No single silver bullet for power crisis

No single silver bullet for power crisis

The Major Electricity Users’ Group says there is no single silver bullet that will deal with the causes of the current power crisis.

Terrence Currie, Chairman of the Major Electricity Users’ Group (MEUG), said today that businesses were concerned that the Government’s proposed solution, to be announced tomorrow, might be too narrowly focussed.

“If we deal with only one issue, namely dry year reserves, then we are likely to have another power or electricity price crisis,” Mr Currie said.

Mr Currie said other major issues that needed to be addressed included:

The structure of the electricity sector and whether vertical integration of suppliers creates barriers to entry in generation and retail and hence limits choice to small and large consumers

Annual growth in generating capacity (it is estimated that 150mw of additional generation is needed per annum service the country’s growing demand for electricity)

Impact of Kyoto agreement (and a carbon tax) on cost of current generation sources and a barrier to new thermal generation investment

Impact of Resource Management Act on selection, cost and timeframes for new generation

Renewable energy sources will not be sufficient to meet demand growth

New investment is needed in transmission

Mr Currie said the immediate risk of presenting any solution, as the answer to the country’s power problems was that the public may think the Winter 2003 power savings campaign was at an end.

“New Zealanders must not stop their current conservation and savings campaigns. Neither should we stop progress toward a full reform of all the structural issues in the electricity sector that require attention,” he said.

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