration is based may show little or no increase in the short to medium term.

That would mean the big increase that Oughton is concerned about may not eventuate anyway.

If it does, at least we’ll have had a wee bit more of our own money under our own control in the meantime.

Blackout blues

There’s no convenient time for a power cut and it’s small consolation for the individuals and businesses inconvenienced by the loss of supply  in Auckland today that it happened while it was still light.

The power went off in Northern Queensland  from Ayr to Cooktown just after we arrived in Townsville 12 days ago. It was early evening which wouldn’t be quite so bad here as it was there where the sun goes down about 7pm.

I had to drive to a hen party and had a local navigating who helped me at intersections. My brother got safely to the stag party by luck alone because he drove through the city oblivious to the fact that the traffic lights were out.

No-one will be impressed by the explanation for today’s power cut – one transformer down for routine maintenance and a problem with a second which put two much pressure on the third.

But that’s probably not as bad as the cause of the problem in Queensland – bird droppings  from nesting eagles.

Save power without sacrificing shower

There must be better ways to save power than endangering our physical and mental wellbeing by reducing the flow in our showers to a dribble.

So here’s your chance to give free rein to your inner environmentalist, show you don’t have to sacrifice clean to be green and come up with ideas that will save the planet without sacrifcing personal hygiene and comfort.

First prize gets the biggest laugh, and to get things started here’s my contribution:

The fashion industry could take a lead by promoting the crumpled look. There must be lots of watts wasted by wanton de-wrinkling.

If the fashionistas were to press for less pressing, make the dishevelled look de rigeur and say that creases are cool we could not only save power but also the time wasted by needlessly ironing the crinkles from clothes.

South pays North gains

The cable through which electricity is sent between the North and South Islands has generated many an argument.

The latest has southern generators sparking because they have to pay for it but no longer gain most from it.

In the past they’ve paid because they got the benefit from spending power north but now a similar amount of electricity comes south.

South Island generator Meridian Energy said the link should be paid for by “anyone who uses and everyone who benefits from it”.

That sounds fair to me, although of course no matter who wins this argument, in the end it will be the consumers who pick up the final bill.

Zapped by shocking power bill

Garston cafe owner Tony Corbett got a shock when he saw his latest power bill. Contact Energy charged him  $1100 when his normal monthly power bill is about $200.

His sister Tess Corbett had a similar problem in Kaiwaka – her bill from Meridian Energy is usually about $34 a month but the last one was $394.

The cause of the problem appears to be the meter readers’ inability to read the meters. They’d given a six-figure killowatt reading instead of a five-figure. The sixth digit on the meter is a unit counter and was read as a unit of kilowatt power so Mr Corbett’s 177 kilowatts had been recorded as 1770.

Memo to staff trainers: meter readers need to know which numbers they are supposed to read and record.

Still No Crisis?

Hawea people are losing patience  with the Government’s refusal to admit there’s a power crisis.

The Government must bite the bullet and tell the nation to make a 10% savings on power or endure public shame if it is not achieved, the Lake Hawea Community Association chairman Errol Carr says.

Lake Hawea residents are on high alert as Contact Energy begins this week to draw down Lake Hawea to the emergency level of 336m for the first time in 20 years.

Mr Carr said the lake level was stable at about 338.1, but a public demonstration was likely if residents’ concerns about low lake levels and environmental damage were not heeded.

“If told, I think the South Island would buckle in and do what they can. The Government is saying there is no crisis, but why are we going to emergency generation?”

Because it’s election year and Labour doesn’t want power cuts.

Lower South Island residents have saved the lowest percentage of electricity, recording 3.2%, according to Transpower statistics.

Upper South Island residents have saved the highest percentage nationally, at 4.1%, and the national average savings is 3.6%.

I don’t know how much power is the difference between 3.2%, 3.6% and 4.1%, nor why the Upper South Island beats the national average. – But it’s easy to explain why savings are lower in the lower south: it’s winter, and the further south you go the colder you get. Here,  around the 45th paraellel, yesterday’s frost still hasn’t thawed from shady places and it’s only .5 degrees outside right now.

