Discussion:
Electricity Industry supply shortcomings
(too old to reply)
Crash
2021-04-11 23:53:23 UTC
Permalink
Interesting article on this (guest post by Bryan Leland on Kiwiblog):

-----
The primary reason for high electricity prices at the moment is that
nobody is responsible for ensuring that we have a reliable and
economic supply. Not the Electricity Authority, not the generators,
not Transpower. Not anyone.

According to the academic economists who run the market, market forces
should ensure that we have a low cost, adequate and reliable supply
even in a dry year. If they understood power systems they would
realise that the market lacks the inducements needed to ensure that
this happens.

The reality is that we have an electricity market that is not fit for
purpose. An efficient market would provide a reliable supply with
every new increment of generation chosen because it provides a
reliable supply and minimises the long term cost of electricity to
everyone.

Right now spot prices are between three and 10 times normal because
the lake levels are low and we don’t have enough gas or coal-fired
generating capacity. If it doesn’t rain heavily, the situation will
get worse.

The existing market makes new generation investment very risky. It
discourages investment in power stations that are a good long-term
investment and rewards generators with prices well above the cost of
generation when they have failed to provide sufficient generating
capacity.

To illustrate this, in their retirement speeches, two CEOs of
generating companies said that the way to make a profit in this market
is to keep the system on the edge of a shortage. It follows that when
a dry year comes along there is a risk of high prices and, possibly,
blackouts.

During shortages the generators jack up the prices because this is the
only way they can hope to affect demand. It doesn’t work for the
simple reason that most consumers are on contract prices so they don’t
see the price rise. The high prices severely damages many industries
who buy on the spot market and cannot afford to cut back production,
or like dairy companies, have no alternative but to keep on
processing. Others, like the paper mill at Whakatane, simply shut up
shop and put people out of work. According to the Major Electricity
Users group “If the prices continue on the pathway they are on… there
will be a number of major industrial operations in the country that
simply won’t be in business anymore.” “We’re looking at the loss of
thousands of jobs…”

In the “bad old days” the electricity industry gave early warnings to
consumers about the risk of shortages so that everyone could do their
bit towards reducing demand. As most people are public spirited, this
worked well without any need to increase prices.

In our brave new world the government has decreed that it will respond
to shortages and high prices by shutting down industries and
sacrificing jobs before asking consumers to reduce consumption. So
your lights stay on, but you lose your job and struggle to pay the
electricity bill.

At the moment the storage lakes that should be close to full are at
their lowest level in 20 years, we have a serious shortage of gas and,
thanks to the ban on exploration, this will get worse. The coal-fired
station at Huntly is now running flat out and it seems that the “last
ditch” oil fired gas turbines at Whirinaki are being called on.

If we had a properly coordinated system steps would have been taken to
ensure that sufficient energy was held in reserve in the lakes, in gas
storage and in the coal stockpile to get us through. Right now the
country desperately needs unusually heavy rain quite soon. NIWA is
predicting average or low rainfall. If it doesn’t rain the high prices
will continue. These will hurt poor people most and more industries
will shut down putting more people out of work.

Assuming that nothing is done – as seems to be likely – the future
outlook is that the drive to shut down fossil fuel generation and
build more windfarms will exacerbate the problem of extreme price
fluctuations. When the wind is blowing, prices will crash and when it
stops blowing, prices will skyrocket and rotating blackouts may be
needed. Prices will continue to increase.

A recent government policy is to encourage industry to shut down
coal-fired boilers and turn to electric heat. Given the shortage
situation, the electricity can only come from burning more coal at
Huntly and for every tonne of coal industry saves Huntly will need to
burn 2 1/2 tons of coal to provide the necessary electricity. And the
latest is to subsidise electric cars that will also increase coal
consumption at Huntly. Madness.

If this is allowed to happen, industry and commerce will have no
alternative but to buy diesel generators and New Zealand will be in a
third world the same situation. In Nigeria 30% of the electricity is
generated by emergency diesels even though, like us, they have ample
gas resources.

To get out of this mess in the short term we need to:

- warn the public that lake storage is critically low and conservation
is needed;
- put a cap on the spot price of, say, 30 cents/kWh;
- set up a committee comprised of experienced power system engineers
to monitor the situation and make recommendations as needed;
- delay promoting electric cars and electric boilers until the power
system is more than 95% emissions free.

In the longer term, we need to:

- reform the electricity market;
- explore for more gas and, in particular, shale gas in the South
Island, to minimise coal consumption;
- consider adopting nuclear power.
Bryan Leyland MSc, DistFEngNZ, FIMechE, FIEE(rtd) is a Power Systems
engineer with 60 years of experience in the industry in New Zealand
and overseas.

-----

This wikipedia article describes the current setup along with
historical references to how electricity supply evolved from a
government department to what we have today:

https://en.wikipedia.org/wiki/New_Zealand_electricity_market

Briefly: both Labour and National have had a go at this, so neither is
likely to recognise the gravity of the 'dry year' threat we currently
have until the brownouts or blackouts are imminent or happening.

The core issue is that the industry benefits from the high spot prices
that occur what the hydro lakes are at low levels of water storage,
and the expansion of generating capacity (regardless of how it is
fueled) pushes spot pricing down - a total disincentive that should
surely be fixed.


