A clear choice

New Zealand First held its party conference over the weekend, and among all the weirdo cooker shit and outright racism, Winston dropped another election policy: a billion dollar subsidy for gas exploration, lest we be left behind in destroying the planet.

And today the Greens offered their alternative: a billion dollar investment in renewable firming for the grid, to help our energy transition and keep power prices low:

The Green Party wants to use its ‘Super Rich Tax’ to establish a publicly owned renewable energy company called Kiwipower, to fill the gaps they say the market has failed to fill.

The party says Kiwipower could use a combination of pumped hydro, geothermal and batteries to backup more intermittent renewable sources like wind and solar, making them a far better investment.

The party’s freshly released energy election policy would also see the wealth tax used to put solar panels on more than half of all public homes within four years, give renters access to plug-in solar, and expand the Warmer Kiwi Homes programme for insulation.

It would also invest $200 million for community-owned renewable energy and commit another $80m to Māori housing.

NZ First naturally offered no clue as to where their billion dollars would come from. The Greens, after years of the media crying "how will you pay for it!?!", said so explicitly. But its also worth noting that Kiwipower is an asset, and so the "spending" is largely an exercise in moving money from one column of the government's books to another. Ditto the mass installation of solar on state houses. And given what we know about home insulation, the "spending" will be more than saved in reduced downstream health costs. What does NZ First offer us? At best, a billion dollars down a black hole. At worst, the continued destruction of the global climate, with ongoing increased costs for health and natural disasters.

There's a clear choice here, and it should be obvious which one is a better deal, both for us as individuals, and for Aotearoa.

Good riddance?

It sounds like the regime is having second thoughts about its stupid plan for an LNG terminal:

The Government’s plan to build a liquefied natural gas import terminal in Taranaki to reduce electricity prices is in doubt.

A decision on the type of terminal and who will build it is due mid-year, but ministers are considering using that decision to rethink the project, potentially delaying it – or axing it.

Multiple Beehive sources say skyrocketing liquefied natural gas (LNG) prices, driven by the war in the Middle East, have changed the economics behind the idea.

[...]

However, the final decision, multiple ministers privately admit, may be to walk away from the project entirely, given the high prices.

Good riddance. It was always a stupid plan, more expensive than simply reducing gas demand, while leaving us dependant on imported fuel which could simply disappear in a crisis. And that's exactly what happened! There is a crisis, the LNG has disappeared, and its likely to stay gone for a long time (and longer the more National's "ally" Donald Trump fucks around). Those risks were always there of course, but they've happened quickly enough for the government to actually change its mind at least.

So what's the alternative? A mix of demand reduction - investing in electrifying industry to get it off gas - and building renewables to increase supply. That's perfectly do-able, and for only a fraction of the cost of National's $2.7 billion boondoggle. Of course, its not what the gas industry wants, so the question is whether the regime will be sensible, or continue to listen to its donors, even when everyone can see that what they want is total stupidity.

The right solution for the wrong problem

The regime has been taking a bit of stick about its "policy" of 10,000 new EV chargers, which seemed to have no tracking and no actual means of achieving it. So they've finally been forced to announce something: $50 million in loans to Meridian and ChargeNet to build a quarter of the chargers they'd promised. As a policy it doesn't stink, and has the virtue (to National) of being cheap (a loan from the government is just creating a pair of matching asset and debt entries in the government books, and costs nothing). It might even see some chargers built, which would be good. But its also a solution to the wrong problem.

National's "10,000 new chargers" policy is from 2023, which was a different era as far as EVs are concerned. And its rooted in thinking which is even older, when EVs were short-range luxury vehicles for urban elites. That wasn't really true in 2023, and its certainly not true now; when new EVs have comparable range to fossil vehicles, "range anxiety", the problem the new EVs policy was supposed to solve, simple ceases to be an issue. Sure, we want a comprehensive nationwide network so that vehicles can always get to a charger if they need one. But with most people charging at home, its not the big problem it once was.

So what is the problem? The same as it was before: price (though this is less of an issue now than it was in 2023, because EVs are cheaper as well as better). We had a perfectly good policy targetted at that problem, in the form of the clean car discount, which was self-funding (or meant to be) by charging dirty vehicles to fund clean ones. And that was a good idea, reflecting the significant positive externalities for EVs (and negative ones for fossil vehicles) in the form of emissions, air pollution, public health, and energy security.