Mr Carr said while he did not want older people and those with limited heating sources to suffer, the national average was “pretty mediocre” and there was a lot more that could be done.

He attributed the Government’s reluctance to take leadership to a desire to avoid bad news during an election year.

“We would like to see the Government telling the country there is a problem,” Mr Carr said.

And I’d like to see the Government explaining to the country why there is a problem.

Feeling the heat

Kathryn Ryan wore a sleeveless dress on Agenda  this morning while I  watched, still feeling cold in three layers of merino clothing.

Is it really that hot under the lights in a TV studio, or could TVNZ turn down the heating and save enough power to let the rest of us choose our own lightbulbs?

Exporting Industry Saves Power

The Listener  asks why manufacturers have had to cut production in four of the last seven years.

If there is a silver lining in New Zealand manufacturers packing up and shifting offshore, it must be that some other country has to provide their electricity. Right now, it seems certain that if we manufactured rather than imported many of the products we depend on, the current electricity generation capacity would fall far short.

The Bluff aluminium smelter reports it cut production by nearly 300 tonnes last month in response to the record highs reached on the electricity spot market. Similarly, Pan Pac pulp and paper mill in Napier reported it had shut down three of its five pulping machines.

This indicates the spot market is working properly – it is deterring consumers when prices reveal a risk to supply. But what sort of economy do we claim to have when in four years out of the past seven some of our biggest industrial companies have had to cut production for fear the electricity will run out?

We’re supposed to have a first world economy. But exporting industry and the jobs which go with it should be a long way down the list of strategies for saving power in a first world country.

This can hardly inspire overseas investment. But it is not only the economic picture that looks tarnished when the electricity situation is closely examined. The clean, green brand takes a hit too. For example, the start of this year has seen the most electricity ever produced by gas-fired stations in a March quarter.

The March quarter covers summer for at least part of which hydro lakes should be at their peak because of the snow melt, so why didn’t we have enough generation to meet demand then?

Demand has increased – more poeple, more electrical appliances and a lot more irrigators – our summer power bill is tens of thousands of dollar because of irrigation.

But in a first world country capcity should expand to meet demand. The expensive and torturous RMA process is one reason it hasn’t – a farmer I know has spent more than two years and hundreds of thousands of dollars getting consent for a private hydro scheme, on his own property, which will provide enough power for more than 1000 homes.

 

Yes, Yes, Yes, No Crisis

Is this the Clayton’s crisis – the one we have when we’re not having one?

 

Energy Minister David Parker  says we’re not having one:

 But Transpower CE Patrick Strange  says there is.

“We as an industry are very concerned. We are risk averse, so things concern us….it is serious when we call on New Zealanders to be prudent with their [power] use. For the electricity industry, we call that serious.”

 

At a meet the candidates meeting when he was first seeking election in Otago in 2002 Parker said one of the reasons he was standing for Labour was because of Max Bradford’s power reforms.

 

When questioned at another meeting when he was an MP about why he hadn’t done anything to change the system he was so opposed to he said something to the effect that once something was entrenched it was too hard to change.

 

 He has a point there, sometimes when a policy is embedded it is difficult – for practical or political reasons – to do much about it and it becomes one of those dead rats MPs and their parties have to swallow. That is the reasoning National is giving for agreeing to continue with interest-free student loans – there would be no real practical impediment to changing the policy but it would do too much harm politically to even contemplate it.

 

 The power system is different – it was a very unpopular policy when it was introduced and if anything it’s even more unpopular now.

 

 The idea of competition might offer consumers choice in theory, but in practice it’s too much hassle to exercise that choice and change your energy supplier unless you’re really, really unhappy. Even there what do you gain when you get six from one and half a dozen from the other?