--
Crash McBash
James Christophers
2021-04-12 03:56:41 UTC
Permalink
Post by Crash
-----
The primary reason for high electricity prices at the moment is that
nobody is responsible for ensuring that we have a reliable and
economic supply. Not the Electricity Authority, not the generators,
not Transpower. Not anyone.
According to the academic economists who run the market, market forces
should ensure that we have a low cost, adequate and reliable supply
even in a dry year. If they understood power systems they would
realise that the market lacks the inducements needed to ensure that
this happens.
The reality is that we have an electricity market that is not fit for
purpose. An efficient market would provide a reliable supply with
every new increment of generation chosen because it provides a
reliable supply and minimises the long term cost of electricity to
everyone.
Right now spot prices are between three and 10 times normal because
the lake levels are low and we don’t have enough gas or coal-fired
generating capacity. If it doesn’t rain heavily, the situation will
get worse.
The existing market makes new generation investment very risky. It
discourages investment in power stations that are a good long-term
investment and rewards generators with prices well above the cost of
generation when they have failed to provide sufficient generating
capacity.
To illustrate this, in their retirement speeches, two CEOs of
generating companies said that the way to make a profit in this market
is to keep the system on the edge of a shortage. It follows that when
a dry year comes along there is a risk of high prices and, possibly,
blackouts.
During shortages the generators jack up the prices because this is the
only way they can hope to affect demand. It doesn’t work for the
simple reason that most consumers are on contract prices so they don’t
see the price rise. The high prices severely damages many industries
who buy on the spot market and cannot afford to cut back production,
or like dairy companies, have no alternative but to keep on
processing. Others, like the paper mill at Whakatane, simply shut up
shop and put people out of work. According to the Major Electricity
Users group “If the prices continue on the pathway they are on… there
will be a number of major industrial operations in the country that
simply won’t be in business anymore.” “We’re looking at the loss of
thousands of jobs…”
In the “bad old days” the electricity industry gave early warnings to
consumers about the risk of shortages so that everyone could do their
bit towards reducing demand. As most people are public spirited, this
worked well without any need to increase prices.
In our brave new world the government has decreed that it will respond
to shortages and high prices by shutting down industries and
sacrificing jobs before asking consumers to reduce consumption. So
your lights stay on, but you lose your job and struggle to pay the
electricity bill.
At the moment the storage lakes that should be close to full are at
their lowest level in 20 years, we have a serious shortage of gas and,
thanks to the ban on exploration, this will get worse. The coal-fired
station at Huntly is now running flat out and it seems that the “last
ditch” oil fired gas turbines at Whirinaki are being called on.
If we had a properly coordinated system steps would have been taken to
ensure that sufficient energy was held in reserve in the lakes, in gas
storage and in the coal stockpile to get us through. Right now the
country desperately needs unusually heavy rain quite soon. NIWA is
predicting average or low rainfall. If it doesn’t rain the high prices
will continue. These will hurt poor people most and more industries
will shut down putting more people out of work.
Assuming that nothing is done – as seems to be likely – the future
outlook is that the drive to shut down fossil fuel generation and
build more windfarms will exacerbate the problem of extreme price
fluctuations. When the wind is blowing, prices will crash and when it
stops blowing, prices will skyrocket and rotating blackouts may be
needed. Prices will continue to increase.
A recent government policy is to encourage industry to shut down
coal-fired boilers and turn to electric heat. Given the shortage
situation, the electricity can only come from burning more coal at
Huntly and for every tonne of coal industry saves Huntly will need to
burn 2 1/2 tons of coal to provide the necessary electricity. And the
latest is to subsidise electric cars that will also increase coal
consumption at Huntly. Madness.
If this is allowed to happen, industry and commerce will have no
alternative but to buy diesel generators and New Zealand will be in a
third world the same situation. In Nigeria 30% of the electricity is
generated by emergency diesels even though, like us, they have ample
gas resources.
- warn the public that lake storage is critically low and conservation
is needed;
- put a cap on the spot price of, say, 30 cents/kWh;
- set up a committee comprised of experienced power system engineers
to monitor the situation and make recommendations as needed;
- delay promoting electric cars and electric boilers until the power
system is more than 95% emissions free.
- reform the electricity market;
- explore for more gas and, in particular, shale gas in the South
Island, to minimise coal consumption;
- consider adopting nuclear power.
Bryan Leyland MSc, DistFEngNZ, FIMechE, FIEE(rtd) is a Power Systems
engineer with 60 years of experience in the industry in New Zealand
and overseas.
-----
This wikipedia article describes the current setup along with
historical references to how electricity supply evolved from a
https://en.wikipedia.org/wiki/New_Zealand_electricity_market
Briefly: both Labour and National have had a go at this, so neither is
likely to recognise the gravity of the 'dry year' threat we currently
have until the brownouts or blackouts are imminent or happening.
The core issue is that the industry benefits from the high spot prices
that occur what the hydro lakes are at low levels of water storage,
and the expansion of generating capacity (regardless of how it is
fueled) pushes spot pricing down - a total disincentive that should
surely be fixed.
In which case, and for the umpteenth time, whither that continuing long-term vision; that continuing long-term plan; that continuing long-term execution?

Any hope? Ever?
Gordon
2021-04-12 08:17:37 UTC
Permalink
Post by Crash
-----
The primary reason for high electricity prices at the moment is that
nobody is responsible for ensuring that we have a reliable and
economic supply. Not the Electricity Authority, not the generators,
not Transpower. Not anyone.
According to the academic economists who run the market, market forces
should ensure that we have a low cost, adequate and reliable supply
even in a dry year. If they understood power systems they would
realise that the market lacks the inducements needed to ensure that
this happens.
This has its paralells with the need for a new Water Authority which the
Government is working on. Stragic thinking needs to rule, not the profit
market.

