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Home / New Zealand

<I>Brian Rudman:</I>The lights are (only just) on but no one's home

Brian Rudman
By Brian Rudman
Columnist·
4 May, 2003 06:15 AM5 mins to read

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If I'm going to have to shower in cold water and go to bed in the dark this winter, I want to know that those guilty for this crime are going to suffer as well.

One friend said bringing back the stocks and hurling a few rotten tomatoes would cheer him up.

But I prefer a punishment that more fits the crime and am leaning towards a public treadmill in Aotea Square, hooked up to the Sky Tower illuminations.

That way we could all check to make sure there was no malingering.

Sure, the out-of-condition politicians and power chiefs I have in mind might not manage to set many bulbs glowing, but the sight of them trying would certainly light up the day for the rest of us.

If you thought you'd seen it all during the Auckland blackout of 1998, when the four main power cables into the central business district began to fail, the present power crisis is even worse.

Here, the politicians and power bosses had the evidence of looming disaster before their very eyes and either did nothing or, worse, denied the evidence before them.

In the latter category we have Energy Minister Pete Hodgson, who last October, dismissed the warnings of energy expert Bryan Leyland as pessimistic.

"Bryan has been releasing his forecasts every two years for nearly a decade now and they always ring alarm bells," Mr Hodgson said at the New Zealand Energy Conference last year.

"There is no suggestion that New Zealand's electricity system will be unable to meet business-as-usual demand about three years from now," he reassured, adding that modelling by Transpower, the national grid operator, "suggests 2005 as the point at which the current system might have difficulty meeting demand in a seriously dry year, assuming high growth in demand".

How wrong can one be.

Unless nature comes to the minister's rescue in the next month, he and Transpower are going to have a lot of explaining to do.

In Parliament last week, Mr Hodgson said the Government had "been aware of the prospects of a shortage since the end of last year."

A Cabinet paper of November 6 last year reveals awareness back then that Maui gas supplies were running out more quickly than predicted.

So what did the minister do about it? Sit back, it seems, and examine "much-improved scenario development and modelling".

That, to be fair, is about all he could do under the existing farcical ownership set-up.

For even if a Government minister had wanted to, he could not order power generators to do anything, even though three of the four main generating companies - Mighty River, Genesis and Meridian Energy - are state owned.

Thanks to the present free enterprise system they operate in, the only instructions these generators are supposed to follow are those of the invisible hand of the market. It's profits and dividends first, even when it means the public, who own the companies, go cold and lose their jobs as a result.

If Mr Hodgson is my first candidate for the Aotea Square treadmill, Genesis chief executive Murray Jackson and his chairman, Brian Corban, are close behind.

In the 2001 winter power crisis, when lake levels were again perilously low, Genesis's 1000 megawatt, combined gas and coal-fired Huntly station saved the day by running at full power during the critical period.

This year, with Maui gas being rationed because the field is rapidly running out, the obvious safeguard would have been to secure enough coal to meet the possible winter power crisis.

Instead, what happened was state-owned Genesis and the state-owned coal miner, Solid Energy, tried to out-tough each other in negotiating a coal deal. Each was trying to maximise its profits at the other's expense in order to impress the boss - who was, in the real world - the same entity - the Crown.

As a result of the prolonged eye-balling, time ran out to get local state-owned coal mined and shipped to Huntly in time.

Instead, Mr Jackson had to scramble for coal in Indonesia and Queensland. There's widespread scepticism in Government and energy circles about how much coal will actually arrive.

Mr Jackson says he does not need the 500,000 tonnes industry sources suggest will be required to keep the power station producing at full load.

We can only hope this means he has hidden coal sources the rest of the industry knows nothing about.

Another option would be to persuade oil giant Shell, the majority owner of the Maui field, to increase Huntly's winter rations.

An emergency advance on future supplies.

Mr Hodgson says he's not one to sit back and leave it to the market. It's time he proved it.

First, he has to ensure Huntly has the fuel to run at full capacity this winter.

He could also go out on a limb and consider buying or hiring (or persuading one of his energy companies to) one or more combined cycle gas turbine generators.

I'm told they are readily available and that one generating 40MW can be procured and plugged into the national grid for around $35 million. It would at least show someone doing something other than handwringing.

His other option is to continue examining his models - and practise for his turn on the Aotea Square treadmill.

Herald Feature: Electricity

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