1 00:00:00,080 --> 00:00:01,520 Speaker 1: Let's bring it back home and try and work out 2 00:00:01,560 --> 00:00:03,760 Speaker 1: what's going on with our power system. Is it simply 3 00:00:03,800 --> 00:00:05,920 Speaker 1: a lack of rain, too much reliance on hydro, and 4 00:00:05,960 --> 00:00:07,680 Speaker 1: it'll get fixed when it does rain. Or is the 5 00:00:07,680 --> 00:00:10,080 Speaker 1: market broken with too many able to profit on tough times. 6 00:00:10,280 --> 00:00:12,639 Speaker 1: Contact Energy's chief executive, Mike Fusia is with us. 7 00:00:12,680 --> 00:00:15,920 Speaker 2: Mike, Morning, morning, morning, Mike, how are you very well? 8 00:00:15,920 --> 00:00:19,560 Speaker 1: Thank you? The right here right now, mills closing doors, 9 00:00:19,640 --> 00:00:21,840 Speaker 1: laying people off because they can't afford the spot price. 10 00:00:22,040 --> 00:00:25,640 Speaker 1: Do we all agree that that, in isolation is unacceptable? 11 00:00:26,920 --> 00:00:29,120 Speaker 2: Yes, we'd never look key. We are doing it tough 12 00:00:29,160 --> 00:00:32,000 Speaker 2: at the moment, and that's never an acceptable outcome, and 13 00:00:32,200 --> 00:00:34,640 Speaker 2: so we're working hard at the moment to make sure 14 00:00:34,680 --> 00:00:37,159 Speaker 2: that that is not there for the medium and long term. 15 00:00:37,720 --> 00:00:38,640 Speaker 1: Is the market broken? 16 00:00:39,880 --> 00:00:42,559 Speaker 2: Absolutely not what the market needs at the moment and 17 00:00:42,600 --> 00:00:44,440 Speaker 2: the short term, what's happened is that it's been a 18 00:00:44,520 --> 00:00:47,360 Speaker 2: very dry July. We've got a gas shortage at the moment, 19 00:00:47,400 --> 00:00:49,919 Speaker 2: and there hasn't been much wind. We're working to whole 20 00:00:50,159 --> 00:00:52,879 Speaker 2: resolve those short term issues, but the real solution is 21 00:00:52,920 --> 00:00:55,160 Speaker 2: building more power stations, which is what we're doing at 22 00:00:55,200 --> 00:00:57,960 Speaker 2: the moment. The market isn't broken, the market's working. There's 23 00:00:57,960 --> 00:01:00,200 Speaker 2: a lot of investment going in at the moment to 24 00:01:00,240 --> 00:01:01,800 Speaker 2: build new renewable power stations. 25 00:01:01,840 --> 00:01:04,160 Speaker 1: And when you say power stations, what are they. 26 00:01:05,319 --> 00:01:09,479 Speaker 2: Geo thermal, the wind. We've invested over one point four 27 00:01:09,480 --> 00:01:12,920 Speaker 2: billion in building Tohara and to Hookah three. Tohara is 28 00:01:12,959 --> 00:01:15,400 Speaker 2: online at seventy five percent capacity. To talk of three 29 00:01:15,400 --> 00:01:19,320 Speaker 2: will be on shortly. We'll be making some announcements further 30 00:01:19,319 --> 00:01:23,240 Speaker 2: announcements sure shortly about further investments and power stations and 31 00:01:23,280 --> 00:01:25,600 Speaker 2: as batteries being built. So there's a lot going on 32 00:01:25,760 --> 00:01:26,319 Speaker 2: right now. 33 00:01:26,360 --> 00:01:28,920 Speaker 1: What's the time frame on all of that coming to 34 00:01:29,000 --> 00:01:32,080 Speaker 1: market and fruition and therefore how much of that solves 35 00:01:32,080 --> 00:01:33,360 Speaker 1: the problem forever? 