 

 The other flaw is that the companies are businesses which need to make profits which they do by selling power. There is nothing wrong with profits and a profit motive but power companies make a profit more easily when demand is high because the price goes up so there is absolutely no incentive for them to encourage conservation or alternative generation. The more profit they make, the better the dividend the Government receives from its SOEs so its desire to avoid the political consequences of power shortages conflicts with its desire/need to receive more money.

 

 And let’s not forget there’s an election soon.

 

The Government is understood to be concerned that the elderly in particular may panic and try to conserve power at the expense of their health. It also does not want to be responsible for telling voters in an election year that they must cut their consumption.

Parker yesterday denied downplaying the situation, saying the Government had been “absolutely transparent” about the hydro-lake levels.

He admitted politics did play a part. “I suppose politics is involved in everything in an election year.”

[Update: Truthseekernz opines that the marekt model isn’t working and points to energy consultant Bryan Leyland saying the market system has cost consumers $7b over 10 years.

 

And Keeping Stock comments on the irony of power companies campaigning for power savings.]

Trust Power Counters Sydney

Graeme Purches, community relations manager for Trust Power counters Grahame Sydney’s criticism of Project Hayes   which I commented on here.

Purches says Sydney’s figures about wind strength are wrong and I suspect he’s right if only because it would be stupid to go to the expense of building a wind farm if there wasn’t enough wind to make it viable. However, he makes no comment on Sydney’s contention that self sufficiency and micro generation would be better than large-scale wind generation.

Power Cut Practice

There is never a convenient time for the power to go off but there are less inconvenient times than Sunday evening when I’m cooking dinner for six. The lights and everything else electric went off four times within half an hour from just after 6pm yesterday. Each time the power came back on within a minute or two but at about 10.15 everything went off and stayed off.

We’ve been having strong nor westers which might have been the cause of the problem, or maybe it was just to let us practise for what will happen if the hydro lakes don’t fill and voluntary savings  don’t conserve enough to stave off black outs.

More power or more carbon?

After 36 hours of nor westers the wind has swung to the south and it’s raining. I don’t know what’s happening at the hyrdo lakes which are about 50 kms further inland from here, but friends at Millers Flat report 3 inches of snow.

However, the rain means its colder and I’m having one of those what do you do if you see an endangered insect eating an endangered plant? conundrums.

Do I ignore calls to save power and use the electric heater, or forget about trying to reduce my carbon footprint and light the fire?

First world power supply

We’re just four weeks away from major power shortages unless the hydro lakes get topped up.

Auckland Regional Council deputy chairman Michael Barnett said he did not think Civil Defence was over-reacting.

“I’m thinking of an exporter … ” said Mr Barnett, who is also Auckland Chamber of Commerce chief executive. “Is he talking to his clients offshore today about his June-July deliveries and saying, ‘You will have to wait until I see if the village generator is working that week’? That to me is a nonsense.”

 Oh dear. We’ve had strong nor westers since yesterday morning which usually means precipitation in the mountains, but at this time of year that’s much more likely to be snow than rain.

Sydney seeks self sufficiency and microgeneration

  

Grahame Sydney  puts the case for microgeneration and self-sufficiency as the solution to our energy needs.

 We’re learning how little control we have over two of our renewables, water and wind: security of supply is never certain. 

 And not just with renewables, a fault which has closed the Otahuhu B power station is expected to take up to four days to fix.

  If Nature refuses to comply – in this case blow steadily – when the market demands it, wind generation, like hydro generation in a dry year, will be treacherous and unreliable, and of scant value to consumers. Large-scale schemes only multiply the problem. If we must have a wind component, let it be in already modified or semi-industrialised landscapes – in the “grey belts”, not the green; on community-need scale and close to demand.

 The Save Central  support group has been established to muster financial support for the Environment Court appeals against Meridian’s monster Project Hayes, but also beyond that immediate task to stir public interest and informed debate about the nation’s woefully ad hoc energy strategy.

