August 10, 2024 • 11 mins
Wholesale energy prices are the highest since October 2018, with hydro-lake levels only 32% full.
Associate Energy Minister Shane Jones joins Tim Beveridge on The Weekend Collective to discuss what can be done to help.
LISTEN ABOVE
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks'd
be higher.
Speaker 2 (00:10):
Power prices have the headlines lately. A wholesale energy prices
are the highest since October twenty eighteen. The hydro late
levels are at thirty two percent, which is actually a
little less than half of normal, so there's not much
relief insight at the moment. Associate Energy Minister Shane Jones
has accused the big power companies of profiteering. He's not
on his own. There's an economist who described the power
(00:32):
companies as operating as a cartel, and Shane Jones is
with me, now, good afternoon, Hey, good day, good So
do we just need more rain?
Speaker 3 (00:46):
Well, at any point in time when we don't have
enough rain or an inflow into our hydro capacity, then,
generally speaking, with one thousand megawatts short of power in
New Zealand, this is not the first year in my
lifetime that it has not rained. And the deeper problem
is that since we had the famous bread Max Bradford
(01:08):
reforms and we have just not seen the gentailors create
enough additional capacity. Because I judge these things not on
the profit of the gent tailors, not on the sophistication
of the economic models that were contemplated in nineteen ninety six.
I judge these things on what's the impact on consumers
(01:29):
in twenty twenty three, twenty four to twenty five twenty six,
what's the impact on industry At this particular point in
time when we're embarking upon electrification, We've got ongoing challenges
about volatile weather and climate change. That's why I've been
calling for a deep dive into the rules and regulations
governing the electricity wholesale market, because at the end of
(01:51):
the day, markets are about rules and regulations. There are
always guardrails, and it's time that we looked into these
guardrails for the clean pair of hands to ensure that
we can continue to maintain businesses and reas New Zealand
and they won't be driven out of existence by extortion
power prices.
Speaker 2 (02:09):
Because it does raise a question as to who is
to blame other gent tailors simply behaving in a way
that they are unable to because the system has been
set up to fail in that respect.
Speaker 3 (02:20):
Well, my colleague Minister Simeon, he has got the various
authorities and officials looking in as to why do we
have these specific power prices, but look like I'll know
band beyond this. Of course, with short of gas and
a lot of the gas goes to Methanex, a major
employer in Taranaki, todd is no longer selling as much
(02:46):
gas as it did to metains as you know. You
probably don't know, but there's been a court case and
we can try and explore for more giothermal energy. We
can generate more heat solar. But I've got to tell you, mate,
this has been around for six to nine years now,
and for the Gen tailors to say, oh, we're doing
(03:07):
lots of investment, actually they're not. The system is geared
in such a way where there is scarcity, there is
an opportunity for extorted prices. And I'm astounded that little
old New Zealand has the most expensive power prices in
the world as of last week.
Speaker 2 (03:26):
Well, you're not on your own with your criticisms because
Victoria University economist Jeff Bertram described the companies as operating
as a cartel. I guess that's just you'd agree with that.
Speaker 3 (03:36):
Onen't you. Yeah, Well, obviously as an intellectual, he studied
it a lot more than I have. I come at
it from the perspective of a politician who's about to
go around regional New Zealand giving speeches. The first one
in Nelson tomorrow, and someone came from the fishing industry,
an industry that uses a lot of power as the
chairman of Sea Lords. So lots of companies are saying
(03:58):
to me, Lookshane, whether or not the Theaticians believe you're
right or wrong. When companies are telling you powers too
expensive in New Zealand to continue operating businesses in New Zealand,
then to me, that's a major alarm bell.
Speaker 2 (04:14):
So what's the facts. Is there a llegiuslat effects you
can do quite quickly or is it a bit more
involved in terms of the way we source our energy anyway.
Speaker 3 (04:22):
Well, whichever way you cut it, whether it happens this
year or next year, believe you me, there's going to
be a leegious little effects. Sadly, I'm not the minister.
