1 00:00:00,080 --> 00:00:03,320 Speaker 1: Government's given the all clear to build an Alingy import facility. 2 00:00:03,360 --> 00:00:05,720 Speaker 1: This is to help with energy security and the dry years. 3 00:00:05,720 --> 00:00:08,400 Speaker 1: It will cost north of a billion dollars hopefully be 4 00:00:08,440 --> 00:00:10,959 Speaker 1: set up in Taaramaki by next year or early twenty 5 00:00:11,000 --> 00:00:14,120 Speaker 1: twenty eight. John Carnegie is Energy Resources alte at Chieved 6 00:00:14,120 --> 00:00:15,400 Speaker 1: Executive with me this morning. John. 7 00:00:15,440 --> 00:00:19,880 Speaker 2: Good morning, Yes, good morning. Your thoughts on that, Oh, well, look, 8 00:00:19,920 --> 00:00:22,720 Speaker 2: we think it's a necessary dry year insurance policy. That's 9 00:00:22,800 --> 00:00:27,160 Speaker 2: required because New Zealand actually faces a massive fuel shortage 10 00:00:27,440 --> 00:00:31,520 Speaker 2: with lawer than anticipated domestic guest supply and the constant 11 00:00:31,680 --> 00:00:33,760 Speaker 2: risk of dry years. 12 00:00:34,479 --> 00:00:37,239 Speaker 1: Is the aling terminal the right call, though, because that 13 00:00:37,320 --> 00:00:40,599 Speaker 1: Frontier Economics report last year said it could be basically 14 00:00:40,600 --> 00:00:43,000 Speaker 1: a white elephant. You's been a billion bucks on this thing, 15 00:00:43,920 --> 00:00:45,640 Speaker 1: and then what do you do with it after? 16 00:00:46,840 --> 00:00:50,640 Speaker 2: Oh look, there's obviously a large upfront infrastructure costs of this, 17 00:00:50,800 --> 00:00:55,680 Speaker 2: but officials have assured us all that this is going 18 00:00:55,720 --> 00:00:58,520 Speaker 2: to be more than offset by the downward pressure on 19 00:00:58,680 --> 00:01:03,480 Speaker 2: future wholesale electricity prices and are reduced and will reduce 20 00:01:03,560 --> 00:01:07,600 Speaker 2: the risk premium in our years. So what this investment 21 00:01:07,680 --> 00:01:10,000 Speaker 2: will effectively do is take the heat out of the 22 00:01:10,040 --> 00:01:14,400 Speaker 2: electricity market and lower peak prices compared to those without 23 00:01:14,400 --> 00:01:17,080 Speaker 2: the investment. And of course this is great news for 24 00:01:17,160 --> 00:01:21,800 Speaker 2: anyone who cares about our major industrials, our energy intensive industries, 25 00:01:21,800 --> 00:01:25,960 Speaker 2: which will benefit from both moderated future electricity prices in 26 00:01:26,080 --> 00:01:29,600 Speaker 2: dry years and the potential availability of freed up domestic 27 00:01:29,880 --> 00:01:31,080 Speaker 2: domestic natural gas. 28 00:01:31,200 --> 00:01:34,520 Speaker 1: Will this stop the do you think will stop the 29 00:01:34,560 --> 00:01:36,320 Speaker 1: closures the plant closures? 30 00:01:37,280 --> 00:01:40,920 Speaker 2: Well, it will certainly contribute to doing that. You know, 31 00:01:41,600 --> 00:01:46,600 Speaker 2: It's certainly not a silver bullet, but that's it will 32 00:01:46,640 --> 00:01:49,280 Speaker 2: take some stress off while we work to bring more 33 00:01:49,280 --> 00:01:53,080 Speaker 2: domestic gas online in a medium term. And I think 34 00:01:53,120 --> 00:01:57,560 Speaker 2: what we know is that New Zealand's energy system will 35 00:01:57,560 --> 00:02:02,000 Speaker 2: be at its most effective when renewable generation, infirming fuels 36 00:02:02,080 --> 00:02:05,720 Speaker 2: like allergy and domestic natural guests actually work in harmony. 37 00:02:06,080 --> 00:02:10,000 Speaker 2: And we need to stop having binary good versus bad conversations. 38 00:02:10,320 --> 00:02:12,800 Speaker 2: All fuel options need to be on the table. 