But National scrapped that policy. And "10,000 new chargers" was meant to be just rhetorical cover for doing so. "Sure, we're refusing to act on the biggest barrier, but we'll totally act on the imaginary one our outdated preconceptions have invented, and we'll pretend that's the same". But it wasn't the same, and then they didn't do shit about it for two years anyway. Now they've finally been forced to do something, but all it does is expose the massive inadequacy of their policy and the paucity of their thinking. And looking down the barrel of an American fossil fuel crisis, that is something we should absolutely hold them to account for.

A government without a plan

Today the regime held an emergency, covid-style one o'clock press conference to announce its response to the US-caused global fuel crisis, at which they announced... nothing. Oh, they're monitoring the situation, and might consider cost of living assistance at some unspecified time in the future, if Rimmer lets them, but for now its strictly do nothing. Which is what you get in a crisis when you elect a bunch of anti-government weirdos who believe that government can only be a problem, and never a solution.

Meanwhile, there's a rising tide of commentary calling the regime's 2023 decision to shitcan the clean car discount, and subsequent decisions to weaken the clean-car standard, shortsighted. This would indeed be the week to be driving an EV, but thanks to this regime's fossil ideology, there are less of them on the roads than we would have had if they'd left it alone. And as we're all learning, electrified transport (and electrified everything else) isn't just about the climate - its also about the cost of living, energy security, and social resilience. National's shit decision-making has locked our country into a high-cost dependency on unstable foreign regimes.

So what should we be doing? Greater Auckland has a list of both short-term and longer-term measures. And while the focus is understandably going to be on getting us through the immediate shortages, now would be a great time for Labour to rise to the occasion, and stand up and tell us how they're going to crash-electrify all the things so that we don't have to deal with this issue again (the Greens of course already have, years ago). But I guess that would require them to have an actual position on something, and that seems beyond them at the moment.

National's energy security plan looks even stupider

A month ago, the regime announced its big plan for keeping New Zealand addicted to fossil fuels "energy security": a giant LNG terminal, importing expensive foreign high-emissions fuel, to be paid for by people who don't use it, and bulldozed through with a special law. It was always a stupid plan, more expensive than simply reducing gas demand, while leaving us dependant on imported fuel which could simply disappear in a crisis. And the events of the last week, which have seen the strait of Hormuz closed to shipping and international supplies of LNG cut off (causing a bidding war and price increases) show just how stupid it is. If National had their way, then in future crises we would face having LNG supplies - and therefore electricity prices - massively increase in price overnight. They would effectively link our domestic electricity prices to the stability of the Persian Gulf. And that is not anyone's definition of "security".

What would real energy security look like? reducing exposure to dirty foreign fossil fuels. Which in this case means a massive increase in renewable electricity generation, combined with a crash program to electrify gas-dependent industry. Obviously, that would be terrible for the gas industry, who wrote National's plan. And it would be terrible for the government's finances, because power cartel dividends mean they profit from our artificially high prices. But it would be good for the environment, and good for us. We would have significantly lower power bills as a result. And that is exactly why national, the party of gouging cartels, won't do it.

IN other words, if we want this, we need to kick them out. The sooner we do it, the better.

Pure Muldoonism

Back in the early 1980's, Robert Muldoon was thinking big. He wanted a giant dam on the Clutha River, which would flood half a town. But the courts applied the law, and wouldn't grant water rights for it. So Muldoon passed special legislation to overturn the court's decision and grant the water rights directly for his pet project. It was an unpleasant example of the naked authoritarianism and contempt for the rule of law that pervades our executive, and the National Party in particular.

Fast-forward 40 years, and the regime is again thinking big, and again has a pet project: an LNG terminal in Taranaki to keep gas prices high! But not even their corrupt fast-track law is fast enough for them, because it will actually have to look at evidence (and might even find it wanting if the applicants do the usual half-arsed job). So of course, they're simply going to legislate "consents" into existence, bypassing any pretence of due process:

A proposed liquefied natural gas terminal will bypass even the fast-track process in order to be built in time for winter next year, documents show.

[...]

The Cabinet paper, released after the announcement, noted that "timing is very tight" to get the facility up and running in time for winter 2027.

"An LNG terminal will require regulatory consents and approvals if it is to be operational ahead of winter 2027, and the existing Fast-track Approvals Act 2024 processes are unlikely to be sufficient," Watts wrote.

