Think Big - Regenerated?
The Government's premature decision to invest in a reserve electricity generation plant on Contact Energy's Whirinaki
site smacks of 'Think Big', says Federated Farmers National Vice President Charlie Pedersen.
"Previous Government forays into electricity generation led to either significant shortage of power or embarrassing
surpluses which were sold off at discounted prices to industry on long-term guaranteed contracts.
"Rather than expose taxpayers to unnecessary costs, the Government should allow generators to provide the necessary
generation capacity based on sound commercial principles.
"Given that New Zealand generation capacity is still heavily reliant on hydro capacity, it is inevitable that there will
be increases in the spot price of electricity in dry years. This in itself is important in sending generators signals
about the viability of investing in further capacity.
"Consumers are in the best position to determine what risks they are prepared to accept rather than being told 'big
brother knows best'.
"The Government should not expose consumers to significant costs without looking at alternative mechanisms to mitigate
the impacts of '1 in 60' year dry conditions.
"It is unlikely that a cost/benefit analysis of the Government's proposal to procure '1 in 60' dry year capacity stacks
up against alternative risk minimisation strategies such as the recent 'Target 10%' campaign."