Someone needs to be in charge of making sure supply is plentiful, safe and
as cheap as possible.

Market Forces Government is showing how to get into a third world economy.
Rich80105
2021-04-12 21:42:18 UTC
Permalink
Post by Crash
-----
The primary reason for high electricity prices at the moment is that
nobody is responsible for ensuring that we have a reliable and
economic supply. Not the Electricity Authority, not the generators,
not Transpower. Not anyone.
According to the academic economists who run the market, market forces
should ensure that we have a low cost, adequate and reliable supply
even in a dry year. If they understood power systems they would
realise that the market lacks the inducements needed to ensure that
this happens.
The reality is that we have an electricity market that is not fit for
purpose. An efficient market would provide a reliable supply with
every new increment of generation chosen because it provides a
reliable supply and minimises the long term cost of electricity to
everyone.
Right now spot prices are between three and 10 times normal because
the lake levels are low and we don’t have enough gas or coal-fired
generating capacity. If it doesn’t rain heavily, the situation will
get worse.
The existing market makes new generation investment very risky. It
discourages investment in power stations that are a good long-term
investment and rewards generators with prices well above the cost of
generation when they have failed to provide sufficient generating
capacity.
To illustrate this, in their retirement speeches, two CEOs of
generating companies said that the way to make a profit in this market
is to keep the system on the edge of a shortage. It follows that when
a dry year comes along there is a risk of high prices and, possibly,
blackouts.
During shortages the generators jack up the prices because this is the
only way they can hope to affect demand. It doesn’t work for the
simple reason that most consumers are on contract prices so they don’t
see the price rise. The high prices severely damages many industries
who buy on the spot market and cannot afford to cut back production,
or like dairy companies, have no alternative but to keep on
processing. Others, like the paper mill at Whakatane, simply shut up
shop and put people out of work. According to the Major Electricity
Users group “If the prices continue on the pathway they are on… there
will be a number of major industrial operations in the country that
simply won’t be in business anymore.” “We’re looking at the loss of
thousands of jobs…”
In the “bad old days” the electricity industry gave early warnings to
consumers about the risk of shortages so that everyone could do their
bit towards reducing demand. As most people are public spirited, this
worked well without any need to increase prices.
In our brave new world the government has decreed that it will respond
to shortages and high prices by shutting down industries and
sacrificing jobs before asking consumers to reduce consumption. So
your lights stay on, but you lose your job and struggle to pay the
electricity bill.
At the moment the storage lakes that should be close to full are at
their lowest level in 20 years, we have a serious shortage of gas and,
thanks to the ban on exploration, this will get worse. The coal-fired
station at Huntly is now running flat out and it seems that the “last
ditch” oil fired gas turbines at Whirinaki are being called on.
If we had a properly coordinated system steps would have been taken to
ensure that sufficient energy was held in reserve in the lakes, in gas
storage and in the coal stockpile to get us through. Right now the
country desperately needs unusually heavy rain quite soon. NIWA is
predicting average or low rainfall. If it doesn’t rain the high prices
will continue. These will hurt poor people most and more industries
will shut down putting more people out of work.
Assuming that nothing is done – as seems to be likely – the future
outlook is that the drive to shut down fossil fuel generation and
build more windfarms will exacerbate the problem of extreme price
fluctuations. When the wind is blowing, prices will crash and when it
stops blowing, prices will skyrocket and rotating blackouts may be
needed. Prices will continue to increase.
A recent government policy is to encourage industry to shut down
coal-fired boilers and turn to electric heat. Given the shortage
situation, the electricity can only come from burning more coal at
Huntly and for every tonne of coal industry saves Huntly will need to
burn 2 1/2 tons of coal to provide the necessary electricity. And the
latest is to subsidise electric cars that will also increase coal
consumption at Huntly. Madness.
If this is allowed to happen, industry and commerce will have no
alternative but to buy diesel generators and New Zealand will be in a
third world the same situation. In Nigeria 30% of the electricity is
generated by emergency diesels even though, like us, they have ample
gas resources.
- warn the public that lake storage is critically low and conservation
is needed;
- put a cap on the spot price of, say, 30 cents/kWh;
- set up a committee comprised of experienced power system engineers
to monitor the situation and make recommendations as needed;
- delay promoting electric cars and electric boilers until the power
system is more than 95% emissions free.
- reform the electricity market;
- explore for more gas and, in particular, shale gas in the South
Island, to minimise coal consumption;
- consider adopting nuclear power.
Bryan Leyland MSc, DistFEngNZ, FIMechE, FIEE(rtd) is a Power Systems
engineer with 60 years of experience in the industry in New Zealand
and overseas.
-----
This wikipedia article describes the current setup along with
historical references to how electricity supply evolved from a
https://en.wikipedia.org/wiki/New_Zealand_electricity_market
Briefly: both Labour and National have had a go at this, so neither is
likely to recognise the gravity of the 'dry year' threat we currently
have until the brownouts or blackouts are imminent or happening.
The core issue is that the industry benefits from the high spot prices
that occur what the hydro lakes are at low levels of water storage,
and the expansion of generating capacity (regardless of how it is
fueled) pushes spot pricing down - a total disincentive that should
surely be fixed.
Thanks Crash. A remarkable article to have been posted by Farrar, and
effectively an admission that the privatisation by government in the
past has been a failure. It handed windfall profits to generators on
the basis of "replacement costs" for dams etc built by government. The
problem is that it is very difficult to unwind. The Wikipedia article
shows that this failure has been known for a long time, but the
publication on Kiwiblog may be a signal that National understands the
mistakes of the past - Kiwiblog has been used to float changes of
policy in the past.