"I propose developing an Enabling Liquefied Natural Gas Bill to provide the necessary consents, approvals, levy power and any modifications to existing legislation to enable the preferred LNG facility to be built and operational ahead of winter 2027."

Winter 2027 is an entirely arbitrary deadline, aimed more at getting things done before the election, in the hope that this will prevent the next government from cancelling their bullshit. But what ones Parliament legislates, another Parliament can change, so any legislated consents can simply be cancelled and the contractor told to go fuck themselves. Alternatively, a future government could change the target of the levy from electricity to gas users, thus ensuring that the gas industry pays for its own insurance policy. And if they don't want to, well, why the hell should we?

Meanwhile, Christina Hood highlights MBIE modelling, (p 24 here) which shows that the regime's policy is really not the best one:

Sure, LNG will reduce electricity prices by $11/MWh a year in 2028 (and $58/MWh in a dry year). But bringing supply and demand back into balance will reduce them by $59/MWH ($123/ MWh in a dry year), and even more if we develop additional gas storage. The savings from that are about $1.4 billion a year (vs $265 million for LNG). And it would be cheap: about $200 million, or about one year of National's bullshit electricity levy. So why didn't they look at that?

The answer is obvious: because reducing gas demand is not what the gas industry wants. Avoiding that, and keeping its addicts supplied with their dirty fuel, is the entire point of an LNG terminal! Likewise, the electricity industry does not want lower electricity prices, because that means lower profits. So, we get a stupid policy, designed purely to protect the status quo and keep prices high. This is what National calls a "laser focus on bringing down the cost of living".

We deserve better than this. The next government should cancel this bullshit, fund a massive switch of industrial energy from gas to renewables (and a massive boost in renewable electricity to fuel it), and let the gas industry die in the bed it made. And we'll all be better off that way.

Utter madness

That's the only way to describe the regime's announcement yesterday that it plans to go all-in on climate destruction and build an LNG import terminal for "energy security". How will it pay for this new source of emissions? By taxing our (overwhelmingly clean and renewable) electricity supply! So kiwis who use clean and green electricity will be paying to subsidise dirty gas imports. Madness!

The "justification" for this is (of course) "security of supply" and "eliminating price spikes". But the government didn't even consider spending the full $2.7 billion cost of the terminal on renewable electricity generation (endless cheap power apparently being "woke" or something), let alone on a GIDI-style scheme to get high-value industrial users off gas entirely (which would be cheap: $200 million to wipe out 10 - 20 PJ of demand). As for "price spikes", they're an issue only for major industrial users to stupid and shortsighted to hedge. But then, that's the underlying problem, isn't it? Major industrial users - of both gas and electricity - being stupid and shortsighted. And so we all pay to subsidise their poor business practices.

(And its a hell of a subsidy - taxing electricity to pay for gas halves the price of imported LNG, making it only twice as expensive as the current wholesale price. What we're effectively looking at here is a huge wealth transfer, from ordinary kiwis to a handful of mostly foreign-owned, highly-polluting companies. But I guess they pay bribes to Ministers and we merely have votes...)

We're also paying to pretend that gas has a future, to keep people hooked. But with solar and batteries looking to rapidly decarbonise the electricity system, and higher prices driving users off gas, that's pushing shit uphill. This is an industry with no future. And the sooner we accept that and plan for its orderly demise, the better off we'll all be.

But perhaps the biggest condemnation of the plan is from the gas industry itself. After all, if LNG was such a shit-hot idea, you'd expect them to be paying for it, right? So the fact that they refuse to risk any of their own money, and are instead demanding that we all pony up to build their dream, tells us that they don't really believe in it. They're just another loss-making industry sticking their hand out. But if they won't pay for it, there's no reason why we should. If the present regime signs a contract for this bullshit plan, the next government should simply repudiate it, just as the regime did for the IREX ferries. And we'll all be better off when they do.

Trying to attract a stranded asset

Shane Jones is an outdated fossil of a minister. Born in 1959, his model of how our economy and society should look is stuck sometime in the late 70's: a dirty, fossil-fuel powered, racist, sexist, homophobic shitstain of a country which most of us never experienced, and most of those who did are glad we moved on from and desperately want to forget. But he's energy minister now, and that means being able to inflict his peculiar pathologies on the nation, including promoting the gas industry. And not content with moving to return us to the 70's by repealing the offshore drilling ban and making the government liable for oil companies' cleanup bills, he's currently touting for business in Singapore, offering new concessions in a desperate effort to attract foreign gas companies to come her and drill:

In a speech to the energy industry in Singapore this week, Shane Jones signalled a major change to New Zealand’s oil and gas exploration rules.