Something that New Zealand first campaigned on in the past
Helen Clark effected an operational separation in the telecom industry.
There is a statutory code that could be amended to
(04:46):
rain in the excessive behavior of the gentailors they own
the vast majority of customers in New Zealand. I have
no idea what's the transfer pricing between the two of them.
I don't want to bore your listeners with sort of
tedious details. So there is a statutory set of changes
that can be made tracking a piece of legislation or
(05:07):
I'm sponsoring with mister Bishop, the fast track to make
more energy capacity available. We're looking at options how we
get more oil and gas drilled in the very very
short term. I'm working with Minister Judith Columns on an
option as to how the Crown can expedite the accessing
of deep seated a hydro geet thermal energy. Sorry in
(05:33):
the volcanic plateau. But unless we curtail the behavior of
the gentailors over the next fifteen to twenty four months,
it's going to be a hell of a rocky year
in the election year.
Speaker 2 (05:45):
What about the What about the role of the opposition
with us, Because you know, no government's in forever, there's
always going to be a change. And we've seen there's
that unsettled feeling within investors and drilling for gas and
things because labor outlawed it, didn't they So don't we
need a bipartisan approach to this stuff.
Speaker 3 (06:04):
Yeah, fair cop to the act Party when they said, well,
why don't we go for a shed understanding as to
how we bring resilience and steadiness for the artisity market.
But in my personal view, the worst energy minister in
my lifetime wasn't mass Breadford's actually Mugin Woods. Meghan Woods
(06:24):
acquiesced with the closing down of the gas and oil industry.
She did promote a big hydro scheme pump hydro scheme
in the South Island, but it wasn't going to come
into being for another six, seven ten years, which takes
that long to get anything done in New Zealand. We
have known for a long period of time that we
do not have enough power being produced to cope with
(06:48):
volatile weather. We are now relying at the margin on
coal coming in from Indonesia. This is not a new
problem that gent Taylors have not wanted to solve this
problem because they have felt that it's not their job
to look after the resilience of the or the national
interests of the nation. That's what politicians are paid to do,
(07:09):
and this is one politician who is not going to
walk away from that challenge.
Speaker 2 (07:14):
So one of the big headlines has been over the
years that we're trucking, not trucking and shipping all this
coalon from Indonesia. Where are you at with where we
get our coal? Because so you can imagine that, you know, politically,
it feels uncomfortable to be saying, right, we're going to
start digging our own coal up, but where are you
at with that?
Speaker 3 (07:32):
Well, where we currently do dig our own coal up.
It's coking coal, and it goes over seas, and it's
tremendously lucrative, and it by and large is sent out
of Littleton. We do use a wee bit of coal
that is processed here in New Zealand. But the reason
(07:53):
why investors won't restart our coal industry is because it's
regarded as a dirty fossil fuel in the context of
climate change decarbonization. And if you start a coal mine
in New Zealand for generating domestic energy and the government changes,
you're likely to have your license taken away from you,
(08:14):
as just Cinda Adern did with the oil and gas industry.
That's why people are unwilling to spend the capital, take
the risk and maintain a domestic coal industry from domestic
power generation. Thus we're reliant on Indonesian coal, which is
a lot cheaper and there's so much of it at
the margin, we represent only a beauty spot in terms
(08:36):
of the amount of coal that they sell internationally.
Speaker 2 (08:39):
Well, that brings us back to the bipartisan issha, doesn't it.
Have you had any sort of sense of whether Labor
might be willing to be a bit more pragmatic on
this from your point of view, I.
Speaker 3 (08:51):
Think that unless Labor is more pragmatic, they'll never vote,
they'll never govern again. You know, historically they were a
party that stood with the natural resources mining sector. Due
to identity politics and flaky climate thinking, they've long since
(09:11):
lost their roots. So in my view, they're trying to
outgreen the Greens and we will never see them back
in power ever again until such time they take a robust,
grown up pettitude to energy resilience. The Green's major proposal,
as I understand, is to put solar panels on everyone's houses.
