June 10, 2025 • 7 mins
It’s unlikely New Zealand will be in for a repeat of last year’s power shortage.
Our winter stocks are in better shape thanks to improved lake levels, extra gas supplies, and an enlarged coal stockpile has added security to the system.
And although customers are still battling high energy prices, a major government review is expected in the coming weeks.
Meridian CEO Mike Roan told Mike Hosking that they’re deep into investing in the sector so they can overcome the challenge represented by lost gas supplies.
He says they’re currently stabilising the impact, and in the long term, they’re in good shape.
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Episode Transcript
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Speaker 1 (00:00):
Back to our power grid. No shortage of news in
the past week or so because most optimistically it is
rained enough for things not to be die. That's winter,
so that's good. There's the battery project we told you
about it Huntley, the solar project we told you about yesterday.
And Tamuka Tai is back at full pace, so that's good.
And we've got a government review apparently coming in the
next couple of weeks on all of this now. Mike
Roun is the Meridian chief executive and he's with us. Mike,
(00:22):
very good morning to.
Speaker 2 (00:22):
You, Morty. Mike, thanks having me on.
Speaker 1 (00:25):
Excuse me, not at all Optimally, where do we need
to be? And as I sit here talking to you
this morning, how far short are we?
Speaker 2 (00:34):
We're actually in good shape this winter. Mike. I don't
think people need to worry about having enough power. I
think there's a lot of work that's gone on in
the sector since last August where we ran into a
few challenges with drought and gas supply, and I think
those changes and you know, the adjustments that we've made
(00:55):
as we approach this winter have made a difference alongside
and it always helps when you've got to.
Speaker 1 (00:59):
Go yes, exactly. More generally, though, bigger picture, where are
we and how far short of optimal are we? So
we never have to have these conversations ever.
Speaker 2 (01:08):
Again, well, I think longer term, so if you kind
of jump for a few years, you know, we're deep
into investing in the sector so that we can overcome
the challenge that lost gas represents for the sector. So
I think long term, you know, we're in good shape.
I think the best I could say at the moment
(01:29):
is we're stabilizing the impact that that decline and gas
supply has on the electricity sector. I think it's probably
wider than just the impact on the electricity sector. So
I think the economy is trying to work out how
it navigates this period where you know, we don't have
as much gas available to us as we had hoped.
Speaker 1 (01:50):
Was the gas a critically poor decision that gave you
a headache you didn't need.
Speaker 2 (01:55):
Ah. I think the loss of gas or the decline
of gas was you know, a little unexpected. It certainly
was for us, and you know it caused a big
headache for us. I think it cost us two hundred
million bucks last you know, last half year, So you
know it certainly caused a headache. But like with every challenge,
(02:16):
the only question is what do you do about it?
And you know, the people need electricity, people deserve electricity
that the economy relies on. It's the lifeblood of our economy.
And so our job is to tackle the challenge and
that's what we're focused on. You know, we're kind of
investing for the long term and making as I say,
making all these small adjustments, you know, method X offering
(02:39):
gas back into the electricity sector, as you would have
seen a deal earlier this year ends this contributing a
little bit. We're pretty focused at the moment because we're
you know, twenty five feels like it's in reasonable shape.
So we're starting to look at twenty twenty six and
go what do we need to do to ensure the
energy system is secure and the energy is affordable for
(03:02):
folk in twenty six is we're busy focused on the
Huntly Strategic Reserve negotiations so that we've got more energy
from the Huntly power Station that we expect that we'd need.
But you know, as they say, you lose gas, you
tackle the challenge, and that's what.
Speaker 1 (03:18):
We're focusing That's all cool and I get that, but
it does seem it does seem patchwork to me. I mean,
we should be doing better as a country. You know,
a bit of method X here and a bit of
Lergy there and a bit of Huntly over there. I mean,
you know, why aren't we better than this?
Speaker 2 (03:31):
I think I think it's that unexpected decline in gas.
You know, your point is, we have an unbelievable bounty
of renewable resource. There's no question about where we will
be as a country in future. Right, so as all
countries around the globe decarbonized or electrify their economies, we
(03:52):
have a natural competitive advantage. It's just we were relying
on gas as a transition fuel, and obviously it hasn't
played out the way that we'd expected, and so in
the meantime we've got a period where we do have
to patch together a number of solutions while we invest
to manage that transition effectively. But no question about where
(04:14):
will land.
Speaker 1 (04:15):
Okay, So in patching this together as you are, is
there a problem potentially down the track? Years down the track.
Once you've got your solar and your wind and your
battery back up, suddenly gas goes boom again and suddenly
we've got what you would potentially call an oversupply.
Speaker 2 (04:30):
Well, I think that's a you know, I don't think
that's a challenge for the country micas that would just
mean lower electricity prices or energy prices generally. I think
that'd be a good problem for the country to have as.