The link is :
https://www.kiwiblog.co.nz/2021/04/guest_post_high_electricity_prices.html
Crash
2021-04-13 00:55:23 UTC
Permalink
Post by Rich80105
Post by Crash
-----
The primary reason for high electricity prices at the moment is that
nobody is responsible for ensuring that we have a reliable and
economic supply. Not the Electricity Authority, not the generators,
not Transpower. Not anyone.
According to the academic economists who run the market, market forces
should ensure that we have a low cost, adequate and reliable supply
even in a dry year. If they understood power systems they would
realise that the market lacks the inducements needed to ensure that
this happens.
The reality is that we have an electricity market that is not fit for
purpose. An efficient market would provide a reliable supply with
every new increment of generation chosen because it provides a
reliable supply and minimises the long term cost of electricity to
everyone.
Right now spot prices are between three and 10 times normal because
the lake levels are low and we don’t have enough gas or coal-fired
generating capacity. If it doesn’t rain heavily, the situation will
get worse.
The existing market makes new generation investment very risky. It
discourages investment in power stations that are a good long-term
investment and rewards generators with prices well above the cost of
generation when they have failed to provide sufficient generating
capacity.
To illustrate this, in their retirement speeches, two CEOs of
generating companies said that the way to make a profit in this market
is to keep the system on the edge of a shortage. It follows that when
a dry year comes along there is a risk of high prices and, possibly,
blackouts.
During shortages the generators jack up the prices because this is the
only way they can hope to affect demand. It doesn’t work for the
simple reason that most consumers are on contract prices so they don’t
see the price rise. The high prices severely damages many industries
who buy on the spot market and cannot afford to cut back production,
or like dairy companies, have no alternative but to keep on
processing. Others, like the paper mill at Whakatane, simply shut up
shop and put people out of work. According to the Major Electricity
Users group “If the prices continue on the pathway they are on… there
will be a number of major industrial operations in the country that
simply won’t be in business anymore.” “We’re looking at the loss of
thousands of jobs…”
In the “bad old days” the electricity industry gave early warnings to
consumers about the risk of shortages so that everyone could do their
bit towards reducing demand. As most people are public spirited, this
worked well without any need to increase prices.
In our brave new world the government has decreed that it will respond
to shortages and high prices by shutting down industries and
sacrificing jobs before asking consumers to reduce consumption. So
your lights stay on, but you lose your job and struggle to pay the
electricity bill.
At the moment the storage lakes that should be close to full are at
their lowest level in 20 years, we have a serious shortage of gas and,
thanks to the ban on exploration, this will get worse. The coal-fired
station at Huntly is now running flat out and it seems that the “last
ditch” oil fired gas turbines at Whirinaki are being called on.
If we had a properly coordinated system steps would have been taken to
ensure that sufficient energy was held in reserve in the lakes, in gas
storage and in the coal stockpile to get us through. Right now the
country desperately needs unusually heavy rain quite soon. NIWA is
predicting average or low rainfall. If it doesn’t rain the high prices
will continue. These will hurt poor people most and more industries
will shut down putting more people out of work.
Assuming that nothing is done – as seems to be likely – the future
outlook is that the drive to shut down fossil fuel generation and
build more windfarms will exacerbate the problem of extreme price
fluctuations. When the wind is blowing, prices will crash and when it
stops blowing, prices will skyrocket and rotating blackouts may be
needed. Prices will continue to increase.
A recent government policy is to encourage industry to shut down
coal-fired boilers and turn to electric heat. Given the shortage
situation, the electricity can only come from burning more coal at
Huntly and for every tonne of coal industry saves Huntly will need to
burn 2 1/2 tons of coal to provide the necessary electricity. And the
latest is to subsidise electric cars that will also increase coal
consumption at Huntly. Madness.
If this is allowed to happen, industry and commerce will have no
alternative but to buy diesel generators and New Zealand will be in a
third world the same situation. In Nigeria 30% of the electricity is
generated by emergency diesels even though, like us, they have ample
gas resources.
- warn the public that lake storage is critically low and conservation
is needed;
- put a cap on the spot price of, say, 30 cents/kWh;
- set up a committee comprised of experienced power system engineers
to monitor the situation and make recommendations as needed;
- delay promoting electric cars and electric boilers until the power
system is more than 95% emissions free.
- reform the electricity market;
- explore for more gas and, in particular, shale gas in the South
Island, to minimise coal consumption;
- consider adopting nuclear power.
Bryan Leyland MSc, DistFEngNZ, FIMechE, FIEE(rtd) is a Power Systems
engineer with 60 years of experience in the industry in New Zealand
and overseas.
-----
This wikipedia article describes the current setup along with
historical references to how electricity supply evolved from a
https://en.wikipedia.org/wiki/New_Zealand_electricity_market
Briefly: both Labour and National have had a go at this, so neither is
likely to recognise the gravity of the 'dry year' threat we currently
have until the brownouts or blackouts are imminent or happening.
The core issue is that the industry benefits from the high spot prices
that occur what the hydro lakes are at low levels of water storage,
and the expansion of generating capacity (regardless of how it is
fueled) pushes spot pricing down - a total disincentive that should
surely be fixed.
Thanks Crash. A remarkable article to have been posted by Farrar, and
effectively an admission that the privatisation by government in the
past has been a failure. It handed windfall profits to generators on
the basis of "replacement costs" for dams etc built by government. The
problem is that it is very difficult to unwind.
The wikipedia article shows that all of this was presided over by both
Labour (that started it) and National governments. Your biases are
showing yet again.
Post by Rich80105
The Wikipedia article
shows that this failure has been known for a long time, but the
publication on Kiwiblog may be a signal that National understands the
mistakes of the past - Kiwiblog has been used to float changes of
policy in the past.
https://www.kiwiblog.co.nz/2021/04/guest_post_high_electricity_prices.html
There is no suggestion of this. The post is not by DPF. You are
again showing your bias in your assumption that DPF only allows guest
posts by those he agrees with, and that there is a party-political
motivation in posting.


