Mike Fuge: Contact Energy CEO on the Government's reforms for the energy sector

There's hopes that investment will flow into the energy sector once Government reforms are announced. 

Energy Minister Simon Watts will unveil the changes this morning, targeting issues the market hasn’t been able to resolve on its own. 

The Government ordered the review last year after gas supply issues and soaring wholesale prices. 

Contact Energy CEO Mike Fuge told Mike Hosking the industry needs support for renewable investment already under way as no one wants that momentum lost. 

He says the most important thing for the country is continued investment. 

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Episode Transcript

Speaker 1 (00:00):
Big day. Well, could be a big day for reform
of our energy sector. It came out of last year's
review when the prices went stratispheric and the gas picture
looked increasingly grow in my futures. The Contact Energy CEO
owners back with It's Mike morning to you.

Speaker 2 (00:13):
Morning, Mike, how are you? If?

Speaker 1 (00:14):
I'm well? Thank you. Have you been briefed on today's announcement?
Do you know what's in it?

Speaker 2 (00:18):
We had a very brief pre briefing last night, but
it's embargoed to eight am this morning.

Speaker 1 (00:24):
Yes, it is so so you and I both know
what's in it. Without giving too much away. Out of ten,
they're going to blow the thing up. One they're barely tinkering.
What's your number?

Speaker 2 (00:34):
I think the important thing is for the industry is
that there is support for the renewable investment boom that's
already going on. No one wants to see that stop
or anyone trip over their shoe laters, and so as
long as the focus stays on continued accelerated investment, I
think that's the most important thing for both for the
country right now.

Speaker 1 (00:55):
What about the role of the regulators, the EA and
the ComCom, and what they could or could not do,
and whether that makes any difference at all.

Speaker 2 (01:04):
I think the important thing for the regulators is that
one they're able to do their job, but two they're
there to support the market. They're there to give confidence
to investment, and I think that's the important thing that
people need to stay focused on. What we need is
an environment where the investment can flow in and where

(01:25):
the stations can be built, and that means a regulator
has to be effective. It means we need a resource
consenting machine that goes a whole lot faster and is
a whole lot more supportive.

Speaker 1 (01:35):
They would argue that's what they're doing currently, which has
got nothing to do with the day's announcement. Their reform
is going in your direction. Is that fair or not?

Speaker 2 (01:44):
I think, look, the government has signaled good intent. The
problem is is the bureaucracy seems to have a lot
of inerture in it at the moment, and that's what
needs to get moving faster.

Speaker 1 (01:56):
So are you still worried about fast track? They'll say, oh,
fast track, that's the answer you worried about fast trak?

Speaker 2 (02:01):
Fast track? I think the important thing about fast track
is that it's explicitly that now supports development. Our experience
of fast track is it's not that fast, and we
would love it to go fast faster because we have
a large number of projects we'd like to get through there.

Speaker 1 (02:18):
Access to capital is that a problem within the industry,
not for us.

Speaker 2 (02:24):
I think investors are very excited by what they see
in the potential of New Zealand, and they they were
getting access to that capital is not a problem for us,
and I don't think it should be for others.

Speaker 1 (02:37):
Which is the weird sort of thing about today's announcement.
As far as I can work out, yes, we're sure
of gas, and we can all argue about that till
we're blue in the face, but correct me if I'm wrong.
The industry is seen that the stop gap measure is coal.
Rightly or wrongly, you guys are spending your building your soul,
or you're doing your wind, you're doing your geothermal, all
or that eventually we will get there. Is that fair?

Speaker 2 (02:58):
I think? Look, the investment is unprecedented. It's bigger than
the think bigger era that's going on at the moment.
The important thing is is that we don't blow up
the settings and that we support that investment going in
particularly in g therm Or, which is New Zealand's version
of nuclear energy.

Speaker 1 (03:15):
Now the unions want it doesn't apply to you obviously,
but the gen tailors that are partially government owned, they
want them brought back. Any any value in having a
discussion around that.

Speaker 2 (03:25):
No, that's as I said, you've got to play the
game in front of you. That's yesterday's discussion. The important
thing is it's that we do the things that support investment,
not which stops everyone on their tracks and goes, how
do we do that? All right?

Speaker 1 (03:39):
Good to talk to you, Mike, appreciate it very much.
Mike Fused, chief executive officer at Contact Energy. Yeah, I
felt very gliding on yesterday when the unions came out
with the let's let's buy it all back and renationalize it,
and I thought, have we learned nothing?

Speaker 2 (03:53):
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