Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


NZ Power Ticks the Boxes

NZ Power Ticks the Boxes

The NZ Power announcement proposes changes and regulation in the electricity market that are a positive move  towards addressing long standing issues in our electricity market after the Bradford reforms in 1998, say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “In 2006 we researched and produced a report “Will it take more Blackouts before we see the light?” that considered the electricity supply issues in New Zealand.  This research was sparked early in the last decade due to our growing concerns of supply stability and cost of electricity.  We identified three main concerns with the current system:

1. The cost impact of the long run marginal cost model.
2. An incentive for generators to game the system.
3. A system bias to build new generation late and in small increments.

“The NZ Power proposals go a long way to addressing our concerns, it has taken a while, but better late than never.”

“The single buyer, average cost model does not have the same opportunity for gaming as it pays the generator a fair price based on the cost of supply and can ensure all low cost supply is in the market.”

“There is no doubt that prices will fall.”

“In supply terms the incentives change from small incremental increases in generation, to larger increments of generation.  The single buyer operating an average costs system is not incentivised to keeping the highest cost suppliers in the market.”

“The NZ Power proposal addresses our long held concerns about the New Zealand electricity supply system.  Manufacturing exporters are under severe cost and margin pressure; it would be good to see some comparative advantage against our trading partners for once.”

“It is worth noting that many large industrial users buy at close to a margin over actual cost but most small to medium users are disadvantaged by the current marginal cost model.”

“Lower domestic electricity costs mean more domestic demand for other consumption, which would be beneficial to those selling into the domestic market.”


© Scoop Media

Business Headlines | Sci-Tech Headlines


Rocket Lab: Launch Expected

Rocket Lab has delayed the roll out of the launch vehicle called Electron by one day, due to weather conditions. The planned launch attempt will now take place on Tuesday, May 23, 2017. More>>


Budget: Irrigate (Good Times, Come On!)

Additional grant funding of $26.7 million over the next three years plus a capital boost of $63 million towards irrigation investments in Budget 2017 will deliver economic and environmental benefits through better use of water... More>>


Silver Fern Farms: Proposal To Close Fairton Sheepmeat Plant

Silver Fern Farms has advised its people of the proposal to permanently close the site, and has discussed potential transfer options to its other sites in the region as part of the consultation process...


MPI: Myrtle Rust Appears In Taranaki

The nursery in Waitara (just north of New Plymouth) reported suspected myrtle rust symptoms on young plants to the Ministry’s 0800 number yesterday (Tuesday). More>>