I mean, in fairness to the Greens, the Aussies did
(09:32):
do that, but you know, we only have to look
at what happened to the Conservatives in the UK to
understand what is the potent impact on politicians when energy
policies go awry.
Speaker 2 (09:49):
Hey, look, I really appreciate your time. Just quickly, at
the end of the Olympics, you've been spending a little
bit of time in front of the telly.
Speaker 3 (09:57):
Yeah, of course I have. And I wasn't quite the
fairy pale finish with with Carrington and Fisher, But I
love the fact that the younger Fisher showed a great
deal of class and respect for our Dame.
Speaker 2 (10:16):
For our Dame, yeah, she did describe it pretty well.
She just magnificence. And I'm just pleased that you survived
that rugby match I saw a week or two ago.
Speaker 3 (10:25):
Yeah, and I'm still wandering around with a bit of
a saw back. I wasn't on there for long. I
was on there for long enough to realize that, as
Winston Peter says to me, Shane, you are fairly everd
rugby in your thirties. You have not got any better
in your sixties. So I make a promise to your listeners,
the butt of the will not be falling for such
(10:45):
sort of a long lost youthful vanity.
Speaker 2 (10:47):
Again, Hey, look, I really appreciate your time. This afternoon,
Shane thinks, enjoy the rest of the day. Thank bye bye,
there we go. That's Shane Jones. Hey, we're going to
take your feedback on this of course as well. Actually,
that's a really interesting comment he made that he doesn't
believe that Labour are going to get back into power
until they basically change the way they are at the moment.
(11:09):
It's the first actually, that's the first time I think
I've heard that point of view sort of expounded or
whatever the word is, so sort of clearly. But when
you look at issues like our energy and the fact
that there's this lack of willingness for companies to invest
in gas and drilling the infrastructure that we need, it
(11:32):
does need to buy part as an approach.
Speaker 1 (11:34):
For more from the Weekend Collective, listen live to News
Talk ZB weekends from three pm, or follow the podcast
on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talks'd
be higher.
Speaker 2 (00:10):
Power prices have the headlines lately. A wholesale energy prices
are the highest since October twenty eighteen. The hydro late
levels are at thirty two percent, which is actually a
little less than half of normal, so there's not much
relief insight at the moment. Associate Energy Minister Shane Jones
has accused the big power companies of profiteering. He's not
on his own. There's an economist who described the power
(00:32):
companies as operating as a cartel, and Shane Jones is
with me, now, good afternoon, Hey, good day, good So
do we just need more rain?
Speaker 3 (00:46):
Well, at any point in time when we don't have
enough rain or an inflow into our hydro capacity, then,
generally speaking, with one thousand megawatts short of power in
New Zealand, this is not the first year in my
lifetime that it has not rained. And the deeper problem
is that since we had the famous bread Max Bradford
(01:08):
reforms and we have just not seen the gentailors create
enough additional capacity. Because I judge these things not on
the profit of the gent tailors, not on the sophistication
of the economic models that were contemplated in nineteen ninety six.
I judge these things on what's the impact on consumers
(01:29):
in twenty twenty three, twenty four to twenty five twenty six,
what's the impact on industry At this particular point in
time when we're embarking upon electrification, We've got ongoing challenges
about volatile weather and climate change. That's why I've been
calling for a deep dive into the rules and regulations
governing the electricity wholesale market, because at the end of
(01:51):
the day, markets are about rules and regulations. There are
always guardrails, and it's time that we looked into these
guardrails for the clean pair of hands to ensure that
we can continue to maintain businesses and reas New Zealand
and they won't be driven out of existence by extortion
power prices.
Speaker 2 (02:09):
Because it does raise a question as to who is
to blame other gent tailors simply behaving in a way
that they are unable to because the system has been
set up to fail in that respect.
