Energy strategy triggers more alarm

Wednesday, October 17th, 2007

Energy strategy triggers more alarm

Government's advice to its SOE power generators not to develop any new base load thermal generation is a return to the bad old days when SOE's were government departments and used to steer the economy, the Employers & Manufacturers Association (Northern) points out.

"If government wants no more investment in gas fired power stations it should pass legislation banning them, not start directing SOE's decision making," said Bruce Goldsworthy, EMA's advocacy manager.

"The ban would have to apply equally to private as well as state owned power companies, and that would be disastrous for investment in business and the economy.

"Aside from calling a halt to petroleum exploration such a ban would severely undermine the security of electricity supply for the whole country, and Auckland in particular.

"The ban would also add to the cost of power as we became more dependent on expensive and less reliable options such as wind.

"Auckland is particularly vulnerable since there is little generation close by the city with a high dependence on transmission lines.

"Transmission adds further risk factors, for example when an outage occurs it takes longer to fix than if a local power station is nearby. In this regard Auckland is more vulnerable than most cities of a comparable size anywhere.

"In summary the government's proposed ban on new base load thermal diminishes the diversity of power supply into Auckland thereby increasing the risk of shortages and raising delivered power costs.

"None of this bodes well for Auckland's economic growth or that of the country."

ENDS

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