The high cost of blinkered approach to energy policy

03 October 2018

“The current electricity market is not fit for purpose and every day that passes kiwi households, the country, and the climate are paying the cost,” says Brendan Winitana, SEANZ Chairman.

The comments were made following the SEANZ (Sustainable Energy Association NZ) Conference, Tomorrow’s Energy Today. Industry leaders revealed data and case studies at the conference to prove that solar and batteries are lowering electricity costs for consumers and providing a net benefit to the electricity network, improving network security and resilience, and lowering carbon emissions.

Mr Winitana says: “Two recent reports highlight the ways in which kiwi households are subsidising the incumbent electricity industry through excessive power prices.

“The recent report by Dr Stephen Poletti from the University of Auckland Business School identified $5.4 billion in excess profits by power generators between 2010 and 2016. Those funds could have installed solar and batteries and cut electricity prices for 700,000 kiwi households - 2.1 times the output of Huntly Power Station.

“The Government’s recent Electricity Review report detailed how the sharply increasing cost of electricity is driving more kiwi households into energy poverty. The report highlighted that increased numbers of retailers is not increasing competition or lowering prices.

“Rather than providing a subsidy to power companies in the form of the winter energy payment, the $300 million per year could be used to fix electricity prices by installing solar on 40,000 roofs to support low-income households and the over 65’s. That's a better solution than handing out taxpayers money which may or may not be used for excessive power bills.

“Kiwi households are paying the cost of an outdated and inefficient electricity market structure and there seems little political will to start embracing the solutions that are staring us in the face.

“Regulation to open access to distribution networks and allow new technologies and new business models to compete is paramount to helping lower grid operating costs and enabling lower priced electricity to all New Zealanders.

“The value of solar, batteries and home energy management systems to the grid is yet to be acknowledged by the government, the incumbent industry, and their cheerleaders despite the evidence.

“A truly competitive market will enable the benefits of mini and micro-grids with embedded generation and storage and market mechanisms such as peer-to-peer trading, to benefit all electricity consumers.

"We need to redesign the market so there is a greater emphasis on all Kiwis paying less for electricity," Mr Winitana said.

ENDS

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