Tuesday, August 02, 2005



Solving Auckland's power problems?

Todd Energy has put forward its solution to solving Auckland's power problems, proposing the construction of three gas-fired power plants within Auckland itself. This would make Transpower's national grid upgrade unnecessary for a few more years, and in addition result in a more efficient network as power would be generated close to demand. It also has the advantage of Aucklanders bearing the environmental cost of their own consumption; demands by Aucklanders for transmission lines and coal-fired plants elsewhere effectively dump the costs of Aucklanders' power usage on other communities.

Todd doesn't have to worry about security of supply because they already own a large chunk of New Zealand's natural gas reserves. If they go into the electricity business, then they get to burn it themselves, incidently hiking the costs for other generators - so they win on that front too. But despite this, they're still sticking their hand out for a subsidy, claiming that "some form of additional funding will be required". To which the response should be to tell them to bugger off. Gas generation is relatively cheap to construct, there's little need for additional infrastructure (there's plenty of capacity on the gas pipe into Auckland, at least south of Westgate), and there are no issues with security of supply (which was the justification for the government's agreement with Genesis over the E3P station at Huntly). And there's certainly no question of it being competitive to run, even with the carbon tax. In short, the market is perfectly capable of supplying this; a subsidy would only be enriching the Todd family at the expense of the New Zealand taxpayer.

13 comments:

good thinking batman! Now where does the gas come from, given that NZs "reserves" were wasted and will be running out from 2007.

Posted by gazzadelsud : 8/02/2005 12:06:00 PM

you might also wish to consider the energy efficiency consequences of transforming one form of useable energy to another?

Posted by gazzadelsud : 8/02/2005 12:08:00 PM

maybe they can tap all the methane from aucklands rubbish tips and sewerage.

Posted by Anonymous : 8/02/2005 01:01:00 PM

Gazza: Todd is a major player in the gas market, and clearly believes that there is enough, or at least if there isn't, that there will be enough for them, and that they will reap the profits while others are priced out. Gotta love the market...

(I should also add that there are some very promising exploration prospects, which mean that its not nearly as bad as you suggest. And now that the price is up to the market rather than the government, the maui mistake - selling it ludicrously cheap - is unlikely to be repeated).

As for your other point, yes, it is better to burn gas directly for heating at the point of demand rather than turning it into electricity and seeing 40 - 45% of it wasted, and the government should certainly be encouraging greater use of domestic gas as an efficiency measure. But electricity is also needed, and gas is a reasonably good way of generating it.

Posted by Idiot/Savant : 8/02/2005 01:41:00 PM

Another point: this doesn't really obviate the need for transmission line upgrades; while generation close to demand is good, I don't think its really efficient to try and achieve self-sufficiency for every region, and so we still need an efficient national grid to move power around. However, sticking additional generation in Auckland at least buys us a bit more time to think about the best way to do that and deal with the feral NIMBYs in Waikato.

All things being equal, I would prefer that the ARC did what the WRC has done, and seriously investigate and promote wind power in its region. If even half of Wellington's projects go through, that city will run totally on wind for much of the time. Auckland doesn't have nearly as good a wind resource as Wellington, but it could certainly do a lot more in this area. Instead, though, they insist on others bearing the costs of their usage...

Posted by Idiot/Savant : 8/02/2005 01:42:00 PM

actually i think you'll find Todd is counting on LNG - any thoughts on the safety of these floating bombs on our oceans or in our major harbour, or is your concern restricted to nuclear vessels?

Posted by gazzadelsud : 8/02/2005 02:07:00 PM

my guess is that gazza is right. if we needed gas to fire stations we could always secure a deal with the aussies.

isn't the timor sea full of this stuff?

Posted by Anonymous : 8/02/2005 03:59:00 PM

Gazza: Bluntly, I think you're wrong. Todd is not relying on LNG - not when they own a large chunk of Kapuni and half of Pohokura, and can burn it themselves rather than sell it to others. If their optimism is unfounded, then they may force Contact to rely on LNG - but that would just boost Todd's profits even further.