--
Crash McBash
Rich80105
2021-04-13 01:13:33 UTC
Permalink
Post by Crash
Post by Rich80105
Post by Crash
-----
The primary reason for high electricity prices at the moment is that
nobody is responsible for ensuring that we have a reliable and
economic supply. Not the Electricity Authority, not the generators,
not Transpower. Not anyone.
According to the academic economists who run the market, market forces
should ensure that we have a low cost, adequate and reliable supply
even in a dry year. If they understood power systems they would
realise that the market lacks the inducements needed to ensure that
this happens.
The reality is that we have an electricity market that is not fit for
purpose. An efficient market would provide a reliable supply with
every new increment of generation chosen because it provides a
reliable supply and minimises the long term cost of electricity to
everyone.
Right now spot prices are between three and 10 times normal because
the lake levels are low and we don’t have enough gas or coal-fired
generating capacity. If it doesn’t rain heavily, the situation will
get worse.
The existing market makes new generation investment very risky. It
discourages investment in power stations that are a good long-term
investment and rewards generators with prices well above the cost of
generation when they have failed to provide sufficient generating
capacity.
To illustrate this, in their retirement speeches, two CEOs of
generating companies said that the way to make a profit in this market
is to keep the system on the edge of a shortage. It follows that when
a dry year comes along there is a risk of high prices and, possibly,
blackouts.
During shortages the generators jack up the prices because this is the
only way they can hope to affect demand. It doesn’t work for the
simple reason that most consumers are on contract prices so they don’t
see the price rise. The high prices severely damages many industries
who buy on the spot market and cannot afford to cut back production,
or like dairy companies, have no alternative but to keep on
processing. Others, like the paper mill at Whakatane, simply shut up
shop and put people out of work. According to the Major Electricity
Users group “If the prices continue on the pathway they are on… there
will be a number of major industrial operations in the country that
simply won’t be in business anymore.” “We’re looking at the loss of
thousands of jobs…”
In the “bad old days” the electricity industry gave early warnings to
consumers about the risk of shortages so that everyone could do their
bit towards reducing demand. As most people are public spirited, this
worked well without any need to increase prices.
In our brave new world the government has decreed that it will respond
to shortages and high prices by shutting down industries and
sacrificing jobs before asking consumers to reduce consumption. So
your lights stay on, but you lose your job and struggle to pay the
electricity bill.
At the moment the storage lakes that should be close to full are at
their lowest level in 20 years, we have a serious shortage of gas and,
thanks to the ban on exploration, this will get worse. The coal-fired
station at Huntly is now running flat out and it seems that the “last
ditch” oil fired gas turbines at Whirinaki are being called on.
If we had a properly coordinated system steps would have been taken to
ensure that sufficient energy was held in reserve in the lakes, in gas
storage and in the coal stockpile to get us through. Right now the
country desperately needs unusually heavy rain quite soon. NIWA is
predicting average or low rainfall. If it doesn’t rain the high prices
will continue. These will hurt poor people most and more industries
will shut down putting more people out of work.
Assuming that nothing is done – as seems to be likely – the future
outlook is that the drive to shut down fossil fuel generation and
build more windfarms will exacerbate the problem of extreme price
fluctuations. When the wind is blowing, prices will crash and when it
stops blowing, prices will skyrocket and rotating blackouts may be
needed. Prices will continue to increase.
A recent government policy is to encourage industry to shut down
coal-fired boilers and turn to electric heat. Given the shortage
situation, the electricity can only come from burning more coal at
Huntly and for every tonne of coal industry saves Huntly will need to
burn 2 1/2 tons of coal to provide the necessary electricity. And the
latest is to subsidise electric cars that will also increase coal
consumption at Huntly. Madness.
If this is allowed to happen, industry and commerce will have no
alternative but to buy diesel generators and New Zealand will be in a
third world the same situation. In Nigeria 30% of the electricity is
generated by emergency diesels even though, like us, they have ample
gas resources.
- warn the public that lake storage is critically low and conservation
is needed;
- put a cap on the spot price of, say, 30 cents/kWh;
- set up a committee comprised of experienced power system engineers
to monitor the situation and make recommendations as needed;
- delay promoting electric cars and electric boilers until the power
system is more than 95% emissions free.
- reform the electricity market;
- explore for more gas and, in particular, shale gas in the South
Island, to minimise coal consumption;
- consider adopting nuclear power.
Bryan Leyland MSc, DistFEngNZ, FIMechE, FIEE(rtd) is a Power Systems
engineer with 60 years of experience in the industry in New Zealand
and overseas.
-----
This wikipedia article describes the current setup along with
historical references to how electricity supply evolved from a
https://en.wikipedia.org/wiki/New_Zealand_electricity_market
Briefly: both Labour and National have had a go at this, so neither is
likely to recognise the gravity of the 'dry year' threat we currently
have until the brownouts or blackouts are imminent or happening.
The core issue is that the industry benefits from the high spot prices
that occur what the hydro lakes are at low levels of water storage,
and the expansion of generating capacity (regardless of how it is
fueled) pushes spot pricing down - a total disincentive that should
surely be fixed.
Thanks Crash. A remarkable article to have been posted by Farrar, and
effectively an admission that the privatisation by government in the
past has been a failure. It handed windfall profits to generators on
the basis of "replacement costs" for dams etc built by government. The
problem is that it is very difficult to unwind.
The wikipedia article shows that all of this was presided over by both
Labour (that started it) and National governments. Your biases are
showing yet again.
I had not mentioned the political flavour of those governments; you
are correct that this was started by Labour and continued by National
however.
Post by Crash
Post by Rich80105
The Wikipedia article
shows that this failure has been known for a long time, but the
publication on Kiwiblog may be a signal that National understands the
mistakes of the past - Kiwiblog has been used to float changes of
policy in the past.
https://www.kiwiblog.co.nz/2021/04/guest_post_high_electricity_prices.html
There is no suggestion of this. The post is not by DPF. You are
again showing your bias in your assumption that DPF only allows guest
posts by those he agrees with, and that there is a party-political
motivation in posting.
I did not suggest that DPF only allows guest posts by those he agrees
with - that is clearly not true, but it is true that the blog is
essentially a political blog, and I believe DPF does make most of the
decisions regarding what guest posts are posted. In this case it does
not appear to be a 'dog-whistle' designed to wind up far-right
commentors, but the conclusions do apply to more than just the
privatisation of electricity generation. Certainly Kiwiblog has been
used to 'float' issues for the benefit of National / ACT.
John Bowes
2021-04-13 05:13:39 UTC
Permalink
Post by Rich80105
Post by Crash
Post by Rich80105
Post by Crash
-----
The primary reason for high electricity prices at the moment is that
nobody is responsible for ensuring that we have a reliable and
economic supply. Not the Electricity Authority, not the generators,
not Transpower. Not anyone.
According to the academic economists who run the market, market forces
should ensure that we have a low cost, adequate and reliable supply
even in a dry year. If they understood power systems they would
realise that the market lacks the inducements needed to ensure that
this happens.
The reality is that we have an electricity market that is not fit for
purpose. An efficient market would provide a reliable supply with
every new increment of generation chosen because it provides a
reliable supply and minimises the long term cost of electricity to
everyone.
Right now spot prices are between three and 10 times normal because
the lake levels are low and we don’t have enough gas or coal-fired
generating capacity. If it doesn’t rain heavily, the situation will
get worse.
The existing market makes new generation investment very risky. It
discourages investment in power stations that are a good long-term
