The Herald takes a walk through Huntly Power Station. Video / Michael Craig
Nearly half of respondents are more concerned about power bills than last year, a poll reveals.
Shane Jones criticises gentailers for not offering affordable power or security, calling them a handbrake on growth.
And 69% believe the Government isn’t doing enough to reduce electricity prices, with 49% supporting breaking up gentailers.
Nearly half of New Zealanders feel more concerned about their power bill than this time last year and believe breaking up the electricity gentailers could improve competition, new poll results obtained by the Herald reveal.
Energy Minister Simon Watts says he recognises that concern and acknowledges “energy prices haveadded real pressure to household budgets at a time when the cost of living is already biting hard”.
Meanwhile, his Associate Minister Shane Jones, has continued his criticisms of the gentailers, telling the Herald they do not offer affordable power or security for New Zealanders and represent a handbrake on economic growth.
““...I can’t believe, even in my lifetime, I’d see it this bad,” Jones said in an interview about power prices and the poll results.
The NZ First MP also believes too much emphasis has been placed on decreasing emissions “to the detriment of jobs, affordability and quality of life”.
“Quite frankly, I’ve had a gutsful of all this 2050, zero talk anyway. We will deal with that next year in our election campaign.”
Nearly half of Kiwis are more concerned about power prices than a year ago. Photo / Bevan Conley.
The Herald has obtained results from a poll commissioned by Octopus Energy and conducted by Curia this month, which asked New Zealanders if their power bill was less of a concern than this time last year, more of a concern, or at the same level.
Of the near-1000 respondents, 46% said it was more than a concern, 39% said it was the same, and just 8% were less concerned. The rest were unsure.
A large group – 69% of respondents – believe the Government is not doing enough to bring down electricity prices, compared to 13% who believe it is and 18% who don’t know.
The results also reveal 67% believe the profits being made by electricity companies are unreasonably high, while 13% believe they are reasonable and 20% are unsure.
The poll also checked whether New Zealanders think competition could be improved if the Government broke up electricity companies that are both generators and retailers (gentailers), by requiring them to separate their two arms.
The results show 49% of people support breaking up the gentailers, compared to 16% who don’t agree. The remainder, 35% were unsure.
New Zealand’s energy costs soared last winter amid low hydro-lake levels, a lack of wind and sun, and what the Government said was an inadequate supply of natural gas.
Energy Minister Simon Watts acknowledges the concern about power prices. Photo / Alex Burton.
Watts, the Energy Minister, told the Herald that he understood New Zealanders’ concern with power prices.
He believed the Government was “taking tangible, practical steps to restore electricity security and drive down power prices”.
He said confidence in the energy sector was damaged by the previous Government.
“We’ve already released a new Government Policy Statement on electricity,” Watts said.
“It sets a clear direction for a reliable, low-emissions electricity system that supports private investment in renewable generation and empowers consumers through better technology and choice.”
He said other initiatives would remove barriers to investment and improve supply, such as fast-track consenting, repealing the offshore oil and gas ban, and making it easier to use gas when renewable generation is low.
‘Not offering affordable power’
Jones, the Associate Energy Minister, has been vocal over the past year about the need for stronger action to tackle power prices.
Speaking to the Herald about the poll results, Jones also acknowledged the “escalating anxiety”.
“The data that we’re talking about reflects what I’m hearing from industrial clients and garden variety Kiwis,” he said.
“I know that we’re on a journey to decrease the negative emissions associated with the power sector, but I feel too much accent has been placed upon those factors to the detriment of jobs, affordability and quality of life in terms of how important electricity is to garden variety Kiwis.”
He said it was his view, and that of NZ First, that the gentailers represented a handbrake to the growth of the economy.
“In my view, the gentailers are not offering affordable power. They are not offering power security,” Jones said.
“The gentailers have not developed an expanded envelope of supply.”
He said the gentailers have “no incentives to actually bring down the price of power and enable us to actually accelerate the growth of our economy”.
Contact said last week that it came in light of the “lowest first-quarter national hydro inflows on record and continued dwindling upstream gas supplies”.
Shane Jones is not backing down in his criticisms of gentailers. Photo / Mark Mitchell
Jones said he was “buoyed” by comments from the Prime Minister and Watts suggesting they were open to looking at all options.
“I’ve now got a backbone in our political community of support to ensure that the dissembling that characterises the gentailers doesn’t continue.
