Jeanette's Plan to help solve the electricity crisis

Widespread and intelligent conservation measures are needed to reduce our electricity usage and prevent possible electricity cuts later in the year.

The question the emergency summit should address is who should do what to achieve a drop in our electricity demand.

To do that in a market system we have to look at where the incentives are, since the high spot prices do not affect all users of electricity equally:

1. All households and most businesses are not affected directly by the high prices. The only incentive they have to reduce electricity use is the risk of future blackouts. A public campaign should be initiated by EECA and the power companies to help consumers reduce their power use - so that potential blackouts are avoided.

2. Some power companies who do not have forward cover are supplying these consumers at a loss. They can reduce their losses by helping their customers cut back on the amount of electricity they use and sharing the savings. They should all be offering buy-back payments for savings (similar to the Mercury Energy scheme announced this month), and should be sending trained energy managers on to the premises of their largest business consumers to help implement the measures. They should also provide clear, simple guidance for households. It's not rocket science.

3. A few large consumers are exposed to the spot price, mainly large businesses. They cannot expect help from their supplier to reduce their use - as that would reduce the profits of the supplier. However EECA, which has a statutory duty to promote energy conservation as well as efficiency, should send advisors into those businesses. They should of course charge a modest amount for the service, as these consumers have chosen not to buy hedge contracts and therefore should be prepared to pay for the advice they need.

All this should be fully implemented before we even think of bringing in filthy, noisy, expensive diesel generators. That would be a sign of real policy failure.

Finally, this sort of crisis will continue to happen under the market we have now, because the previous government broke up the integrated generation system we used to have. In the long term, Government must impose a greater level of co-ordination and co-operation on to the wholesale market to ensure water is saved for dry periods, and Government owned generators should invest some of their extra profits in new renewables like wind and wood energy to spread the risk in future.

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