Speaker 1 (04:41):
But is that realistic?
Speaker 2 (04:44):
I honestly don't know. You know, the gas sector certainly
has its challenges and you know, kind of way i'd
frame it is it feels like it's in terminal decline,
but as we found out last year, we were surprised
by the decline and gas and the speed that And
it could be that someone explores and find gas. So
who knows, you know, all I know. All I know
(05:06):
is people want electricity prices to come down, rightly, so
do I. There's a lot of political media scrutiny on
the sector, and you know, that seems the right sort
of focus from my perspective. We're open for change and
doing things, you know, differently than we have in the past,
and get on tackle the challenge that we've gotten, try
(05:28):
and ensure that the country has a secure and affordable
energy spot.
Speaker 1 (05:32):
Where do you talk about the government's role do you
expect them to break up gent tailors or not?
Speaker 2 (05:37):
I honestly don't know, you know, I think that's a
question we'll find the answer to in a couple of weeks.
I don't think, you know. So if we did go
down that route, that doesn't solve the underlying problem. You know,
the underlying problem being gas suppliers. You could break the
gentailors into one hundred pieces, and that doesn't create more gas.
(06:00):
So you know, if I look at what the government
has done, is they've brought some firepower to bear in
the couple one hundred million bucks to support expiration risk
in the gas sector. I think that's a really useful
change for anybody who is willing to or expecting to
take risk in developing, you know, gas infrastructure. So you know,
(06:24):
those sorts of changes I think are helpful. But I
tell you we're open for any change that will help
make energy more affordable and stimulate investment in the country.
So you know, wherever they land, you know, we're open
for Yeah, what we're up for and open for change.
You know that this sector has been under review. The
(06:45):
market's been in place for twenty nine years, and it's
been reviewed consistently through that period.
Speaker 1 (06:52):
I've got to go random question, if there was no
real argument or politics around it, would you be into nuclear?
Speaker 2 (07:02):
I think the natural resource that we've got the fact
that we've got so much water in this country, MIC
that can help integrate the intermittent resources like wind and solar.
I think we can do it cheaper through the natural
bounty that we've got, even if nuclear was available. So
(07:23):
I think we're really well placed as a country, and
I think the long run, we're in really good shape.
I think we've just got to navigate this challenge that
we're currently in and you know, grab our teeth a
little bit andre with the issues that in front of us.
Speaker 1 (07:39):
Yeah, all right, good to talk to you appreciate it
very much. Interesting inside Mike run who's the Meridian chief executive.
Has it been a two? More on Anybody?
Speaker 2 (07:47):
For more from the Mic Asking Breakfast, listen live to
news talks that'd be from six am weekdays, or follow
the podcast on iHeartRadio.
Back to our power grid. No shortage of news in
the past week or so because most optimistically it is
rained enough for things not to be die. That's winter,
so that's good. There's the battery project we told you
about it Huntley, the solar project we told you about yesterday.
And Tamuka Tai is back at full pace, so that's good.
And we've got a government review apparently coming in the
next couple of weeks on all of this now. Mike
Roun is the Meridian chief executive and he's with us. Mike,
(00:22):
very good morning to.
Speaker 2 (00:22):
You, Morty. Mike, thanks having me on.
Speaker 1 (00:25):
Excuse me, not at all Optimally, where do we need
to be? And as I sit here talking to you
this morning, how far short are we?
Speaker 2 (00:34):
We're actually in good shape this winter. Mike. I don't
think people need to worry about having enough power. I
think there's a lot of work that's gone on in
the sector since last August where we ran into a
few challenges with drought and gas supply, and I think
those changes and you know, the adjustments that we've made
(00:55):
as we approach this winter have made a difference alongside
and it always helps when you've got to.
Speaker 1 (00:59):
Go yes, exactly. More generally, though, bigger picture, where are
we and how far short of optimal are we? So
we never have to have these conversations ever.
Speaker 2 (01:08):
Again, well, I think longer term, so if you kind
of jump for a few years, you know, we're deep
into investing in the sector so that we can overcome
the challenge that lost gas represents for the sector. So
I think long term, you know, we're in good shape.
I think the best I could say at the moment
(01:29):
is we're stabilizing the impact that that decline and gas
supply has on the electricity sector. I think it's probably
wider than just the impact on the electricity sector. So
I think the economy is trying to work out how
it navigates this period where you know, we don't have
as much gas available to us as we had hoped.
Speaker 1 (01:50):
Was the gas a critically poor decision that gave you
a headache you didn't need.
Speaker 2 (01:55):
Ah. I think the loss of gas or the decline
of gas was you know, a little unexpected. It certainly
was for us, and you know it caused a big
headache for us. I think it cost us two hundred
million bucks last you know, last half year, So you
know it certainly caused a headache. But like with every challenge,
(02:16):
the only question is what do you do about it?