39 00:02:12,880 --> 00:02:15,720 Speaker 1: John, Why don't your members pay for stuff like this? 40 00:02:16,000 --> 00:02:18,800 Speaker 1: Why do we users have to pay a levy? 41 00:02:20,240 --> 00:02:23,040 Speaker 2: Yeah? Well, I mean I think the key thing is 42 00:02:23,080 --> 00:02:27,080 Speaker 2: that it's the reason the crown has a role. Here 43 00:02:27,720 --> 00:02:31,320 Speaker 2: is an acknowledgment due to the absence of cross party 44 00:02:31,360 --> 00:02:36,600 Speaker 2: support that this vital investment wouldn't actually proceed without the 45 00:02:36,600 --> 00:02:39,960 Speaker 2: Crown taking a position to secure it. So, you know, 46 00:02:40,760 --> 00:02:45,200 Speaker 2: it's just a recognition that the market risk of an 47 00:02:45,240 --> 00:02:48,360 Speaker 2: investor to come in an invest a billion dollars with 48 00:02:48,400 --> 00:02:52,840 Speaker 2: the prospect that, however, many years later, it might become 49 00:02:52,919 --> 00:02:58,680 Speaker 2: a white elephant due to government policy settings just predicates 50 00:02:58,680 --> 00:03:00,000 Speaker 2: the need for the ground to be involved. 51 00:03:00,040 --> 00:03:02,799 Speaker 1: But won't it So you're say, if because our politicians 52 00:03:02,800 --> 00:03:05,639 Speaker 1: can't agree on stuff, we're having to pay for. 53 00:03:05,600 --> 00:03:09,280 Speaker 2: It, well we'd have to pay for it anyway in 54 00:03:09,360 --> 00:03:14,200 Speaker 2: all likelihood with our declining supply of domestic gas. And 55 00:03:14,320 --> 00:03:20,000 Speaker 2: what this what the Crown's involvement is just to bring it, 56 00:03:20,160 --> 00:03:23,360 Speaker 2: to bring it forward, to provide the investor, with the 57 00:03:23,400 --> 00:03:25,240 Speaker 2: eventual investor with some comfort. 58 00:03:25,440 --> 00:03:27,320 Speaker 1: Is it not? Because does the government not have to 59 00:03:27,320 --> 00:03:30,960 Speaker 1: get involved? Because no private investor would do this, because 60 00:03:31,160 --> 00:03:34,280 Speaker 1: it will become a white elephant because our energy security 61 00:03:34,360 --> 00:03:36,800 Speaker 1: problem is a medium term not a long term one. 62 00:03:37,480 --> 00:03:40,200 Speaker 2: Oh well, lookly there are a lot of medicine butts 63 00:03:40,720 --> 00:03:44,200 Speaker 2: in their rhyme. As I said, I think what we 64 00:03:44,280 --> 00:03:45,560 Speaker 2: need system. 65 00:03:45,480 --> 00:03:49,160 Speaker 1: Jim, Can I ask you when as it stands, Yes, 66 00:03:49,200 --> 00:03:51,800 Speaker 1: I know that. But as it stands, how far do 67 00:03:51,880 --> 00:03:54,480 Speaker 1: we need to leap to to get you know, to 68 00:03:54,480 --> 00:03:56,680 Speaker 1: bridge this gap. How big is the gap? When will 69 00:03:56,720 --> 00:03:58,960 Speaker 1: we have enough energy security or do we just need 70 00:03:59,000 --> 00:04:01,360 Speaker 1: to keep adding and you know forever in the in 71 00:04:01,440 --> 00:04:01,760 Speaker 1: the day. 72 00:04:03,440 --> 00:04:06,160 Speaker 2: Well, I mean, the good news is that we're growing 73 00:04:07,880 --> 00:04:11,600 Speaker 2: our renewable base, but the issue with growing more renewables 74 00:04:11,600 --> 00:04:14,880 Speaker 2: such as wind and solar and batteries is that their 75 00:04:14,880 --> 00:04:18,200 Speaker 2: growth also by definition exacerbates the problem of being too 76 00:04:18,240 --> 00:04:20,800 Speaker 2: weather depend them. So actually, what we do need is 77 00:04:20,800 --> 00:04:24,800 Speaker 2: a reliable fuel and we will always need a reliable 78 00:04:24,839 --> 00:04:29,679 Speaker 2: fuel to fill the gaps which dostic natural gas previously filled. 79 00:04:30,080 --> 00:04:32,520 Speaker 2: And you know, eventually we will get other fuels, we 80 00:04:32,600 --> 00:04:38,400 Speaker 2: will get biomass and biomethane and all the alternatives, but 81 00:04:38,480 --> 00:04:44,560 Speaker 2: at the moment it falls to domestic natural gas and 82 00:04:45,080 --> 00:04:45,800 Speaker 2: dealing gen. 83 00:04:46,120 --> 00:04:49,000 Speaker 1: John, appreciate your time this morning, John Carnegie Energy Resources 84 00:04:49,000 --> 00:04:50,359 Speaker 1: out to our chief executive. 85 00:04:51,080 --> 00:04:53,320 Speaker 2: For more from Earlily Edition with Ryan Bridge. 86 00:04:53,440 --> 00:04:56,880 Speaker 1: Listen live to news Talks it be from five am weekdays, 87 00:04:57,120 --> 00:04:59,200 Speaker 1: or follow the podcast on iHeartRadio.