Speaker 3 (02:20):
Well, my colleague Minister Simeon, he has got the various
authorities and officials looking in as to why do we
have these specific power prices, but look like I'll know
band beyond this. Of course, with short of gas and
a lot of the gas goes to Methanex, a major
employer in Taranaki, todd is no longer selling as much
(02:46):
gas as it did to metains as you know. You
probably don't know, but there's been a court case and
we can try and explore for more giothermal energy. We
can generate more heat solar. But I've got to tell you, mate,
this has been around for six to nine years now,
and for the Gen tailors to say, oh, we're doing
(03:07):
lots of investment, actually they're not. The system is geared
in such a way where there is scarcity, there is
an opportunity for extorted prices. And I'm astounded that little
old New Zealand has the most expensive power prices in
the world as of last week.
Speaker 2 (03:26):
Well, you're not on your own with your criticisms because
Victoria University economist Jeff Bertram described the companies as operating
as a cartel. I guess that's just you'd agree with that.
Speaker 3 (03:36):
Onen't you. Yeah, Well, obviously as an intellectual, he studied
it a lot more than I have. I come at
it from the perspective of a politician who's about to
go around regional New Zealand giving speeches. The first one
in Nelson tomorrow, and someone came from the fishing industry,
an industry that uses a lot of power as the
chairman of Sea Lords. So lots of companies are saying
(03:58):
to me, Lookshane, whether or not the Theaticians believe you're
right or wrong. When companies are telling you powers too
expensive in New Zealand to continue operating businesses in New Zealand,
then to me, that's a major alarm bell.
Speaker 2 (04:14):
So what's the facts. Is there a llegiuslat effects you
can do quite quickly or is it a bit more
involved in terms of the way we source our energy anyway.
Speaker 3 (04:22):
Well, whichever way you cut it, whether it happens this
year or next year, believe you me, there's going to
be a leegious little effects. Sadly, I'm not the minister.
Something that New Zealand first campaigned on in the past
Helen Clark effected an operational separation in the telecom industry.
There is a statutory code that could be amended to
(04:46):
rain in the excessive behavior of the gentailors they own
the vast majority of customers in New Zealand. I have
no idea what's the transfer pricing between the two of them.
I don't want to bore your listeners with sort of
tedious details. So there is a statutory set of changes
that can be made tracking a piece of legislation or
(05:07):
I'm sponsoring with mister Bishop, the fast track to make
more energy capacity available. We're looking at options how we
get more oil and gas drilled in the very very
short term. I'm working with Minister Judith Columns on an
option as to how the Crown can expedite the accessing
of deep seated a hydro geet thermal energy. Sorry in
(05:33):
the volcanic plateau. But unless we curtail the behavior of
the gentailors over the next fifteen to twenty four months,
it's going to be a hell of a rocky year
in the election year.
Speaker 2 (05:45):
What about the What about the role of the opposition
with us, Because you know, no government's in forever, there's
always going to be a change. And we've seen there's
that unsettled feeling within investors and drilling for gas and
things because labor outlawed it, didn't they So don't we
need a bipartisan approach to this stuff.
Speaker 3 (06:04):
Yeah, fair cop to the act Party when they said, well,
why don't we go for a shed understanding as to
how we bring resilience and steadiness for the artisity market.
But in my personal view, the worst energy minister in
my lifetime wasn't mass Breadford's actually Mugin Woods. Meghan Woods
(06:24):
acquiesced with the closing down of the gas and oil industry.
She did promote a big hydro scheme pump hydro scheme
in the South Island, but it wasn't going to come
into being for another six, seven ten years, which takes
that long to get anything done in New Zealand. We
have known for a long period of time that we
do not have enough power being produced to cope with
(06:48):
volatile weather. We are now relying at the margin on
coal coming in from Indonesia. This is not a new
problem that gent Taylors have not wanted to solve this
problem because they have felt that it's not their job
to look after the resilience of the or the national
interests of the nation. That's what politicians are paid to do,
(07:09):
and this is one politician who is not going to
walk away from that challenge.
Speaker 2 (07:14):
So one of the big headlines has been over the
years that we're trucking, not trucking and shipping all this
coalon from Indonesia. Where are you at with where we
get our coal? Because so you can imagine that, you know, politically,
it feels uncomfortable to be saying, right, we're going to
start digging our own coal up, but where are you
at with that?