And you know, the people need electricity, people deserve electricity
that the economy relies on. It's the lifeblood of our economy.
And so our job is to tackle the challenge and
that's what we're focused on. You know, we're kind of
investing for the long term and making as I say,
making all these small adjustments, you know, method X offering
(02:39):
gas back into the electricity sector, as you would have
seen a deal earlier this year ends this contributing a
little bit. We're pretty focused at the moment because we're
you know, twenty five feels like it's in reasonable shape.
So we're starting to look at twenty twenty six and
go what do we need to do to ensure the
energy system is secure and the energy is affordable for
(03:02):
folk in twenty six is we're busy focused on the
Huntly Strategic Reserve negotiations so that we've got more energy
from the Huntly power Station that we expect that we'd need.
But you know, as they say, you lose gas, you
tackle the challenge, and that's what.
Speaker 1 (03:18):
We're focusing That's all cool and I get that, but
it does seem it does seem patchwork to me. I mean,
we should be doing better as a country. You know,
a bit of method X here and a bit of
Lergy there and a bit of Huntly over there. I mean,
you know, why aren't we better than this?
Speaker 2 (03:31):
I think I think it's that unexpected decline in gas.
You know, your point is, we have an unbelievable bounty
of renewable resource. There's no question about where we will
be as a country in future. Right, so as all
countries around the globe decarbonized or electrify their economies, we
(03:52):
have a natural competitive advantage. It's just we were relying
on gas as a transition fuel, and obviously it hasn't
played out the way that we'd expected, and so in
the meantime we've got a period where we do have
to patch together a number of solutions while we invest
to manage that transition effectively. But no question about where
(04:14):
will land.
Speaker 1 (04:15):
Okay, So in patching this together as you are, is
there a problem potentially down the track? Years down the track.
Once you've got your solar and your wind and your
battery back up, suddenly gas goes boom again and suddenly
we've got what you would potentially call an oversupply.
Speaker 2 (04:30):
Well, I think that's a you know, I don't think
that's a challenge for the country micas that would just
mean lower electricity prices or energy prices generally. I think
that'd be a good problem for the country to have as.
Speaker 1 (04:41):
But is that realistic?
Speaker 2 (04:44):
I honestly don't know. You know, the gas sector certainly
has its challenges and you know, kind of way i'd
frame it is it feels like it's in terminal decline,
but as we found out last year, we were surprised
by the decline and gas and the speed that And
it could be that someone explores and find gas. So
who knows, you know, all I know. All I know
(05:06):
is people want electricity prices to come down, rightly, so
do I. There's a lot of political media scrutiny on
the sector, and you know, that seems the right sort
of focus from my perspective. We're open for change and
doing things, you know, differently than we have in the past,
and get on tackle the challenge that we've gotten, try
(05:28):
and ensure that the country has a secure and affordable
energy spot.
Speaker 1 (05:32):
Where do you talk about the government's role do you
expect them to break up gent tailors or not?
Speaker 2 (05:37):
I honestly don't know, you know, I think that's a
question we'll find the answer to in a couple of weeks.
I don't think, you know. So if we did go
down that route, that doesn't solve the underlying problem. You know,
the underlying problem being gas suppliers. You could break the
gentailors into one hundred pieces, and that doesn't create more gas.
(06:00):
So you know, if I look at what the government
has done, is they've brought some firepower to bear in
the couple one hundred million bucks to support expiration risk
in the gas sector. I think that's a really useful
change for anybody who is willing to or expecting to
take risk in developing, you know, gas infrastructure. So you know,
(06:24):
those sorts of changes I think are helpful. But I
tell you we're open for any change that will help
make energy more affordable and stimulate investment in the country.
So you know, wherever they land, you know, we're open
for Yeah, what we're up for and open for change.
You know that this sector has been under review. The
(06:45):
market's been in place for twenty nine years, and it's
been reviewed consistently through that period.
Speaker 1 (06:52):
I've got to go random question, if there was no
real argument or politics around it, would you be into nuclear?
Speaker 2 (07:02):
I think the natural resource that we've got the fact
that we've got so much water in this country, MIC
that can help integrate the intermittent resources like wind and solar.
I think we can do it cheaper through the natural
bounty that we've got, even if nuclear was available. So
(07:23):
I think we're really well placed as a country, and
I think the long run, we're in really good shape.
I think we've just got to navigate this challenge that
we're currently in and you know, grab our teeth a
little bit andre with the issues that in front of us.
Speaker 1 (07:39):
Yeah, all right, good to talk to you appreciate it
very much. Interesting inside Mike run who's the Meridian chief executive.
Has it been a two? More on Anybody?
Speaker 2 (07:47):
For more from the Mic Asking Breakfast, listen live to
news talks that'd be from six am weekdays, or follow
the podcast on iHeartRadio.
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