investment and rewards generators with prices well above the cost of
generation when they have failed to provide sufficient generating
capacity.
To illustrate this, in their retirement speeches, two CEOs of
generating companies said that the way to make a profit in this market
is to keep the system on the edge of a shortage. It follows that when
a dry year comes along there is a risk of high prices and, possibly,
blackouts.
During shortages the generators jack up the prices because this is the
only way they can hope to affect demand. It doesn’t work for the
simple reason that most consumers are on contract prices so they don’t
see the price rise. The high prices severely damages many industries
who buy on the spot market and cannot afford to cut back production,
or like dairy companies, have no alternative but to keep on
processing. Others, like the paper mill at Whakatane, simply shut up
shop and put people out of work. According to the Major Electricity
Users group “If the prices continue on the pathway they are on… there
will be a number of major industrial operations in the country that
simply won’t be in business anymore.” “We’re looking at the loss of
thousands of jobs…”
In the “bad old days” the electricity industry gave early warnings to
consumers about the risk of shortages so that everyone could do their
bit towards reducing demand. As most people are public spirited, this
worked well without any need to increase prices.
In our brave new world the government has decreed that it will respond
to shortages and high prices by shutting down industries and
sacrificing jobs before asking consumers to reduce consumption. So
your lights stay on, but you lose your job and struggle to pay the
electricity bill.
At the moment the storage lakes that should be close to full are at
their lowest level in 20 years, we have a serious shortage of gas and,
thanks to the ban on exploration, this will get worse. The coal-fired
station at Huntly is now running flat out and it seems that the “last
ditch” oil fired gas turbines at Whirinaki are being called on.
If we had a properly coordinated system steps would have been taken to
ensure that sufficient energy was held in reserve in the lakes, in gas
storage and in the coal stockpile to get us through. Right now the
country desperately needs unusually heavy rain quite soon. NIWA is
predicting average or low rainfall. If it doesn’t rain the high prices
will continue. These will hurt poor people most and more industries
will shut down putting more people out of work.
Assuming that nothing is done – as seems to be likely – the future
outlook is that the drive to shut down fossil fuel generation and
build more windfarms will exacerbate the problem of extreme price
fluctuations. When the wind is blowing, prices will crash and when it
stops blowing, prices will skyrocket and rotating blackouts may be
needed. Prices will continue to increase.
A recent government policy is to encourage industry to shut down
coal-fired boilers and turn to electric heat. Given the shortage
situation, the electricity can only come from burning more coal at
Huntly and for every tonne of coal industry saves Huntly will need to
burn 2 1/2 tons of coal to provide the necessary electricity. And the
latest is to subsidise electric cars that will also increase coal
consumption at Huntly. Madness.
If this is allowed to happen, industry and commerce will have no
alternative but to buy diesel generators and New Zealand will be in a
third world the same situation. In Nigeria 30% of the electricity is
generated by emergency diesels even though, like us, they have ample
gas resources.
- warn the public that lake storage is critically low and conservation
is needed;
- put a cap on the spot price of, say, 30 cents/kWh;
- set up a committee comprised of experienced power system engineers
to monitor the situation and make recommendations as needed;
- delay promoting electric cars and electric boilers until the power
system is more than 95% emissions free.
- reform the electricity market;
- explore for more gas and, in particular, shale gas in the South
Island, to minimise coal consumption;
- consider adopting nuclear power.
Bryan Leyland MSc, DistFEngNZ, FIMechE, FIEE(rtd) is a Power Systems
engineer with 60 years of experience in the industry in New Zealand
and overseas.
-----
This wikipedia article describes the current setup along with
historical references to how electricity supply evolved from a
https://en.wikipedia.org/wiki/New_Zealand_electricity_market
Briefly: both Labour and National have had a go at this, so neither is
likely to recognise the gravity of the 'dry year' threat we currently
have until the brownouts or blackouts are imminent or happening.
The core issue is that the industry benefits from the high spot prices
that occur what the hydro lakes are at low levels of water storage,
and the expansion of generating capacity (regardless of how it is
fueled) pushes spot pricing down - a total disincentive that should
surely be fixed.
Thanks Crash. A remarkable article to have been posted by Farrar, and
effectively an admission that the privatisation by government in the
past has been a failure. It handed windfall profits to generators on
the basis of "replacement costs" for dams etc built by government. The
problem is that it is very difficult to unwind.
The wikipedia article shows that all of this was presided over by both
Labour (that started it) and National governments. Your biases are
showing yet again.
I had not mentioned the political flavour of those governments; you
are correct that this was started by Labour and continued by National
however.
Post by Crash
Post by Rich80105
The Wikipedia article
shows that this failure has been known for a long time, but the
publication on Kiwiblog may be a signal that National understands the
mistakes of the past - Kiwiblog has been used to float changes of
policy in the past.
https://www.kiwiblog.co.nz/2021/04/guest_post_high_electricity_prices.html
There is no suggestion of this. The post is not by DPF. You are
again showing your bias in your assumption that DPF only allows guest
posts by those he agrees with, and that there is a party-political
motivation in posting.
I did not suggest that DPF only allows guest posts by those he agrees
with - that is clearly not true, but it is true that the blog is
essentially a political blog, and I believe DPF does make most of the
decisions regarding what guest posts are posted. In this case it does
not appear to be a 'dog-whistle' designed to wind up far-right
commentors, but the conclusions do apply to more than just the
privatisation of electricity generation. Certainly Kiwiblog has been
used to 'float' issues for the benefit of National / ACT.
Yet again you lie in your attempt to justify your biased attitude Rich. Typical of trolls everywhere!
If you want to see issues floated you can't go past thestranded Rich. A Labour supported propaganda machine! DPF holds EVERY party to account for it's cockups/failures as does BDF!
George Black
2021-04-13 20:11:54 UTC
Permalink
When we have all these 'electrically powered vehicles' on the road we're
going to need lots and lots of power generation.
Coal is out.
Gas is a nono
And the Greens will stop further hydro development.
Petrol is gone and as for diesel powering all those heavy trucks
carrying groceries forget it
And farms back to horse power ploughing up to an acre a day
The greens will be out there on their pushbikes
John Bowes
2021-04-14 06:58:25 UTC
Permalink
Post by George Black
When we have all these 'electrically powered vehicles' on the road we're
going to need lots and lots of power generation.
Coal is out.
Gas is a nono
And the Greens will stop further hydro development.
Petrol is gone and as for diesel powering all those heavy trucks
carrying groceries forget it
And farms back to horse power ploughing up to an acre a day
The greens will be out there on their pushbikes
Geothermal power is the obvious and logical solution! Auckland is the perfect place for it due to it sitting in the middle of a volcanic field. My suggestion would be that the first station is built in Mt Albert so she can lead the nation in clean energy.
Oh and I'm pretty sure a good plower could manage a lot more than one acre day mate ;)
Rich80105
2021-04-14 11:19:10 UTC
Permalink
On Tue, 13 Apr 2021 23:58:25 -0700 (PDT), John Bowes
Post by John Bowes
Post by George Black
When we have all these 'electrically powered vehicles' on the road we're
going to need lots and lots of power generation.
Coal is out.
Gas is a nono
And the Greens will stop further hydro development.
Petrol is gone and as for diesel powering all those heavy trucks
carrying groceries forget it
And farms back to horse power ploughing up to an acre a day
The greens will be out there on their pushbikes
Geothermal power is the obvious and logical solution! Auckland is the perfect place for it due to it sitting in the middle of a volcanic field. My suggestion would be that the first station is built in Mt Albert so she can lead the nation in clean energy.
Oh and I'm pretty sure a good plower could manage a lot more than one acre day mate ;)
Google can be your friend
http://answers.google.com/answers/threadview/id/300069.html