Speaker 3 (07:32):
Well, where we currently do dig our own coal up.
It's coking coal, and it goes over seas, and it's
tremendously lucrative, and it by and large is sent out
of Littleton. We do use a wee bit of coal
that is processed here in New Zealand. But the reason
(07:53):
why investors won't restart our coal industry is because it's
regarded as a dirty fossil fuel in the context of
climate change decarbonization. And if you start a coal mine
in New Zealand for generating domestic energy and the government changes,
you're likely to have your license taken away from you,
(08:14):
as just Cinda Adern did with the oil and gas industry.
That's why people are unwilling to spend the capital, take
the risk and maintain a domestic coal industry from domestic
power generation. Thus we're reliant on Indonesian coal, which is
a lot cheaper and there's so much of it at
the margin, we represent only a beauty spot in terms
(08:36):
of the amount of coal that they sell internationally.
Speaker 2 (08:39):
Well, that brings us back to the bipartisan issha, doesn't it.
Have you had any sort of sense of whether Labor
might be willing to be a bit more pragmatic on
this from your point of view, I.
Speaker 3 (08:51):
Think that unless Labor is more pragmatic, they'll never vote,
they'll never govern again. You know, historically they were a
party that stood with the natural resources mining sector. Due
to identity politics and flaky climate thinking, they've long since
(09:11):
lost their roots. So in my view, they're trying to
outgreen the Greens and we will never see them back
in power ever again until such time they take a robust,
grown up pettitude to energy resilience. The Green's major proposal,
as I understand, is to put solar panels on everyone's houses.
I mean, in fairness to the Greens, the Aussies did
(09:32):
do that, but you know, we only have to look
at what happened to the Conservatives in the UK to
understand what is the potent impact on politicians when energy
policies go awry.
Speaker 2 (09:49):
Hey, look, I really appreciate your time. Just quickly, at
the end of the Olympics, you've been spending a little
bit of time in front of the telly.
Speaker 3 (09:57):
Yeah, of course I have. And I wasn't quite the
fairy pale finish with with Carrington and Fisher, But I
love the fact that the younger Fisher showed a great
deal of class and respect for our Dame.
Speaker 2 (10:16):
For our Dame, yeah, she did describe it pretty well.
She just magnificence. And I'm just pleased that you survived
that rugby match I saw a week or two ago.
Speaker 3 (10:25):
Yeah, and I'm still wandering around with a bit of
a saw back. I wasn't on there for long. I
was on there for long enough to realize that, as
Winston Peter says to me, Shane, you are fairly everd
rugby in your thirties. You have not got any better
in your sixties. So I make a promise to your listeners,
the butt of the will not be falling for such
(10:45):
sort of a long lost youthful vanity.
Speaker 2 (10:47):
Again, Hey, look, I really appreciate your time. This afternoon,
Shane thinks, enjoy the rest of the day. Thank bye bye,
there we go. That's Shane Jones. Hey, we're going to
take your feedback on this of course as well. Actually,
that's a really interesting comment he made that he doesn't
believe that Labour are going to get back into power
until they basically change the way they are at the moment.
(11:09):
It's the first actually, that's the first time I think
I've heard that point of view sort of expounded or
whatever the word is, so sort of clearly. But when
you look at issues like our energy and the fact
that there's this lack of willingness for companies to invest
in gas and drilling the infrastructure that we need, it
(11:32):
does need to buy part as an approach.
Speaker 1 (11:34):
For more from the Weekend Collective, listen live to News
Talk ZB weekends from three pm, or follow the podcast
on iHeartRadio.
Popular Podcasts
Fudd Around And Find Out
UConn basketball star Azzi Fudd brings her championship swag to iHeart Women’s Sports with Fudd Around and Find Out, a weekly podcast that takes fans along for the ride as Azzi spends her final year of college trying to reclaim the National Championship and prepare to be a first round WNBA draft pick. Ever wonder what it’s like to be a world-class athlete in the public spotlight while still managing schoolwork, friendships and family time? It’s time to Fudd Around and Find Out!
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com