“We have got a more motivated [Electricity Authority], they are working more closely with [chair John Small] from the Commerce Commission.”
Jones mentioned the electricity market review that’s under way and said the Government would wait to hear back from that before deciding what it could do with the gentailers.
“I’m told that consultants who have been composing that report have done a full round of discussions and interviews with all key stakeholders in the industry,” he said.
“[I’m] very hopeful that it’ll bring back some key interventions.”
Watts told the Herald separately that the review was “considering whether changes to market structure might be necessary”.
“But we need to be clear: prices are rising primarily because security of supply has been tightening. When the wind isn’t blowing, the sun isn’t shining, and hydro lakes are low, we simply don’t have enough flexible, firm generation available.
“Changing ownership of existing assets won’t solve that fundamental issue. What we need is more investment in new generation and infrastructure, and more fuel diversity to secure supply in dry or still periods.
“That’s why our focus is on restoring investment confidence, enabling renewable development, and securing enough flexible energy, particularly through gas as a transition fuel, to keep the system stable and prices in check.”
Jones said successive Governments have “not done enough” to address structural issues. He didn’t want to be a politician who “didn’t do much of anything” in that regard.
“The power sector is trying to improve matters, in fairness to them. I think the change of attitude is due to my rhetoric and leadership that we’re now bringing to this issue.”
He said he wouldn’t be backing down.
“I was mandated by my caucus to never ever give up on the narrative that affordable and secure energy is at the base of our economic viability as a sovereign nation state.”
Dr Megan Woods says the Government isn't doing what it needs to, to address rising power prices. Photo / Alex Cairns
‘Actively not doing what it needs to’
Labour’s energy spokeswoman Megan Woods rejected that the Government was taking steps to bring down power prices, saying it was “actively not doing what it needs to”, and that meant addressing storage.
“One of the critical things that keeps electricity prices high is the cost of peaking. At the moment, we store energy in the form of coal and gas, and all other electricity is priced at the most expensive unit of production.
“At the moment, the marginal cost of electricity is set by burning expensive fossil fuels. Until we stop doing that, electricity prices will remain high.”
She said battery storage work, like that the previous Government was doing as part of the New Zealand Battery Project, was essential. The current Government cancelled the Lake Onslow option, but Woods said there are other renewable energy storage options.
The Labour MP also said the New Zealand Electricity Strategy, which is meant to outline the Government’s role in creating a modern and affordable energy system, is “gathering dust on the minister’s desk”.
“One of the critical things that we need to do, what everybody I’m talking to wants to see, which is long-term strategic planning for New Zealand,” she said.
That involved “getting away from political hyperbole and rhetoric around what we’re going to do to solve the energy crisis, with Shane Jones thinking it’s part of the culture wars, rather than having a thought-out strategy around what New Zealand needs to do”.
Waiting for the electricity market review to report back meant sitting through another winter with little action, Woods said.
She said Labour was willing to look at options around the gentailers’ structure.
“If that is the solution, absolutely not opposed to it, but what we absolutely have to do is make sure we’ve got the other work going on.
“It’s very easy for politicians to sit there and say we’re going to break up the gentailers and not be doing the work they need to do around storage [and] strategies.”
Asked about Woods’ comments on renewable storage, Jones said he had just met representatives of a company called Neoen that operates renewable energy assets in Australia and has recently launched in New Zealand.
“I’m going to encourage battery storage and encourage renewables, but not to the point where we falsely believe that we can get away from coal and gas,” he said.
“I expect to see coal and gas as part of the New Zealand equation, if it represents affordability and security, well beyond 2050.
“[NZ First leader Winston Peters] has already said that next year that changes to the trajectory we’re on with our international climate obligation, we have to take that to the electorate.”
In his March State of the Nation speech, Peters said a “revaluation” of New Zealand’s commitment to the Paris Agreement in 2016 was necessary.
“Why are we making a rod for our own backs, punishing our farmers and our taxpayers and our economy, when China or the US could sneeze and produce more CO2 overnight than we do in a year? How is that solving the “global climate problems?”
There were 1000 respondents to the Octopus Energy-commissioned Curia poll, taken between April 30 and May 4. Based on this sample, the maximum sampling error (for a result of 50%) is +/- 3.1%, at the 95% confidence level.
Jamie Ensor is a political reporter in the NZ Herald Press Gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub Press Gallery office.