(As for LNG, the tankers have an excellent safety record, and while one would make a substantial mess if it exploded - we are talking small nuclear weapon here - none actually have. I'd rather we didn't resort to LNG, but not for reasons of safety...)

Posted by Idiot/Savant : 8/02/2005 04:43:00 PM

Gaz: I think the facility will be on the Manukau not the Waitemata. I think there may already be a facility there at the moment near Papakura (?).

I think Mercury were going to build a power station in the Penrose/Southdown area but were thwarted by National's electricity reforms.

As for the Timor Sea: NZ could sign a deal with East Timor and cut Australia out. Everyone wins. Those disgustingly dirty Aussies and their rapacious greed in regard to the Timor Gap fields is legendary. Collaborating with Indonesia in allowing the genocide and then trying to screw our region's poorest country out of it's only real natural resource. Cut them out! Viva Timor L'Este!

Posted by Bomber : 8/02/2005 04:47:00 PM

Interestingly Todd reckon that Kapuni can keep supplying after Maui runs out (07?) and the following table is from the Crown Minerals web page Todd directs you to

WHile I am not an expert, it doesnt look like there's a lot left

Now while I acknowledge I was pulling your tit earlier. I think the issue of nuclear power versus LNG is real and that you do yourself a disservice by not looking at the quite large literature worrying about the risks posed by LNG tankers - not inherently, but as a target incidentally.

Of course Tim is correct, if its only the Manukau, well who cares anyway? :-)


--------------

Producing net gas reserves as at 1 January 2004
Field Operator Total reserves (Bcf) Remaining reserves (Bcf)
Maui* STOS 3521.9 495.99
Kapuni* STOS 1437.6 447.83
McKee Todd Taranaki Ltd. 180.7 64.31
Tariki/ Ahuroa* Swift 114.1 41.35
Mangahewa Todd Taranaki Ltd. 82.2 59.79
Waihapa/ Ngaere Swift 29.1 0.39
Rimu/ Kauri* Swift 65.8 63.31
Kaimiro/ Ngatoro Greymouth Petroleum 21.7 5.33
Total 5453.10 1178.32
* Includes LPG
All figures have been quoted at P50 recoverable reserves.
---------------------------------

Posted by gazzadelsud : 8/02/2005 07:21:00 PM

pahukura was listed on the same site, but for non-producing reserves at 700bcf (whatever one of those is -not a huge number)

Posted by gazzadelsud : 8/02/2005 07:23:00 PM

you'll be delighted to hear that from todays dom (section C3), Todd announces that it intends to meet the need by -importing LNG.

So bluntly idiot, you were wrong- where's my apology?

and while you are at it you have some very odd views about the US, why Juan Cole can be trusted, and why bob "windy" fisk can be trusted on any issue (some commentators wonder why "Fisk" has become a verb)

- you may wish to pre-emptively apologise in advance for those mistaken views too, or should we simply regard them as the impetuosity of youth?

Posted by gazzadelsud : 8/03/2005 10:45:00 PM

Gazza: yes, I just saw that in the herald (link). Like Contact and Genesis, they're looking for security of supply after 2015 if there are no new discoveries and if they build more than the initial 200 MW. But yes, I was wrong; Todd isn't as optimistic as they first came across.

Oh, and a bcf is a billion cubic feet, or 1.07 PJ in real units. Now that Methenex has been priced out of the market, we use about 100 PJ a year, around half for electricity production and half for residential and industrial use. Current modelling is suggesting a supply crunch in 2015, hence the interest in LNG. As for the safety issue, current plans are to put any LNG port in New Plymouth, so it can simply be fed straight into the existing pipeline network. If something goes wrong, well, we were never that fond of New Plymouth anyway.

I don't like LNG because it leaves us vulnerable to global gas prices. But if Contact want to sink a large amount of money into an investment that has a high risk of being stranded by new gas discoveries, that's a matter between them and their shareholders. meanwhile, saner companies will go on building wind turbines.

As for nuclear, I just don't understand why the right are so hot for it. Really, you'd almost get the impression they were just pushing it to keep up their wanker-cred...

Posted by Idiot/Savant : 8/04/2005 01:28:00 AM