36 00:01:33,680 --> 00:01:36,720 Speaker 2: Well, Tohara is online now. We expect to have it 37 00:01:36,800 --> 00:01:39,679 Speaker 2: up at full capacity in the next twelve months. To 38 00:01:39,680 --> 00:01:42,800 Speaker 2: Hooker three will be on in the coming months. That 39 00:01:43,280 --> 00:01:45,720 Speaker 2: those two power stations alone account for five percent of 40 00:01:45,760 --> 00:01:49,520 Speaker 2: New Zealand's total energy demand. We expect Sola to be 41 00:01:49,600 --> 00:01:52,720 Speaker 2: on in about a year and a half. So these 42 00:01:52,760 --> 00:01:55,000 Speaker 2: things are happening at a reasonably good clip. 43 00:01:55,360 --> 00:01:58,000 Speaker 1: Are you typical of Gen Taylor's in the amount of 44 00:01:58,040 --> 00:02:00,680 Speaker 1: investment you're doing in the infrastructure are putting in or 45 00:02:00,680 --> 00:02:01,760 Speaker 1: are you an outlier or what. 46 00:02:03,600 --> 00:02:06,720 Speaker 2: We're leading in terms of our levels of investment that 47 00:02:06,760 --> 00:02:10,000 Speaker 2: certainly the other gent tailors have been investing in when solid. 48 00:02:10,000 --> 00:02:12,800 Speaker 2: We're fortunate to have Geo Thermal in our portfolio and 49 00:02:12,840 --> 00:02:15,160 Speaker 2: we're building it out as fast as we possibly can. 50 00:02:15,880 --> 00:02:19,880 Speaker 1: Was that onslow idea a problem in terms of investment 51 00:02:19,880 --> 00:02:20,840 Speaker 1: in the marketplace or not? 52 00:02:22,800 --> 00:02:25,120 Speaker 2: Look, the whole thing was onslow was that it was 53 00:02:25,280 --> 00:02:27,320 Speaker 2: just going to cost a hell of a lot of a 54 00:02:27,440 --> 00:02:30,400 Speaker 2: money which would have come out of left field, and 55 00:02:30,720 --> 00:02:32,440 Speaker 2: it just sits there and it was a bit of 56 00:02:32,440 --> 00:02:35,639 Speaker 2: a bad smell. It didn't stop us. We got and invested. 57 00:02:36,280 --> 00:02:39,760 Speaker 2: We have this fundamental belief that kiwis don't go running 58 00:02:39,760 --> 00:02:42,080 Speaker 2: after spending billions of dollars in bad ideas, So we 59 00:02:42,160 --> 00:02:43,239 Speaker 2: got on and invested. 60 00:02:44,080 --> 00:02:46,080 Speaker 1: The EA, where are they and do they have a 61 00:02:46,120 --> 00:02:48,600 Speaker 1: role to play in this particular scenario right here, right now? 62 00:02:48,680 --> 00:02:49,520 Speaker 1: What about the ComCom? 63 00:02:51,040 --> 00:02:52,840 Speaker 2: The EA do have a role to play. They are 64 00:02:52,880 --> 00:02:57,200 Speaker 2: the regulator. They have regularly reviewed when market conditions do 65 00:02:57,280 --> 00:02:59,560 Speaker 2: get tight or unusual. Over the last few years, they 66 00:02:59,560 --> 00:03:03,160 Speaker 2: have reg reviewed and where change is being needed. They 67 00:03:03,160 --> 00:03:06,160 Speaker 2: have implemented that change around standards of trading and the like, 68 00:03:06,600 --> 00:03:09,840 Speaker 2: and so they have been an effective regulator and they 69 00:03:09,880 --> 00:03:11,560 Speaker 2: will look at the conditions now. 70 00:03:11,639 --> 00:03:14,880 Speaker 1: Right here, right now, do we need LNG? Does the 71 00:03:14,880 --> 00:03:16,640 Speaker 1: government need to move on that, do you think or not? 72 00:03:17,680 --> 00:03:20,320 Speaker 2: Well, LNG, like everything else, will take a bit of 73 00:03:20,360 --> 00:03:23,799 Speaker 2: time to get the engineering done to get it in place. 