Confidence in security of power supply dashed

Confidence in security of power supply dashed

The indicative wholesale price of power at Haywards spiked to $15.52 a unit this morning dashing hopes that its price would remain reasonably stable until new generation capacity is installed. The spot price spike followed hard on the heels of an earlier one on February 4th.

"Early publication of spot prices alerts large power users to shut down plant or pay dearly for their electricity," said Alasdair Thompson, chief executive of the Employers & Manufacturers Association (Northern).

"Unfortunately large users increasingly find they have to pay huge prices for power as they simply cannot shut down fast enough to avoid price spikes on the spot market.

"Today's price spike again emphasises the urgency of our power generation deficit.

"While we welcome Government's announcement yesterday that it is to amend the Resource Management Act to give priority to renewable energy, renewables alone are unlikely to provide for all our growing power needs.

"The changes to the RMA should be broadened to include all energy generation methods. Other changes urgently needed include:

* ensure residual Maui gas is extracted

* continue to promote exploration and development of petroleum resources

* regulate gas transmission

* require Transpower to remove transmission constraints

* encourage private business power generation by removing barriers

* widen the criteria for access to the Negotiated Greenhouse Agreements for new investment.

"Government must take early action to provide new power capacity lest business and investor confidence are undermined."

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