So it depends on the ground, the number of horses, and how many hours
spent. 1 acre is probably reasonable for early ploughs with one horse.
How does geothermal power help plough fields in canterbury? Or power
vehicles on our roads?
John Bowes
2021-04-14 20:42:00 UTC
Permalink
Post by Rich80105
On Tue, 13 Apr 2021 23:58:25 -0700 (PDT), John Bowes
Post by John Bowes
Post by George Black
When we have all these 'electrically powered vehicles' on the road we're
going to need lots and lots of power generation.
Coal is out.
Gas is a nono
And the Greens will stop further hydro development.
Petrol is gone and as for diesel powering all those heavy trucks
carrying groceries forget it
And farms back to horse power ploughing up to an acre a day
The greens will be out there on their pushbikes
Geothermal power is the obvious and logical solution! Auckland is the perfect place for it due to it sitting in the middle of a volcanic field. My suggestion would be that the first station is built in Mt Albert so she can lead the nation in clean energy.
Oh and I'm pretty sure a good plower could manage a lot more than one acre day mate ;)
Google can be your friend
http://answers.google.com/answers/threadview/id/300069.html
So it depends on the ground, the number of horses, and how many hours
spent. 1 acre is probably reasonable for early ploughs with one horse.
Only for a socialist horse run by your glorious labour party Rich :)
Post by Rich80105
How does geothermal power help plough fields in canterbury? Or power
vehicles on our roads?
You are a dense widdle shit Rich! We have a lack of energy generating stations which is only going to get worse with idiots like you and your glorious Labour party ditching oil, gas and it's by products! Ploughing is liable to finish up being done by electric vehicles! I'd have thought even a comprehensionless Marxist muppet like you would be able to figure that!
George Black
2021-04-15 00:52:04 UTC
Permalink
Post by John Bowes
Post by Rich80105
On Tue, 13 Apr 2021 23:58:25 -0700 (PDT), John Bowes
Post by John Bowes
Post by George Black
When we have all these 'electrically powered vehicles' on the road we're
going to need lots and lots of power generation.
Coal is out.
Gas is a nono
And the Greens will stop further hydro development.
Petrol is gone and as for diesel powering all those heavy trucks
carrying groceries forget it
And farms back to horse power ploughing up to an acre a day
The greens will be out there on their pushbikes
Geothermal power is the obvious and logical solution! Auckland is the perfect place for it due to it sitting in the middle of a volcanic field. My suggestion would be that the first station is built in Mt Albert so she can lead the nation in clean energy.
Oh and I'm pretty sure a good plower could manage a lot more than one acre day mate ;)
Google can be your friend
http://answers.google.com/answers/threadview/id/300069.html
So it depends on the ground, the number of horses, and how many hours
spent. 1 acre is probably reasonable for early ploughs with one horse.
Only for a socialist horse run by your glorious labour party Rich :)
Post by Rich80105
How does geothermal power help plough fields in canterbury? Or power
vehicles on our roads?
You are a dense widdle shit Rich! We have a lack of energy generating stations which is only going to get worse with idiots like you and your glorious Labour party ditching oil, gas and it's by products! Ploughing is liable to finish up being done by electric vehicles! I'd have thought even a comprehensionless Marxist muppet like you would be able to figure that!
Last place I worked as tractor driver I had a number of 40 acre paddocks
to work up and crop. I very much doubt there are batteries with enough
power to even harrow such an area.
Ploughing is very energy absorbing and rotary hoeing even more so.
Direct drilling might just be able to look like working until problems
arisen(as they will)

