Margaret Cooney: Octopus Energy chief executive on the Government's planned reform for the energy sector

There's hopes from one electricity retailer that the Government may underwrite generation projects. 

The Government is expected to make decisions this month on reforming the energy sector - after it asked global consultancy company Frontier Economics to report back on what's needed. 

Octopus Energy chief executive Margaret Cooney says underwriting's worked in the past with the ultra-fast broadband rollout. 

"You can do that by issuing a tender, getting long-term contracts and new supply to come into market as soon as possible." 

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Episode Transcript

Speaker 1 (00:00):
The government is set to release its decision on how
to fix the energy sector sometime this month. Now, this
comes after the so called Frontier Report, which the government
commission telling it what to do to the electricity market.
That's been on the desks for a few months. I've
kept it under wraps, but rumors are swirling. Margaret Cooney
is the chief operating officer at Octopus Energy and with us.

Speaker 2 (00:17):
Hey Margaret, Hi, how are you here? Well?

Speaker 1 (00:20):
Thank you. Have you heard that this report recommends nationalizing
the thermal generation assets.

Speaker 2 (00:26):
Yes, we've heard that from a number of credible sources
and it's swirling the energy nerd circles of Wellington that
this was a recommendation from Frontier.

Speaker 1 (00:38):
Is that what you want?

Speaker 2 (00:41):
Look, I think it's an interesting idea, but immediately we
need to increase supply in the sector, so just shifting
around existing assets doesn't really solve the problem. So we've
been suggesting to government that they should basically take the
broadband approach or which is an approach used in up countries,
and underwrite new investment. So you can do that by

(01:05):
issuing a tender, getting long term contracts the new supplied
to come into market as soon as possible, and they
should do that to match the government's own demand profile.
It would mean you'd need a mix of different types
of generation in order to give you the certainty and
confidence that that energy is there.

Speaker 1 (01:27):
Government's not going to nationalize the thermal assets.

Speaker 2 (01:31):
I think it's unlikely with a national government, but it
is a concept that has been floated by Frontiers. So
were yet to hear how the government's going to deal
with that report. But I think there are better solutions
there that would help us resolve the electrocyed supply crunch
that we're in and also get the market settings working

(01:54):
so that we have a broader group of parties that
can invest in the New Zealand market and build that
much needed new generation.

Speaker 1 (02:03):
Okay, tell me what you think they're actually going to
do then? Is it the underwriting?

Speaker 2 (02:08):
Look, honestly, we don't know what the government is going
to do, but what I hope that they will do
is a combination of things. So it's act on the
announcements that they've all already made about improving the market
settings so that they support competition, that's one, but immediately
put out at tender for these long term contracts so

(02:30):
that we get the uplift and supply that is so
urgently needed. It's really not something we can wait for.
We've got this immediate supply crunch. Really high prices have
been there since you know, twenty eighteen, and we've got

(02:51):
looming gas supply shortages, which mean that we immediately need
to bolsterlectricity supply so we can accommodate industry that wants
to electrify it and also reduce the electricity industries reliance
on that guest that's becoming more scarce.

Speaker 1 (03:11):
Yeah, totally, Margaret, thanks for your time. Margaret Cooney, Octopus
Energy chief operating officer might ask Chris Bishop a question
about that. I think we all agree government's not going
to do that because it's nutty to start nationalizing assets.

Speaker 2 (03:22):
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