Margaret Cooney: Octopus Energy Chief Operating Officer hopes ministerial change will bring solutions to energy crisis

New Zealand's energy sector is hoping Prime Minister Luxon's Cabinet reshuffle will lead to potential solutions to the country's energy crisis.

Yesterday's shake-up resulted in Climate Change Minister Simon Watts picking up the energy portfolio from Simeon Brown.

Octopus Energy's Margaret Cooney says more innovation is needed to boost the sector.

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Episode Transcript

Speaker 1 (00:00):
And this is interesting when the text says the issue,
of course with the dollar being down is that it's
great for exporters and we're an export based economy. Meanwhile,
everyone else feels the pain. And that's true. The domestic
economy feels the pain. The dollar goes down, the picture
prices go up, it costs forever to it costs an
enormous amount to run the car, and all other things
because remember everything depends on energy. Right Anyway, the text

(00:24):
goes on and says central government will never change their
stance because it helps boost GDP and boost tax receipts.
And this is the sort of frustration which sends people
who are not involved in the export industry and are
not making money from the lower dollar. That's the sort
of thing that sends people overseas. And I read that
text out because I want to talk about energy. The

(00:45):
energy sector drives an economy, and the energy sector has
a new minister and they're hoping that that new minister
will have new solutions to the country's energy crisis. So
we've got electricity prices continuing to rise, we've got no
solution found for looming gas shortage so far, and we
have a new Climate Change Minister and it's Simon Wat's

(01:05):
from the North Shore. He picks up the energy portfolio
from Simon Brown. So let's talk about this. I'm joined
by Octopus Energy Chief operating Officer Margaret Cooney right now,
Happy New year.

Speaker 2 (01:16):
Margaret, thanks for giving me.

Speaker 1 (01:18):
It's a pleasure. So the energy crisis, where is it
from your point of view? Oh?

Speaker 2 (01:25):
Look, it's still going I think as we're touring the
Smber when the GDP numbers came out, electricity costs are
having a real drag on the economy and productivity. So
the issue the dry year has gone from last year,
but issue of high prices impacting New Zealand businesses and

(01:46):
householders is an ongoing issue.

Speaker 1 (01:49):
Yeah, so what's the answer? I know, I know, I mean,
we all know this is the problem with it. So
many things we can all point out the problem beautifully.
The question is what is the answer?

Speaker 2 (02:00):
Yeah? Well, I think the good thing is that New
Zealand really doesn't need to reinvent the wheel here. The
OFCD have identified that basically we need to do some
reforms to support competition in the sector. So one of
the things that the Minister has highlighted is that there
is a reform agenda that's needed an energy and it's

(02:22):
really action in that. So we know already that the
current energy prices are well above the cost of new generation.
So all we need is new generation coming into market
also settings that support much more innovation. So we have
seen abroad just the massive impact that entry from new

(02:44):
generation investors and retailers like ourselves is having on energy markets.
And I think, you know, there's a bad news story
at the moment around energy, but there should be a
lot of hope and confidence that some reform we can
actually make sure that the New Zealand economy is driven

(03:06):
by the energy sector and it's no longer an Achilles heal.

Speaker 1 (03:11):
So when we talk about new generation, if you're going
to talk about a DAN, that's going to take forever,
even no matter how much fast tracked legislation comes in.
The resource consenting and the engineering is extraordinary. If you're
going hydro, then you've got to cause wind, and you've
got geothermal, et cetera, and you've got solar. You know, now, really,
do we have enough extra generation there to actually cope

(03:32):
with what we already use in terms of energy and
what we hope to use in energy to further far
on growth.

Speaker 2 (03:41):
There is quite a substantial pipeline of potential generation development sites.
Part of the problem is that lots of these new
entrant generators actually can't get the projects off the ground
because they can't get the contracts of counterparties because the

(04:02):
market side locked up. So it's really just reforming that
piece to unleash a level of investment that's needed to
help scale the sector and also decarbonize the sector as well.

Speaker 1 (04:18):
Everyone loves to talk about the oil and gas exploration.
Of course we didn't promote it. We didn't actually stir
it on by banning it. That was bad for business,
and of course people didn't want to put money into
that sort of business if they're going to see a
government banning and then unbanning oil and gas exploration. But
also before that even happened, we were finding it difficult
to find any new sources. So where do you think

(04:41):
that Where do you think we are in that area,
in that sector of the sector.

Speaker 2 (04:47):
Look, I think there are a whole number of issues
around the gas sector. There hasn't been enough exploration to
bring on new supply. That's an obvious issue. There's much
debate about the Crown Minerals Act as well, So I
don't think we should expect huge changes there in the
short term. It is a gas is ultimately like kind

(05:12):
of ten year horizon to invest in it and find it.
But I think one of the things we should place
a lot more hoping is actually the potential of other
technologies to fill the gap that has previously been filled

(05:33):
by gas. So we are seeing massive reductions in the
cost of of grid scale batteries, and so the combination
of building out those renewables like solar that's falling and
putting batteries in that is another solution.

Speaker 1 (05:52):
Yes, yeah, absolutely, But of course then they become dependent
on the rare earth minerals that then also start to
run out, and you have a run out there as well.
I mean, really, what humankind needs to find is a
cheap and reliable and perpetually renewing energy source. Have you
heard of any of those ladies.

Speaker 2 (06:11):
We've got a New Zealand based nuclear fusion operation so
Ocean Star, So maybe there's hope in that.

Speaker 1 (06:23):
Really, is that where we're at? Because I'm hearing this
in America as well, I think they are saying they
are saying, look, we've got an energy crisis in America
and look how much oil we've got. But so so
they are really saying we have not maximized nuclear technology.

Speaker 2 (06:39):
Yeah. Look, I think more immediately for New Zealand, biling
out renewables and batteries are an option lot. Guess in
the medium term maybe, but there's there's a few hurdles there.

Speaker 1 (06:56):
I think.

Speaker 2 (06:56):
The other big thing to highlight is that for households,
adopting solar is becoming increasingly economic. So the payback on
the solar system now is around five to seven years,
and you know, beyond that period, it's not like a couch,
it actually starts making new money. So as the one

(07:20):
thing which we do need to do expanding our energy supply,
you know, I would strongly encourage everyone who has the
access to money or a low interest loan to look
at solar because you know, it really really does stack up.

Speaker 1 (07:38):
All right, Margaret Cooney, I thank you so much.

Speaker 2 (07:39):
Now.

Speaker 1 (07:40):
Margaret is the Octopus Energy Chief operating Officer.

Speaker 2 (07:44):
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Speaker 1 (07:48):
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