John Harbord: Major Electricity Users' Group Chair on the energy crisis highlighting the downsides of renewable power

It's believed New Zealand's current energy dilemmas highlight the double-edged sword of renewable power. 

Low lake levels, acute gas shortages, and periods of low wind have contributed to a looming energy supply crisis and skyrocketing prices. 

Our biggest gas user, global methanol manufacturer Methanex, will shut down its Kiwi operations until October and redirect its gas to Contact Energy and Genesis Energy.  

Major Electricity Users' Group Chair John Harbord says it's a fix, but just a temporary one. 

He told Mike Hosking new gas is urgently needed no matter if it's imported or explored. 

Harbord says being reliant on renewable energy also means an increased reliance on gas and coal. 

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Episode Transcript

Speaker 1 (00:00):
So the band aid for the power crisis seems to
be this deal between methodics and contact and genesis, so
methodics basically and closer operation to locks over sell their
gas to the power companies. Anyway, the Major Electricity Users
Group chair John Harborder is with us on this, John Morning,
Good morning. Is it a little bit band aid?

Speaker 2 (00:16):
Yeah, I mean I think it's definitely a short term solution,
like to help us get it through the current situation
we're in, but obviously it doesn't address any longer term
issues we have with energy supply or the electricity market.

Speaker 1 (00:27):
And as part of that announcement yesterday, the coal site's
being bumped up as well as coal readily available gets
here quick enough and we can fire up hunt lead
to full capacity.

Speaker 2 (00:36):
We're certainly importing large amounts of coal at the moment.
We've exhausted a number of our sort of domestic stock
pile of coal, so we are having to import it
in pretty large amounts. But the port seem to be
coping with it really well, so pretty relaxed on that front.

Speaker 1 (00:50):
Is LNGG going to be a thing at all from
the government's point of view, as anything in that department
going to happen to you know or not?

Speaker 2 (00:56):
Well if I don't know, but I think the government
will be looking at all options, and people in the
market it or in the sector have been looking at
LNG as an option for a few years now, so
I would imagine the government's looking at it.

Speaker 1 (01:06):
So will this deal announced yesterday fix us spring arrives,
demand goes down and with throw it for another winter?
Is that fair or a bit simplistic?

Speaker 2 (01:15):
I think that's overly optimistic. Mic there's no guarantee we're
going to get an influx of rain in the hydro lakes.
We certainly hope that will be the case, and longer
term as well. Simply, our gas fields have less gas
in than than we thought, and that's not a short
term solution to that. We've either got to explore more
and find more, or we're going to have to import it.

(01:36):
It's one of sort of the weird things about being
more and more reliant on wind and solar is that
actually makes you more and more reliant on gas and coal. Exactly,
you use less of the gas and coal, but you
need it even more. And that's the crunks we're facing
right now.

Speaker 1 (01:50):
A methodic stiffing US. I mean they say it's going
to increase their income on Q three Q four, which
indicates to me that they've sold it to us at
a rate that they can't sell it internationally. Yes, they're
laughing all the way to the bank.

Speaker 2 (02:03):
Well, I mean, I think I imagine the benefiting from it.
But I think also it's important to realize that we
absolutely need method X to do what they've done, alongside
a range of other things. So you've got the aluminium
smelter at Tea Wye for instance, has substantially reduced its
production to free up electricity. You've had transpair freeing up

(02:25):
the reserves we keep in the hydro lakes for times
of emergency. So when you combine sort of those three
things across, that will actually make I think a pretty
good difference over the next few months.

Speaker 1 (02:35):
Good stuf. John appreciate then, so John Harbord, who's the
major electricity users group. So we don't have enough power,
everyone's leaving, the tourists aren't arriving. Cool Morning eight.

Speaker 2 (02:44):
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Speaker 1 (02:48):
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