The energy industry is in deep distress, searching for a solution to a nationwide gas shortage.
The major electricity companies’ scramble for fuel to bridge the energy shortfall has had some success, but the price is that one of New Zealand’s largest gas users, Methanex, has to shut down until October.
After weeks of talks, Contact Energy and Genesis Energy announced they had securedlarge amounts of gas – 3.5 petajoules and 3.2PJ, respectively – to keep their gas-fired electricity units operating until then.
This will temporarily solve part of the fuel problem, which is caused by a shortage of gas, low wind and hydro lakes. It has caused a rapid and sustained rise in wholesale electricity prices to unprecedented levels.
This, in turn, has forced several businesses exposed to the wholesale spot price to shutter operations or even consider closure.
Electricity system operator Transpower is also working urgently on a rule change to allow hydro operators more access to water in their dams.
Contact chief executive Mike Fuge said the deal with Methanex was equivalent to about 350 gigawatt hours of electricity.
Rich Sumner, president and CEO of Methanex’s global operations, said his company’s bottom line would not be affected by the temporary idling of methanol production in NZ.
