Government to blame for electricity shortages

Government to blame for electricity shortages

Four years is long enough to understand the deficiencies of electricity generation and supply and make the necessary incremental changes to ensure power shortages don't occur, the Employers & Manufacturers Association (Northern) says.

"Government has to take responsibility for not addressing the deficiencies of the electricity market before now," said EMA chief executive, Alasdair Thompson.

"Government has the power to require its SOE's to stockpile coal or build reserve generation capacity provided that, if it does so, it compensates the SOE for activities that are non-commercial.

"Government has failed miserably to incrementally improve the electricity market over the past few years.

"Ordinary homeowners are just as fed up as business is.

"We welcome the Prime Minister's assurances that reforms to make the electricity market work smoothly are on the way, but we don't understand why it has taken so long.

"We have expressed alarm about electricity since before the 2001 crisis.

"Since then business has made many well researched recommendations to Energy Minister Peter Hodgson, but until recently they fell on deaf ears.

For the record we have repeatedly called for:

* The early establishment with the industry of a central strategic energy. planning function (not central government planning, but central planning by the industry facilitated by government).

* Ensuring residual Maui gas is fully extracted.

* Increasing the promotion of oil and gas exploration and development.

* Ensuring gas pipeline transmission systems are open to all suppliers.

* Changing the RMA to reduce time from generation to supply.

* Use coal in the short term.

* Require Transpower to invest in removing transmission constraints. An efficient and unconstrained grid is important for a competitive market.

* Requiring the return of loss and constraint rentals to source regions.

* Encouraging private sector, small scale and embedded generation to boost demand side participation and demand management.

* Seek real time spot market pricing.

* Either deal with vertical integration or require mandatory hedge volumes to be made available through a hedge market.

* Require generator/retailers to respond with a price, and if prices offered are seen to be too high, then call in the Commerce Commission to investigate.

* Establish an efficient (gas) fuels market.

"Our concern is that now, after four years of doing nothing, the Government will throw its toys away, abandon incremental reform, and start moving towards centralised control of the electricity industry."

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