74 00:03:23,960 --> 00:03:26,840 Speaker 2: What we need right now is a bit more gas 75 00:03:26,840 --> 00:03:28,799 Speaker 2: and to make sure the power stations we have running 76 00:03:28,800 --> 00:03:30,880 Speaker 2: do continue to operate. And we're working twenty four to 77 00:03:30,919 --> 00:03:33,480 Speaker 2: seven to make that happen, and hopefully we can announce 78 00:03:33,520 --> 00:03:36,160 Speaker 2: over the coming days some relief on the gas front. 79 00:03:36,320 --> 00:03:38,440 Speaker 2: LNG is an option for the future, but it's going 80 00:03:38,480 --> 00:03:39,920 Speaker 2: to take a bit of hard work to get that 81 00:03:40,000 --> 00:03:40,680 Speaker 2: in place as well. 82 00:03:40,720 --> 00:03:42,200 Speaker 1: And when you mean in the next couple of days 83 00:03:42,200 --> 00:03:43,640 Speaker 1: on relief on the gas front, what do you mean 84 00:03:43,640 --> 00:03:43,960 Speaker 1: by that? 85 00:03:45,320 --> 00:03:47,560 Speaker 2: We expect to be able to access some more gas 86 00:03:47,640 --> 00:03:50,000 Speaker 2: in the coming days, where there's a bit of hard 87 00:03:50,040 --> 00:03:51,120 Speaker 2: work going in the background to. 88 00:03:51,120 --> 00:03:52,640 Speaker 1: See, well, when you've got someone to shit out at 89 00:03:52,640 --> 00:03:54,160 Speaker 1: the back or something you found some. 90 00:03:55,640 --> 00:03:57,800 Speaker 2: No, not quite that much, but we'll be able to 91 00:03:57,840 --> 00:03:59,600 Speaker 2: make an announcement in the next twenty four to forty 92 00:03:59,640 --> 00:04:00,000 Speaker 2: eight hours. 93 00:04:00,080 --> 00:04:03,160 Speaker 1: We hope good will the government do you think end 94 00:04:03,240 --> 00:04:05,160 Speaker 1: up intervening or are they just trying to draw by this? 95 00:04:06,360 --> 00:04:10,960 Speaker 2: Oh look, my strong advocacy is that the market is 96 00:04:11,040 --> 00:04:15,520 Speaker 2: working and that any intervention will just slow investment down 97 00:04:15,560 --> 00:04:17,760 Speaker 2: as we all turn and try and work out what 98 00:04:17,800 --> 00:04:20,560 Speaker 2: the intervention is. And that's what our experience from overseas 99 00:04:20,560 --> 00:04:24,240 Speaker 2: where government interventions have never had happy endings, and the 100 00:04:24,279 --> 00:04:26,200 Speaker 2: same as what happened here when they announce you all 101 00:04:26,200 --> 00:04:29,480 Speaker 2: in gas band, it hasn't had a good ending, all. 102 00:04:29,440 --> 00:04:31,039 Speaker 1: Right, look forward to the announcement in the next couple 103 00:04:31,080 --> 00:04:33,640 Speaker 1: of days. Mike put who's the Contact Energy CEO. 104 00:04:34,200 --> 00:04:37,080 Speaker 2: For more from the Mic Asking Breakfast, listen live to 105 00:04:37,200 --> 00:04:40,279 Speaker 2: news talks that'd be from six am weekdays, or follow 106 00:04:40,320 --> 00:04:41,880 Speaker 2: the podcast on iHeartRadio.