It appears the Government plans to remove restrictions that previously limited oil and gas exploration to defined block offer areas and instead allow oil and gas companies to apply for exploration permits across all of New Zealand’s territory.

Reading the speech, Jones doesn't just want drilling off Taranaki - he wants it in "the East Coast basin, Canterbury basin, and the Great South Basin" as well. Which would be a disaster for Aotearoa. But the good news for us - and the problem for Jones - is that no matter how far he lowers his pants to attract the oil industry, only a moron will take him up on it.

Part of this is what Jones calls "political risk" - the risk that the next government will simply ban drilling again and legislatively revoke all the permits without compensation. And part of it is because there's probably no gas to find (companies have been looking for years, and we haven't had any new offshore fields discovered since the early 2000s). But the fundamental reason is simply economics: even if they discovered a huge new field tomorrow, it would take a decade and a billion dollars to develop. And there simply won't be a market for gas in Aotearoa in a decade to repay the investment.

Gas was already dead - being driven out of the electricity market by wind and solar, and out of the industrial sector by the ETS and the push to reduce emissions. The writedown of supplies last week (if real, and not an industry scam to panic the government) is going to be the nail in the coffin. Methanex, the cornerstone user of the entire industry, won't stick around without supply, and will likely shut down permanently in a year or two (its already more profitable for them to simply onsell its gas to others). And the remaining big industrial users will see price hikes and supply shortages in their future and run for the exits. So, by the time a hypothetical new gas field came online in 2035 or so, it would be a stranded asset, with no-one to buy the gas. Anyone who wants to do it is ether a fool or a scammer.

Unfortunately, Jones seems unable to understand this. Which means we'll have to put up with more of his desperate efforts to "attract business" until we finally rid ourselves of him and his outdated worldview in 2026.

Gas is dead

The Herald had another announcement today about a new solar farm being officially opened - this time the 63MW Lauriston solar farm in Canterbury. It is of course briefly "NZ’s biggest solar farm", but it will soon be overtaken by Kōwhai park at Christchurch airport (168MW) and Tauhei (202MW), both of which are currently under construction and should be complete next year. And looking further ahead, the 400MW Te Rāhui farm near Tāupo should be building soon, along with a number of other big projects.

None of this has any form of government assistance. Instead, the government is still blathering about gas as a "transition fuel". Which is the thinking of twenty years ago. The last major gas-fired power station in Aotearoa was commissioned in 2007. While there have been a couple of "peaker" plants added since, they're much smaller and not intended for baseload generation. And there are no plans for any in the future: the last "live" gas project - Todd Energy's proposed peaker plant at Ōtorohanga - was cancelled years ago (though the consents for it have not yet expired). The market has spoken: the future is solar, and wind, and batteries. The gas industry is dead; it just hasn't realised it yet.

An inappropriate candidate

Last month I dug into the appointment of fossil-fuel lobbyist John Carnegie to the board of the Energy Efficiency and Conservation Authority. Carnegie was rejected as a candidate in two appointment rounds, being specifically not recommended because he was "likely to relitigate board decisions, or undermine decisions that have been made" and "likely to create tension or conflict with fellow board members". Despite this, then-Energy Minister Simeon Brown appointed him anyway. So how bad a candidate was he? RNZ's Eloise Gibson has done some digging of her own, and turned up a rather disturbing interview (on a cooker platform, to boot) where he rails against EECA's work:

"[Oil and gas companies] are asking what will happen in six or nine years if we get someone who basically a) wants to reintroduce Onslow [a massive pumped hydro electricity scheme], who basically wants to go back to the old policies so, b) wants to make fossil fuel technology harder to consent, reintroduces a 100 percent renewable electricity target, reintroduces GIDI... that was the state subsidised demand destruction... that's the question investors are going to be asking," he said.

GIDI was the Government Investment in Decarbonising Industry fund, under which EECA gave grants to heavy industrial companies to subsidise the costs of converting coal and gas boilers to electric or biomass.

GIDI has been scrapped. But EECA's core functions still reduce demand for oil and gas.

