Instead, residential consumers have been forced to subsidise commercial and industrial customers who have the financial, analytical and legal resources to pressure the electricity sector to keep their prices down.

On the supply side, the sector’s profits have increased substantially, largely due to their ability to manipulate the “marginal cost” pricing system – see the graph below:

In effect, New Zealanders have swapped a low cost, public-service electricity system for a wide “choice” of high-cost suppliers, each of whom seeks to maximise shareholder profits by manipulating the market at our – and the environment’s – expense. Here’s just one example.

Victoria University economist Dr. Geoff Bertram has written about this previously here and here, and, now retired, recently gave a highly informative slide presentation to the group Engineers for Social Responsibility.

Dr. Bertram explains how the Tiwai smelter and Huntly power station are used to keep power prices high, and concludes with ways to reform the electricity sector to create a fairer, more equitable market for this essential commodity.

A Youtube video of his talk, including questions at the end, can be found here.

NB: For those new to the topic, here’s a useful overview of the history and structure of New Zealand’s electricity sector.

The post The Great New Zealand Electricity Scam appeared first on Coal Action Network Aotearoa.

9 July 2020–The announced closure of Tiwai Point is welcome news for the clean energy future of New Zealand, and presents huge opportunities in areas such as electrifying transport and developing new, high-tech industries, Coal Action Network Aotearoa said today.

Provided this is not a negotiating tactic, Tiwai’s shutdown should see the closing of the country’s only coal-fired power station at Huntly, which Meridian persuaded Genesis to keep it open as part of the deal it did with Rio Tinto in 2016.

Will this be the end of the Huntly coal-fired power station?

“We now have a massive opportunity to look at where and how we will use the renewable energy that will be freed up: we could electrify the South Island’s rail network, and make huge steps toward electric transport,” said CANA’s Rosemary Penwarden.

Once the smelter is closed, New Zealand’s emissions will drop by upwards of 1.5 million tonnes a year, emissions the taxpayer has been subsidising NZ Aluminium Smelters for.
“At today’s carbon price of $33, the 1.3 million units the company received for free last year would this year cost the taxpayer $42.9 million: we trust the government will use this huge saving to work toward meeting our zero carbon goal,” said Penwarden.

CANA warned against big process heat users like Fonterra converting to electricity for its South Island coal boilers as using electricity this way is massively inefficient, and Fonterra needed to be looking to biomass to switch to.

“We don’t want to lock ourselves into a system that would require new thermal electricity – like the gas-fired power stations being built right now in Taranaki. These should stop,” said Penwarden.

“Today, there are going to be a lot of Southland families wondering about their futures. It’s crucial the Government provides support to Southlanders to transition towards a resilient low-carbon economy. Great South has already been doing a lot of work transitioning away from fossil fuels, and creating jobs in renewables. This experience will stand them in good stead to deal with this new challenge.”

CANA also warned that the Government must make NZ Aluminium / Rio Tinto fully pay for the clean-up of the site and ensure there was full remediation, not least because the plant is right next to an internationally-recognised conservation site.

“We have already seen part of Rio Tinto’s toxic legacy being nearly swept away in the Mataura floods, and the taxpayer is being forced to pay.  There is an unfortunate recent history of toxic remediation being left to the government to pay for, and we absolutely cannot let this happen here,” she said.

“Rio Tinto has a very poor international reputation as a good environmental citizen, and we must hold them to account to exit cleanly.”

The post The end of Tiwai Point could open huge opportunities for NZ appeared first on Coal Action Network Aotearoa.