Media statement Thursday, May 29th 2008

Urgent power savings required to avert power cuts

Blackouts in the North Island are very possible, the Employers & Manufacturers Association (Northern) says, and probable in the South Island if huge power savings are not made immediately.

"Where's the sense of urgency over the power blackouts we're facing?" asked Alasdair Thompson, EMA's chief executive.

"We can see there's no political appetite for panic but the country needs leadership now to save power.

"We are calling on all our business members to make all the workplace savings possible.

"Households need to take special care with all power usage that does not jeopardize family health.

"The country is in fact facing not one but three power problems.

"The North Island has a peak demand problem - the reason for 100MW capacity at the New Plymouth plant being fired up.

"The South Island has an electricity shortage problem due to low lake levels, so is being supplied from North Island thermal plants.

"The third big problem is that as demand far exceeds supply, power prices at $300 per MW/hr are four times last year's average and expected to go higher.

"It would be even worse if the costly, carbon unfriendly Whirinaki station was not running constantly instead of as a back-up plant.

"It uses expensive diesel though it could have been set up to run on natural gas, the lowest cost fuel.

"The consequence of demand exceeding supply is that an important part of our industrial production is made uneconomic while huge windfall profits are delivered to the power generators, mainly owned by the government.

"The whole bleak scenario is unfolding against the backdrop of the government's short sighted 10 year ban on the building of new gas fired generation."

ENDS

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