Whether he will effectively do that work, or whether he will try and sabotage it from within is left as an exercise for the media. But MBIE had pretty clearly reached their own conclusion on that question, which is why they recommended not appointing him.

Meanwhile, that rant - reintroducing Onslow (killing winter demand for fossil fuel peaking), making fossil fuels harder to consent, a 100% renewables target (now looking entirely achievable in an average year thanks to solar), reintroducing GIDI, and state-sponsored demand destruction to drive the fossil industry out of business - looks like a solid policy agenda which would give us both energy security and cheaper power. And hopefully we'll see exactly that when we throw this corrupt, climate change denying government out on its arse.

Investing in a stranded asset

In 2021, RefiningNZ, the owners of the Marsden Point oil refinery, took a hard look at its future, and decided that it didn't have one. The refinery was shut down and dismantled. But now Chris Luxon wants to build a replacement:

Prime Minister Christopher Luxon says the coalition Government is considering whether to build a new oil refinery amid the country’s energy production challenges.

It comes as the Government’s report investigating New Zealand’s fuel resilience, including the potential re-opening of the Marsden Point oil refinery, is expected to be released in the coming weeks.

[...]

Asked if he would build a new refinery, Luxon said: “Well, we’re going to go look at that, that’s something we’re going to look at”.

This is simply madness. The underlying reason for Marsden Point's demise - collapsing demand for fossil fuels - has not gone away, and if anything, has got worse. When banks are refusing lending to petrol stations because they're a long-term credit risk, you know that petrol and diesel just don't have a future. And while Channel Infrastructure projected continuing demand for jet fuel, that's just one technological shift away from a similar collapse.

Basically, Luxon is proposing that we spend $8 billion to build an asset which will likely be immediately stranded upon its completion. This is what Luxon calls "better economic management". And that's not even considering the emissions impact, which will be significant enough that the next government will have to cancel it to stay within our emissions budgets. But clearly Luxon doesn't care about those, despite meeting them being officially on his government's KPI list.

If the government really wanted to invest in fuel resilience, it would be investing in electrifying our vehicle fleet as quickly as possible. Because we don't need to import electrons from unstable foreign despotisms; they're produced right here in Aotearoa, from the wind and the rain and the sun. Every EV we use saves the country money, and is a boot in the nuts to the petro-tyrannies. It means cleaner air, lower health costs, and higher living standards for kiwis. But how does that help Luxon's rich mates?

Good riddance

The proposed Waimate garbage incinerator is dead:

The company behind a highly-controversial proposal to build a waste-to-energy plant in the Waimate District no longer has the land.

[...]

However, SIRRL director Paul Taylor said the sales and purchase agreement to purchase land from Murphy Farms, near Glenavy, lapsed at the end of last year.

The company gave no indication of where the plant may be located now it had lost the land.

So, South Island Resource Recovery may have got itself placed on National's corrupt fast-track list, but that list specifies the exact site, so they can no longer use it. And while they could find a new site and re-apply, they'd need to spend years gathering the required environmental data for the new site to support an application. Which means in practical terms that the whole thing is dead. Until of course it pops up in a new small town with a low-capacity local authority to start the whole scam again.

An appropriate process?

Back in December Energy Minister Simon Watts then-Energy Minister Simeon Brown appointed John Carnegie and Vijay Goel to the board of the Energy Efficiency and Conservation Authority. The appointments looked dubious - Carnagie is chief executive of Energy Resources Aotearoa, previously known as the Petroleum Exploration and Production Association of New Zealand: basically, an oil and gas lobbyist. And Goel is an accountant who runs a pokie trust. So, I sent in the usual OIA, seeking all advice and communications on the appointments. I received the response today, and it shows the appointments are even more questionable than expected.

Watts' response included an explanatory letter and over 500 pages of documents (most of which are redacted). Watts' short explanation is that:

10 candidates interviewed for the two board member roles. Initially seven candidates were shortlisted and interviewed. Subsequently, a further three people were shortlisted at my request and were also interviewed. I [sic] appointed the two new members for terms commencing 6 January 2025.

...which doesn't really give the full picture. MBIE ran an entire appointments process for two roles between January and June 2024. In June 2024 Watts Brown agreed to appoint one person (and rejected a recommended reappointment). MBIE drafted a cabinet paper, with appointment letters and everything, and then something clearly went wrong. No appointment was made, and the whole search began again. MBIE went immediately to the previous candidates, and here we learn that John Carnagie had applied in the previous round and was not recommended for the shortlist. Despite this, Watts Brown instructed MBIE to interview him, then instructed them to interview Goel as well.

