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.