New Zealand is most vulnerable to blackouts when the temperature drops. Photo / Getty Images
New Zealand is most vulnerable to blackouts when the temperature drops. Photo / Getty Images
A vocal member of the energy sector has described Transpower's latest warning of nationwide blackouts as a case of "groundhog day".
"It's almost a year since August 9th when we had a major power cut and more than 30,000 people were in a blackout," Electric Kiwi chief executive target="_blank">Luke Blincoe told the Front Page podcast.
"Interestingly, the Electricity Authority will provide a decision on that particular event this week. It's very timely, but it's effectively a little bit of Groundhog Day."
The day after that warning, 10,000 homes in Ōtorohanga, Waitomo and Te Kuiti were left without power due to a rare instance of birdstrike.
Blincoe says there's very little that can be done to stop this type of unusual event from occurring.
"This is just a reality for New Zealand," he says.
"We're a long, thin country with a long spindly transmission network, which means we do have multiple points of vulnerability. The alternative would be to have two sets of poles and wires all the way across the country, but this would lead to massive redundancy. [This incident] is no different than having a car hit the power pole outside your house. You will, unfortunately, end up having a blackout."
Blincoe does, however, believe more can be done when it comes to the notion that we don't generate enough power to meet the demands of our population in the colder months.
"The [power] generators are really incentivised to run the system as tight as possible to keep prices firm. So we'll always have this sense of scarcity."
Blincoe isn't alone in this view. Last year, in an Electricity Authority report chief executive James Stevenson-Wallace said power firms could have an incentive to delay investment in new generation to maximise return.
More recently, major businesses NZ Steel, Fonterra and Winstone Pulp criticised the Electricity Authority for failing to address the shortcomings of the electricity market properly.
The big power generators have long pointed to other problems to explain energy shortages.
The power cuts last year were blamed on problems with wind farms and hydroelectric sources of power.
A similar excuse emerged in the latest Transpower warning, with the blame being placed on a drop in generation from three sources.
Regardless of where the blame lies, we've now seen the risk emerge again during the coldest period of the year.
Unless something changes, it seems likely that the risk of blackouts will continue in the future.
"We lost 30,000 houses to Waikato last winter and that was on the coldest evening of the year," says Blincoe.
"In New Zealand, our peak usage is winter evenings, when people are heating their houses and using hot water. Your hot water cylinder is probably the single biggest appliance you run in the house, but most people aren't aware of it."
These issues are only set to increase as more electric vehicles are plugged into the grid. A survey out recently suggested that 49 per cent of New Zealand car buyers intend to purchase a fully electric, plug-in hybrid or hybrid car.
So will the country be able to cope with this surge in demand in the coming years if we're already struggling?
"We do have enough generation capacity based on what's planned and consented in New Zealand," says Blincoe.
"We're not short of natural resources for electricity generation and renewable generation, so that shouldn't be a barrier if the incentives and market structures are right."
The coming years will ultimately determine whether enough is being done to keep up with that demand.
In addition to facing the prospect of potential blackouts, New Zealand families also face incredibly high power costs. The Electricity Authority report suggested families were paying as much as $200 a year more than they should be.
Asked whether New Zealand's poor housing standards and a lack of sufficient insulation were to blame for people having to use more energy to heat their homes, Blincoe warned that we need to be careful of victim-blaming.
Electric Kiwi CEO Luke Blincoe has been outspoken about the need for reform in the electricity market. Photo / Supplied
"Vulnerable consumers of electricity don't get a choice of the housing stock that they live in. This industry has spent a considerable amount of effort, in my view, victim-blaming and saying that the reason people can't afford to heat their houses is because of the poor quality of the house.
"I acknowledge that we've got a housing quality issue, but it's really only been in the last 10 years or so that the affordability issue has come about. And that's because we aren't focusing on the fundamental issue for these people and that's the size of their bill."
Much like other critics in the sector, Blincoe says that he would like to see the Electricity Authority of the Government step in to make some changes.
"It would be preferable for the Electricity Authority to step in now and take action rather than wait for the Government to do their job for them.
"We already had an electricity market review and we've now also had the wholesale market review. So we're doing lots of reviews and finding lots of issues, but taking no action. It's just not sustainable."