The interviews were not successful. A briefing on 19 September reported that "MBIE does not consider the candidates suitable for appointment". For some reason - whether actual or anticipated Ministerial displeasure is unclear - this briefing was "put on hold", and then rewritten. The rewritten version reached the same conclusions: none of the Minister's picks were recommended. Carnagie was "on the lower end of suitability for appointment", while Goel was "not recommended for appointment to the Board". In an effort to appear more "scientific", they quantified these conclusions with an "assessment framework". And while the actual scores are redacted as "free and frank", you can see exactly what the interviewers thought of the candidates from what is bolded in the scoring sheets. Carnagie ranked highly on public accountability, but scored poorly on stakeholder relationship management, and was a terrible board fit, assessed as "likely to relitigate board decisions, or undermine decisions that have been made" and "likely to create tension or conflict with fellow board members". Goel was just a nothing candidate, with no actual interest in the role, no particularly strong areas, and assessed as "likely to make little contribution outside area of expertise". Despite this, both were appointed anyway, with the Minister certifying to Cabinet that "appropriate processes have been followed in selecting the proposed appointees" and that "invitations for nominations were publicised and that nominations received were considered". Yeah, right. In reality, those nominations were ignored in favour of Ministerial cronies, who were appointed regardless of merit, despite being assessed as unsuitable for the job.

Its a perfect example of National's cronyism. And yet another argument for why we need to take government board appointments completely out of the corrupt hands of Ministers, and put them in the hands of a neutral statutory appointments body.

Correction (3 March 2025): I had erroneously attributed the appointment decision to Simon Watts. The entire process was in fact overseen by Simeon Brown, who was then removed from the Energy portfolio a week before my OIA request was due. Watts' sole responsibility in this case was to sign off on the response to the request.

National's fast-track fucks our future

A few years ago, we looked to be on-track to a decarbonised future, with an international consortium led by BlueFloat Energy announcing plans for huge offshore windfarms off Taranaki and Waikato. But National's corrupt fast-track law just fucked all that:

Spanish offshore wind developer BlueFloat Energy is cancelling plans for wind farms off the coast of Taranaki and Waikato, citing “key uncertainties” about the route to market and the competition for allocation of the seabed.

The move comes after a controversial seabed mining plan was revealed to be among the 149 projects listed in the Government’s Fast-Track Approvals Bill.

Developers, including BlueFloat, have previously said the seabed mining project could shrink or completely eliminate the area available for offshore wind in South Taranaki, which is considered to have the country’s best wind resource.

This is an absolute disaster. In addition to GW of renewable generation, these offshore wind developments were expected to result in 10,000 jobs during construction and 2,000 ongoing ones for maintenance. It would have been a lifeline for the Taranaki economy, a replacement for its current fossil industry which would have allowed many fossil employees to move directly into new work. But National prefers to rip, shit, and bust for a tiny number of mining jobs with no wider benefits, to help a company which lies to the stock exchange.

Heckuva job, National. Hope you're proud of yourselves.

Not a solution

Aotearoa is currently suffering from one of its regular electricity crises, thanks to systematic underinvestment by the power cartel. Today. driven by business outrage over high power prices, the government announced its response to this, consisting of:

1. a thing which won't lower electricity prices at all (but will please donors);
2. a thing which will guarantee they remain high; and
3. a thing which might actually help, but probably won't.

And together, its hard to see how these are much of a solution. Looking at each of them in turn:

Reversing the offshore fossil exploration ban: this isn't going to lower power prices, because there isn't any gas to find (if there was, it would have been found already), and because of the ten to fifteen year lag between exploration and exploitation. So in the unlikely event that the fossil companies find gas, it might come to market in, oh, 2040 or so. Which is, coincidentally, well after the time by which we should have stopped using it altogether. If the government is worried about gas supply, it should shut down Methanex and free up their gas for other users. Sure, this would cost 300 jobs, but they're jobs we're already subsidising to the tue of $200,000 a year each, and the power crisis has probably cost us that many already (Winstone Pulp plus Oji recycling balances it). Shut down this pack of foreign exploitative polluters, and the problem goes away.

