National had proposed building a liquefied natural gas (LNG) terminal at Port Taranaki. Ostensibly this was to provide dry year support for the electricity generators to burn gas to run turbines whenever New Zealand had a dry year that caused hydro dams to be short of water. National were planning to have this signed up before the election. Act and NZ First appear to have quashed that. I guess that the level of outrage of consumers to being taxed yet again by the National government for their piss-poor 1990s energy management broke through.
There have been various iterations of how this emergency backup facility was meant to be paid for. But mostly it will, and has been, landing largely on the bills of residential consumers directly or indirectly. The problem is that it looks like a expensive short term band aid for decades of poor capacity management by the generators and their shareholders.
The biggest shareholder is the government, and this has been quite apparent in how the electricity ‘market’ operates.
The highest cost generation sets the prices for all generation within a time period – which provides the perverse incentive for generators to prioritise generating using the most costly. Typically fossil fuel generation.
The ‘market’ also has resulted almost complete lack of investment in new generating capacity relative to population or GDP.
While there have been new generating plant put into place, most of it has simply replaced plant that has had to retire. There is an impressive list somewhere on wikipedia of previously proposed generation projects over the last few decades, almost all of which were not proceeded with.
The ‘Bradford’ reforms also resulted in the grid that transports electricity being chronically under funded over the past decades. This is most apparent in the rapid rise of line rates recently which appear to have been mostly influenced by having to replace the Cook Strait HVDC lines that transport both ways between power between the North and South islands. This was a foreseeable cost, like most of the the electricity grid, however it appears that no money was accrued beforehand to do the replacement.
Personally, as a consumer, as soon as possible, I’m currently planning on moving off the our flaky poorly maintained grid as far as possible if not entirely. I’m tired of paying far too much for electricity. Not to mention having to maintain UPS batteries to power my comms and computers anyway because the grid and electricity lines companies tend to be unreliable.
Moreover, I can’t see much point in pushing generated power into the grid bearing in mind the exceptionally low returns and the operational habits of companies providing that service in Australia. Adding more batteries over time seems like a more economic proposition as they steadily redice in price..
I also don’t want to pay for gas to be burnt to provide better profits for gentailers, as they under-invest, over charge, and provide a service not for my benefit – but for their shareholders.
We’re renting at present in Invercargill for family reasons, having now sold our Auckland apartment. Apartments are really hard to make self-power generation. Next house (when we decide where it will be) will be getting a capital improvement designed to not pay a tax for National and other shareholders of our power ‘market’. Nor to burn gas.
Today, following European leads by France and the Netherlands, Germany is on task to eliminate all coal, all gas, and all oil use, by 2045.
NZ is just going to continue as a combustion wreckers yard in both transport and electricity.
I just find it irritating. I suspect that the whole thing has little to do with the electricity sector and more to do with industry and residential companies and individuals wanting to retain their gas equipment.
It is like the idiots who keep saying that there is oil and gas to find off our coasts. Of course there is.
Is it likely to be economic to exploit in the near future? Highly unlikely. It'd have been found by now. Exploration hasn't found a significiant exploitable field since 2005 and that was a peanut. My first degree was in Earth Sciences (1978-81) and one part of the courses looked at just how unexpected those Taranaki fields were. Not because of the deposition, just why it hadn't been fractured.
Gemini – date of discovery and proving estimates of production.
The problem is that we found the easy ones and they were mostly in a single mega geological structure. Pohokura was part of the south Taranaki fields found in 30m of water. The Tūrangi field was an onshore in Taranaki.
There was considerable offshore exploration outside of that structure over the decades, but nothing was found that was exploitable with anything like current technology.
If we hadn't found anything in 15+ years, and those weren't a large supply and it takes about 10-20 years to get a offshore field fully productive then the the gas industry was toast at the current usage rates.
Shutting Methonex would have conserved the supply when there was no obvious new sources found by about 2012. Instead they went and drilled in the Great South Basin 200km off shore. Quite how that would have helped is a exercise in a forlorn hope.
Anyway, I really don't want to NZ to burn gas outside of the concrete plant (unlike every other industry there are no decent alternatives for that). The whole gas industry is now toast.
I strongly suspect that the reason for the LNG terminal has nothing to do with dry years. Someone just wanted to prop up the gas infrastructure with a very expensive and unreliable (by distance if nothing else) supply line. Plus get the electricity consumers to subsidise cheap gas for industry.
But then Trump started a stupid war with Iran and got the inevitable result.
Yet. There are still those around who believe in magic.
Shane Jones included.
After more than a hundred years of exploration, we have found few economically exploitable fields. And those are well developed already.
The "plenty of oil in the Great South basin", shows the amount of ignorance around. Yes. Of course there is! I've seen samples. There is oil everywhere on earth.
Oil, that is worth the cost and complexity to get into production, economically viable, is another matter. Especially as New Zealand in particular, has ample proven and cheaper sources of alternative energy.
Oil companies will happily take subsidies, and tax write offs, from loons like this Government, for exploration, even at a loss, as the price of continuing to make billions selling hydrocarbons in New Zealand, and slowing the adoption of replacements.
Muldoon was right, to try and stem the economically suicidal flow of foreign exchange for oil and gas. That was then. Now we have even better alternatives.
That is a fascinating comment Ad. It leaves an invisible question mark – what will be replacing the old energies? Can you give a link so we can follow this up. I'm wondering as I thought Germany had eschewed nuclear, and France has not. So there would be a Power imbalance.
If someone could tell me when the roundabout is being stopped while the operator has a bite to eat and a drink and toilet stop, I would be pleased. One gets dizzy after a while.
When diesel goes to $4 a litre by this weekend, we'll get one more reminder of New Zealand's choice to spend that great gift of natural gas on farm fertiliser.
The figures claimed by the CoC to support the LNG terminal were cooked anyway.
They did not stack up under proper scrutiny and the decision had much more to do with National desperately trying to hold onto the Wanganui and New Plymouth electorates at the coming election with the promise of "thousands of jobs".
National always claim there will be "thousands of jobs" created with any of their hare-brained schemes but only a fraction of the promised jobs ever eventuate.
That should read 'hair-brained schemes'. As in image accompanying Mermaid No.1. See – On Track: https://thestandard.nz/open-mike-25-09-2026/#comment-2073683
Shane Jones, of course, remains undeterred.
https://www.rnz.co.nz/news/politics/1552986/government-puts-40-point-5-million-towards-two-gas-exploration-projects