Government Policy Statement For Affordable Electricity A Step In The Right Direction

“It’s great to see a focus from the government on enabling workable competition, supporting a level playing field and innovative technology in the electricity market,” says Octopus Energy NZ Chief Operating Officer Margaret Cooney.

“One indicator of whether competition in the wholesale electricity market is effective is how closely the wholesale price of electricity compares to the long run marginal costs of new generation. Since 2018 wholesale electricity contracts have risen significantly above this cost signalling a market that is not working well.

“There needs to be a renewed focus on how the market is delivering for energy consumers big and small, and supports a lower cost and more productive economy. At a time when we need businesses and households to be shifting more of their energy usage to electricity, the market has instead been sending a signal not to.

“The commitment to effective competition from the Minister is reassuring. The Electricity Authority (EA) needs to work at speed to make sure the market settings are changed to deliver a workably competitive market. Many of the changes needed have been identified in successive reviews.

“We're on track for a big increase in electricity costs for households and businesses over the next two years, time is ticking for the EA to make the changes needed to course correct the market. Without them the electricity market has the potential to tip the economy.

“The Minister will need to keep a close eye on what the EA does and be prepared to intervene if things are not sorted, for the benefit of the economy, industry, and consumers.

“Innovative solutions can help us fill the energy gap, especially in the short term. Here at Octopus we are focused on making the benefits of consumer side technology available and rewarding customers in return, allowing the whole system to benefit.

“Consumer flexibility drives down the cost of the energy system by at least 5%, and also allows us to integrate intermittent renewable generation more quickly and cost effectively.

“We have the technology to remotely automate energy usage when electricity is cheap and abundant, and rooftop solar and home batteries are becoming more accessible. There is increasing opportunity for consumers to play a central role in a lower cost electricity system

“To address the underlying challenge of continuing high prices New Zealand also needs more generation, but without the regulatory change to support better competition and investment in generation this will not happen,” says Margaret Cooney.

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