Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


Electricity Proposal Represents Regulatory Instability

Opposition Electricity Proposal Represents Regulatory Instability, UC Expert Says 
 
April 30, 2013
 
A University of Canterbury (UC) electricity expert says the Labour and the Green Party electricity proposal risks regulatory instability and it would be preferable to deal with any problems the parties have identified by improvements to the existing market structure. 
 
The Opposition parties have said that, if elected next year, Labour will establish a new agency to act as a single buyer of wholesale electricity, which will have the power to set prices.
 
UC electrical engineering researcher Dr Allan Miller says the Opposition proposal is a huge change to the electricity industry which would take a great deal of resource which would not go into the productive economy. 
 
``It makes New Zealand look like an unstable country and less desirable to invest in. Companies who invest here require some certainty over electricity price and reliability and this promotes neither. 
 
``If there is something wrong with the current market - and I tend to agree with recent reports that generators have too much market power - it would be better to improve the market structure we have at present rather than embark on another huge and expensive change and one that is highly experimental.
 
`` The Opposition’s proposed New Zealand Power would not only be a single buyer of electricity, but would by default effectively be a single seller of electricity and therefore would be a monopoly. New Zealand consumers will essentially have no choice of supplier, making them worse off than they are now, under a regime where a single company knows better. 
 
``The monopoly would extract monopoly rents, because it would not have the discipline placed on it of a strongly elastic demand, created by consumer choice.  A purchasing body or collective model may work well where New Zealand is competing internationally with numerous other buyers, where the price is set internationally.
 
``However in the proposed New Zealand Power case there is only one buyer, with no competitive price setting arrangement.  It would likely be inefficient to set up such a company.
 
``Furthermore there is no evidence, as claimed in the policy document, that a “cost based price pool enables the use of smart grids which allow New Zealanders to make real-time decisions about the best way to use energy should they so choose.’’ 
 
Dr Miller has received $6.3 million of Ministry of Business, Innovation and Employment funding to investigate renewable energy and smart grids.
 
His project will contribute to a future New Zealand with greater renewable generation and improved energy security through development of a smarter, efficient, cost-effective and robust renewable electricity generation system. It proposes to do this within the existing electricity market structure.
 
``We will provide government and industry with methods for managing and balancing supply and demand variability and delivering a functional and safe distribution network in which intermittent renewable generation is a growing part of the energy supply.
 
``The result will be an efficient, cost-effective and robust electricity network meeting the ongoing and changing power supply and demand needs of New Zealanders,’’ Dr Miller says.
 
New Zealand currently generates about 75 percent of its electricity from renewable generation, making it a world-wide leader in this area.


 
Photo: Dr Allan Miller

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Parliament Today:

Werewolf: The Defence Pretence

Last year, the world began spending more money on weapons again, for the first time since 2011... New Zealand belongs to a region – Asia and Oceania – where military spending rose sharply in 2015, by 5.4 per cent. More>>

ALSO:

Gordon Campbell: On Not Crying Foul, Argentina

So a couple of guys found to be criminally liable of environmental pollution in Argentina lodge an application with the Overseas Investment Office… in order to buy some prime New Zealand rural land. Seems that their factory back home had carelessly and/or intentionally discharged toxic waste into the Lujan river. Bummer... More>>

ALSO:

Urban & Rural: $303m To Merge And Modernise New Zealand’s Fire Services

Internal Affairs Minister Peter Dunne today announced funding of $303 million over five years to combine urban and rural fire services into one organisation from mid-2017. More>>

ALSO:

High Trust Regime: What Did The PM Tell His Lawyer About Foreign Trusts?

The Government stopped the IRD from reviewing New Zealand foreign trusts shortly after the Prime Minister’s lawyer wrote to the Revenue Minister claiming John Key had promised him the regime would not be changed. More>>

ALSO:

Road Crime: Wicked Campers Vans Classified As Objectionable

The definition of publication includes any "thing that has printed or impressed upon it, or otherwise shown upon it, 1 or more (or a combination of 1 or more) images, representations, signs, statements, or words", The Classification Office has previously classified such 'things' as billboards, t-shirts, and even a drink can. This is the first time the Classification Office has classified a vehicle. More>>

ALSO:

'When New' Repairs: Landmark EQC Settlement

The Earthquake Commission has cut a deal with 98 Canterbury homeowners that affirms the government entity's responsibility to repair earthquake-damaged property to a 'when new' state, as well as covering repairs for undamaged parts of a property and clarifying its position on cash settlement calculations. More>>

ALSO:

Gordon Campbell: On Kiwirail’s Latest Stint In The Dogbox

The denigration of Kiwirail continues. The latest review (based on a 2014 assessment) of the options facing the company have enabled Kiwirail to be hung out to dry once again as a liability and burden on the taxpayer. More>>

ALSO:

Royal Society Report: Good Opportunities To Act Now On Climate Change

There are many actions New Zealand can and should take now to reduce the threat of climate change and transition to a low-carbon economy, a report released today by the Royal Society of New Zealand finds... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news