 There are many other alternatives to this Think Big degradation of our treasured landscapes … Our best energy security lies not with massive schemes which depend on undependable nature, but with a solid foundation of proven base-load generation, and an additional structure of other sources.

 

 Sydney suggests geothermal resources, tidal energy, combined cycle plants using gas and geothermal power. He also notes the hypocrisy of exporting coal to countries which haven’t signed up to Kyoto.

 

 The increased incentive for domestic users to install solar water heating is another welcome sign that energy conservation by homeowners can make a difference, but it must go much further than that: a recent government-backed report in Britain says that with changed policies to encourage microgeneration, the number of homes producing their own clean energy could multiply to one million within 12 years, save enough CO2 emissions by 2030 as taking all trucks and buses off British roads, and produce enough power to replace five nuclear stations.

 The Conservative Party …has policies aimed at a “decentralised energy revolution”, enabling factories, schools, hospitals and households to generate their own electricity through independent solar and micro wind. It might not suit the major generators, but a like policy in New Zealand would be something to be proud of.

 

 That is the problem with our system – the energy companies have no incentive to encourage independent generation and because they’re SOE’s the Government doesn’t either because that would reduce the dividends it receives.

 Fifteen European countries have “feed-in tariffs” which pay householders for feeding the electricity they produce from microgeneration (e.g. photovoltaic cells) into the national grid. Consequently, 130,000 German homes have solar photovoltaic cells, encouraged by generous government installation grants. It would not be difficult here, but where is the political will? This is what the Greens ought to champion, if the Government will not.

 

 Why only the Greens? Security of supply trhough increased generation and the financial and environmental benefits of self-sufficiency cross political boundaries.

 

 

Within two decades, other technologies under development now will be market-viable: utility solar towers (being developed in the United States), pelamis ocean swell technology, and ceto wave power, to name only three. All, or any one, may come through as highly efficient, and make the sacrifice of the Lammermoors and other valued landscapes even more regrettable.

 

 

 Sydney explores the pros and cons of nuclear generation but concludes New Zealand is probably too small and the anti nuclear political mindset would take years to change.

 

 

 All energy schemes have negative impacts, and opinions will always vary over which are least damaging, which are most preferable. It’s a question of how you want this country to look, and how you want it to behave. If the nation wants endless supplies of energy to be provided and its undisciplined energy consumption to grow exponentially regardless of the cost to both consumer and landscapes, then we carry on the present path.

 But I suggest there are other, better ways: with the right incentives, New Zealand could lead the world in microgeneration and self-sufficiency; we could champion renewable schemes which do not depend on fickle nature, but utilise dependable base-load resources; we could retain the unspoiled landscapes as we know and admire them for generations ahead; we could learn lessons from the ugly mistakes of other countries, not repeat them; and we should reclaim the energy industry as an essential service, like health and education, and dissolve the present subdivided, competitive format which has failed so spectacularly, to the detriment of all consumers.

New Zealand could and should be thinking carefully about the consequences of decisions made too hastily, taking us on yet another doomed Think Big strategy which fails to live up to the many promises made to usher it in.

 I thought the opposition to wind generation in Central Otago was nimbyism but I am beginning to support some of the arguments against the proposal not least the sense of locating generation as near as possible to where it’s needed.

 

 I haven’t found a definitive answer to the question of how much energy is lost in transmission but the lowest figure I’ve been given is 20%. Even if it’s half that, it’s silly to waste 10% of what’s generated all day, every day sending power thousands of kilometres from where it’s produced to where it’s used.

 Supporters say more power is needed in the south and cite examples of the Cook Strait cable being used to get power from the North Island as well as too it. I am not sure if that would be needed if water had been conserved in hydro lakes instead of being used for generating power to send north earlier.

 If we want a first world economy, and I do, then we need first world energy supplies. I don’t object to wind generators in general, and I don’t think I’d object if some of the windy hills we own could be used for it. But I am not entirely convinced that the Lammermoor Range is the best place for it.