George Black
2021-04-14 19:54:02 UTC
Permalink
Post by John Bowes
Post by George Black
When we have all these 'electrically powered vehicles' on the road we're
going to need lots and lots of power generation.
Coal is out.
Gas is a nono
And the Greens will stop further hydro development.
Petrol is gone and as for diesel powering all those heavy trucks
carrying groceries forget it
And farms back to horse power ploughing up to an acre a day
The greens will be out there on their pushbikes
Geothermal power is the obvious and logical solution! Auckland is the perfect place for it due to it sitting in the middle of a volcanic field. My suggestion would be that the first station is built in Mt Albert so she can lead the nation in clean energy.
Oh and I'm pretty sure a good plower could manage a lot more than one acre day mate ;)
:)
Just try and find a good ploughman with horse skills nowadays.
We did plough like that when I was a kid but I prefer a large tractor
with three point linkage nowadays.
Always fancied David Brown/Case.
John Bowes
2021-04-14 20:45:52 UTC
Permalink
Post by George Black
Post by John Bowes
Post by George Black
When we have all these 'electrically powered vehicles' on the road we're
going to need lots and lots of power generation.
Coal is out.
Gas is a nono
And the Greens will stop further hydro development.
Petrol is gone and as for diesel powering all those heavy trucks
carrying groceries forget it
And farms back to horse power ploughing up to an acre a day
The greens will be out there on their pushbikes
Geothermal power is the obvious and logical solution! Auckland is the perfect place for it due to it sitting in the middle of a volcanic field. My suggestion would be that the first station is built in Mt Albert so she can lead the nation in clean energy.
Oh and I'm pretty sure a good plower could manage a lot more than one acre day mate ;)
:)
Just try and find a good ploughman with horse skills nowadays.
We did plough like that when I was a kid but I prefer a large tractor
with three point linkage nowadays.
Always fancied David Brown/Case.
I'm pretty sure they still have plowing competitions using horses in Canterbury mate. It's like steam loco drivers they're still training keen people to fire them. Hell for 25 euros you can do a weekend course in the UK and a few years back they built a brand new steam loco! :)
Loading...