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Speaker 1: The Finance Minister along with the Energy Minister are looking

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Speaker 1: at urgent advice what can we do about this wholesale

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Speaker 1: electricity price spike which has just gone through the roof.

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Speaker 1: I mean it's nuts, really when you talk about the

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Speaker 1: numbers sitting at around seven hundred dollars per megawatt. In

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Speaker 1: late twenty twenty one it was at around one hundred

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Speaker 1: dollars per megawatt. As a result of these prices, multiple

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Speaker 1: large scale businesses are halting their operations. Actually the latest

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Speaker 1: is pan Pack in Hawke's Bay forest products they do.

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Speaker 1: They export pulp product to India and China. They've halted

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Speaker 1: their operations. Cost of electricity outweighs profit. Joining me is

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Speaker 1: Energy Resources alted O Chief executive John Carnegie, John, good morning,

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Speaker 1: Good morning. First of all, why is it that the

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Speaker 1: spike is happening and not happening in other places like

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Speaker 1: in Canada for example. I mean it's interesting looking at

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Speaker 1: pan Pack, they point to Canada their biggest competitor in

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Speaker 1: terms of the products they're making. Their electricity index, when

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Speaker 1: up twenty percent since twenty eighteen hours is up two

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Speaker 1: hundred percent.

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Speaker 2: Well, look, I guess what we're seeing in actually the

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Speaker 2: most painful way is how reliant our economy is on

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Speaker 2: natural gas and how important you know, you're probably wonder

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Speaker 2: why I'm talking about natural gas for electricity, but how

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Speaker 2: important it is to our electricity system. About twenty percent

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Speaker 2: of our produced gas is used in the electricity market,

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Speaker 2: and about ten percent of all electricity generator using the

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Speaker 2: users gas. And of course that might be used to

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Speaker 2: your listeners, but it's a real problem if gas production reduces,

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Speaker 2: which it has been quite dramatically, and when you combine

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Speaker 2: that with extremely low lake levels, you know, we've got

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Speaker 2: some of the driest conditions we've ever ever seen, combined

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Speaker 2: with insufficient gas five power stations which are used to

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Speaker 2: hold the system together when the lakes are low. Well,

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Speaker 2: then I guess you'd call that the perfect.

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Speaker 1: What do you you know? The government's looking at things

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Speaker 1: like importing lng G. What do you make of that?

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Speaker 2: I think al G is probably a very useful backup option,

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Speaker 2: but there are a range of other solutions that I

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Speaker 2: think that they should also be working on as well.

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Speaker 1: How long just on aler G, how long before we

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Speaker 1: would actually see that if we started importing it making

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Speaker 1: a difference here to that market?

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Speaker 2: I mean, that's quite quite difficult to answer, but I

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Speaker 2: think you're talking you're talking around about twelve months, twelve

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Speaker 2: after eighteen months possibly, and it's not an insignificant piece

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Speaker 2: of investment. You know, we're talking hundreds of millions of dollars.

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Speaker 2: But you know, one of the solutions I think, if

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Speaker 2: you're wanting to help bring down prices back to long

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Speaker 2: run averages, is actually just getting more gas into our system,

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Speaker 2: natural gas, and that's actually most likely probably going to

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Speaker 2: come through our existing gas producers who have the infrastructure,

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Speaker 2: the workforce, and the knowledge, but actually just need assurances

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Speaker 2: from the government that their investments aren't going to be

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Speaker 2: undercut by future government policy changes like they were in

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Speaker 2: twenty eighteen.

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Speaker 1: But that's the hard thing, right, I Mean, it's a democracy.

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Speaker 1: We vote people and we vote them out, and when

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Speaker 1: the next labor lot come in, I mean, you saw

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Speaker 1: what they did last time. So how can businesses have

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Speaker 1: confidence to invest?

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Speaker 2: Well, I guess that cuts to one of the solutions

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Speaker 2: that I'm going to propose and have been proposed, and

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Speaker 2: that's us working our way back to political bipartisanship to

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Speaker 2: ensure in New Zealand's energy security Frankly, we should never

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Speaker 2: be putting our country in this situation where we can't

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Speaker 2: take care of our people. Industries closing and communities being

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Speaker 2: devastated by job losses is not a part of an

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Speaker 2: energy future. Thanky that I thought I would ever see,

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Speaker 2: and I hope never to see again. This. Actually, this

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Speaker 2: isn't a political game. Actually, this is about livelihoods and jobs.

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Speaker 1: John, thanks for your time. John Carnegie, the Energy Resources

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Speaker 1: to archieve executive saying we need bipartisanship when it comes

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Speaker 1: to our electricity sector. He's got a point, doesn't he need?

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Speaker 1: But you need confidence. Businesses need confidence to invest in

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Speaker 1: order to make sure that the demand is met so

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Speaker 1: that we're not in this mess every time the hydro

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Speaker 1: late levels are down.

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Speaker 2: For more from News Talks B listen live on air

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Speaker 2: or online, and

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