Importing LNG: the government is on-record as saying that imported LNG means an electricity price of $260 / MWh - lower than current crisis levels, but over twice the "normal" price that industry expects. And that's only based on fuel prices; once you factor in the costs of the terminal, and the profit margin for whoever builds it, it'll be much higher. So, building a terminal and importing LNG will mean sustained high electricity prices every winter. Great for the power cartel, but terrible for electricity users (including us retail peasants, who pay significantly over the average spot price as an effective hedge for the cartel). About the only good thing you can say about the government's plan is that at least they're refusing to pay for it. Instead, we will be - and through the nose. On the plus side, leaving it in the hands of Genesis, Contact, and Todd Energy will mean that it will take years, even if fast-tracked - which means there should be time for the next government to say "nope" and shut down the whole stupid idea.

Reviewing the electricity market: could do something useful, if allowed to look at the pricing model, but probably won't. Really just a way of appearing to do something while not really doing anything at all.

So what should the government do instead? The things which will help this year - a temporary Methanex shutdown and allowing the hydro lakes to dip into their contingency - have already been done. As for next year, the government needs to make that Methanex shutdown permanent to free up gas supply (in case we need it), then do some serious public investment in renewable generation and battery storage. The power cartel won't invest, so the government will have to do it itself. Rooftop solar is a useful part of this, because it doesn't need resource consent and can be built quickly - so a subsidy scheme to roll out an extra 50MW a year of that (on top of the 70 - 100 MW that is expected to be built) will help. As for grid-scale generation, the government doesn't need to build it itself: there's over a GW of solar generation and another GW of wind consented but unbuilt, and spending some money on pushing those projects forward so they get built next year rather than in 2026 or 2027 would help. But longer-term, setting up an SOE with the specific purpose of building renewables, flooding the market, and crashing the power price so we get negative electricity prices in summer would seem to be a Very Good Idea. And if in the process it burns all those thieves who bought into the public assets National part-privatised last time it was in office, all the better.

Alternatively, the government could use its ownership interest in three quarters of the power cartel to demand investment rather than dividends. But how likely is that?

The power cartel's nightmare

Aotearoa is currently suffering from one of its regular electricity crises, thanks to systematic underinvestment by the power cartel. Meanwhile, in Europe, electricity prices have gone negative:

European power markets are experiencing a notable shift as renewable energy sources, particularly wind and solar, become a larger part of the energy mix. On Wednesday, power prices in several European markets, including Germany, dipped below zero due to a surge in green electricity production.

In Germany, wind generation is expected to hit 22.7 gigawatts, the highest level in four months. This spike in renewable output has overwhelmed the grid, leading to negative prices during six separate hours on Tuesday, as recorded by Epex Spot SE. Negative pricing occurs when there is more electricity supply than demand, a scenario becoming more frequent as Europe continues its aggressive push toward renewable energy.

Why? Because energy companies have invested in renewable generation, driving expensive fossil generation out of the market and producing an oversupply. And its a similar story in California.

This is the power cartel's nightmare: free power! Which means no profits for them. And with more renewables and batteries being installed, its only going to get worse (though likely become merely very cheap, rather than negative).

So while NZ businesses are shutting down because power is too expensive, and National talking about expensive imported LNG as a "solution" (a "solution" which means a permanent rise in electricity prices for both industrial and residential users), think about the future we could have: a future where the government uses its control of the power cartel (or just a new SOE) to rapidly roll out solar panels and batteries to permanently lower power prices and bring cheap power to everyone. A future where it builds energy storage to end the dry year problem. A future where instead of shutting down, companies can use that power to make cheap, clean, goods. But there's no lobbyists for that future, and plenty of lobbyists for shortages and energy poverty. So we won't be getting it from National.

Stranded assets are not the answer

The power cartel's systematic underinvestment in generation has given us another electricity crisis, and the climate-denying government is using this to push its dirty solutions: new fossil generation, with an LNG import terminal to ensure there is enough gas. Which probably looks very attractive as a temporary stopgap measure. The problem is that once the current crisis is over, the investment in that stopgap measure will effectively be a stranded asset - making it a hugely expensive "solution" to a temporary problem.

Even the polluter lobby seems to understand this, with Energy Resources Aotearoa demanding an "investment guarantee" - otherwise known as a subsidy - for a new thermal power plant. Meaning they know such a plant would have no future; that even if it could secure a supply of gas to keep it operating, the pipeline of consented wind and solar being built will rapidly drive it out of the market, meaning it won't have the usual payback period required for such an investment. Its basically not a commercially viable proposition, even allowing for fossil generation's role as the price-maker and the resulting windfall profits to the power cartel.

The equation for LNG is even worse. Imported LNG is roughly twice as expensive as domestic gas (US$12.37/MBTU = NZ$19.63/GJ, vs NZ$10.97/GJ for industrial users).Methanex, which uses 45% of all our gas, won't want to pay that. Neither will anyone else. The exception being electricity companies, who can pass on those prices and (due to the broken market pricing model) generate windfall profits from them. So it will drive up electricity prices for everyone, but because electricity is more efficient than gas for most uses, will also further drive electrification as well. So, an expensive import terminal to supply fuel to a dying industry, which will increase the speed of death of that industry. Only a fool would pay for it. Unfortunately, as their whole conversation around energy and climate change shows, we are currently governed by fools.

If the government is going to subsidise or promote things to fix the underlying problems in the electricity industry, it could at least subsidise good things: renewables and batteries, or even baseload geothermal. These would increase electricity supply, lower electricity prices by driving fossil generation out of the market, and do so while not cooking the planet. But I guess none of that benefits the government's donors and cronies, so they'll be wasting money subsidising a polluting dying industry instead. But if they so so, the next government can and should repudiate their bullshit, and legislate to recover any wasted money.

Climate Change: Fossils

When the new government promised to allow new offshore oil and gas exploration, they were warned that there would be international criticism and reputational damage. Naturally, they arrogantly denied any possibility that that would happen. And then they finally turned up at COP, to criticism from Palau, and a "fossil of the day" award. And that's just the first few days!

Meanwhile, in more evidence of the government's denier trend, yesterday they refused to sign the Global Renewables and Energy Efficiency Pledge, which would have committed us to work with other countries to triple renewable energy and double the rate of energy efficiency improvements. These are global targets, with a big "national circumstances" clause - which for us includes the fact that ~90% of our electricity generation is already renewable. Many of the specific commitments are things like easier permitting, which are strongly aligned with the new government's program. So you'd think signing up for it would be a no-brainer, what MFAT calls an easy win: a reputational boost with no downside (and supporting global collective action as well). But apparently not. The hostility of the new government to anything "green" is such that they won't even sign up for the easiest, most obvious, least-cost action. Instead, they'd rather shred our international reputation and risk trade sanctions with a purely ideological call to keep on drilling in the face of global apocalypse. And then they wonder why people think they're fossils...

A pallid shade of Green II

Last month, the Greens introduced their clean power policy, promising loans and grants to upgrade homes to add solar panels and be energy efficient. Two weeks ago Labour released their response - a weak "pilot scheme" of energy efficiency grants, which I described as a pallid shade of Green. Today, they've followed that up with an incentive scheme for rooftop solar panels and batteries. And like their earlier energy efficiency effort, its good to see, but also a bit meh, offering too little money and too little ambition. And the latter is really on display in their plans for state houses: the Greens had promised a full refit scheme, with panels and batteries (and consequent zero summer power bills and massive improvements in tenant welfare, plus pressure on the private rental market to offer the same) for 30,000 state homes. Labour is promising to do a mere one thousand. Why? Because they'd rather loot the ETS funding which would pay for that in the name of "fiscal responsibility". Which, when we're facing a $24 billion bill if we fail to meet our climate commitments, seems to be the opposite of "responsible".

As with Labour’s previous offering, I'm left with the question: why vote for bullshit half-measures, when I could vote for the real thing instead?

A pallid shade of Green

Last month, the Greens introduced their clean power policy, promising loans and grants to upgrade homes to add solar panels and be energy efficient. Today, Labour responded with their own version: a "pilot programme" to improve energy efficiency, funded by the ETS. Details are light, but the big difference with the Greens' scheme appears to be that its mostly grants, with no interest-free loan component (so benefits the capital-rich who can afford the extra), and is narrower in focus, exclusively about insulation and electric heating and excluding solar panels, batteries, and EV chargers. So less money and more control-freaky, which is very Labour. And of course there's no commitment to a massive investment programme to put solar panels on state houses, because that would be spending money.

All in all, while its welcome to see any movement from Labour in this area, its also kindof weak and half-measures. A pallid shade of Green. The sort of policy National would offer. And the obvious question is why vote for the weak imitation when you can vote for the real thing?