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- Date published:
8:33 am, August 6th, 2025 - 20 comments
Categories: assets, Christopher Luxon, climate change, energy, Environment, Privatisation, privatisation -
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The country’s four main power companies have signed an agreement to stockpile coal and to extend the life of the coal-fired Huntly power station.
Genesis, Mercury, Contact, and Meridian control 85% of electricity supply and customers in New Zealand, and have sought Commerce Commission approval to make this market-dominating coal move together.
They want to stockpile up to 1.1 million tonnes of brown Indonesian coal and burn up to 10,000 tonnes of it a day whenever they deem it necessary.
Commerce Commission chair John Small must deny this outrageous cartel stitch-up. Only yesterday Commissioner Small said that if electricity suppliers were found to be misusing their market power to deter competition, it would take action.
Auckland Business Chamber chief executive Simon Bridges has said his members were uneasy or scared about raising complaints about their energy bills with their providers because they worried about retaliation.
Small said of this that “I contacted Simon because that’s really concerning. He got a group of his members together, the Major Electricity Users Group, people like that. I got the Electricity Authority and we had a couple of hours talking about it in a group,” he said.
When Prime Minister Luxon was asked if the government would break up the gentailers, he said that the single biggest issue was a supply problem because New Zealand didn’t have access to gas, “which we desperately need when we don’t have enough wind, rain or sun. We are the only country I know of, Corin, in the whole world that is making the rather unique transition from domestic gas to imported coal.” This is in the same week that his Minister of Energy congratulated the Big 4 on this stitch up for coal.
Just a reminder, Prime Minister Luxon runs the government that owns a controlling stake in three of the companies that have decided to make that transition to coal. They could easily have invested more in distributed storage and more solar and wind farms, to accelerate the decline of coal and secure electricity supply, and would not have needed to collude to extend the asset life of Genesis’ Huntly plant.
We should not lose hope about electricity generation as a whole.
Coal use is down to 2% by generator plant type, wind is up to 7%, and geothermal is up to 18%, according to the MBIE energy report of 2024. New Zealand is moving in the right direction, despite this market collusion.
The problem of dominance over us by Genesis, Mercury, Meridian and Contact is however getting worse not better. That dominance is clear by the Commerce Commission’s move to make complaints about the Big 4 anonymous for fear of retaliation.
Commissioner Small commented that complaint anonymity was vital: “That works for us in other areas like cartels and groceries where there’s the same kind of problem … People can tell you stuff absolutely securely, knowing their name is never going to be published or found out. It might be that it doesn’t get used, it might be all this goes away, sometimes a shot across the bows is all it takes to sharpen up behaviour.”
Prime Minister Luxon, while not specifying the class of asset, is clear that he will be seeking a mandate from the 2026 election to sell remaining state assets:
We would take it to the election and it would be part of our programme that we’d want to talk about and be upfront with New Zealanders about,” he said in January.
If the Auckland Chamber of Commerce and the head of the Commerce Commission are having to act to protect anyone who complains about the Big 4 now, just wait until they have no public constraint upon them whatsoever once they are sold off totally.
They are describing power not only over companies that use electricity, but also power over actual New Zealanders.
This is measured by the fact that last winter, over 360,000 households had difficulty paying their power bills, and 2% or about 100,000 of our 2 million households had their power disconnected at least once because they couldn’t pay a bill. The Big 4 made dumptrucks of money while they did so.
The alternative to base energy supply as burnt coal, is energy storage of other kinds such as a battery dam or a complex disaggregated storage system. Labour leader Chris Hipkins didn’t commit to anything on Morning Report on August 5th when interviewed on it, despite working on the battery storage system for two terms.
The current government doesn’t want to act. The regulator is cowed. The consumer is being ripped off.
This is no longer just a question of electricity.
It is a question of power and it is slowly killing us as an environment, as consumers and as a country.
Good Post AD. I like the collude ! IMO the Power 4 are an Oligopoly…(reminiscent of the Supermarket Duopoly) and they have fought very hard to gain their dominance (greedily swallowing up their minnow competitors)
You have linked in your post to the ripoffs, onya ! I also have commented and linked many other times how the Power 4 have cheated and ripped of NZ consumers. A couple (of many) for interest….
And this Meridian one still pisses me off…..Democratise Now !
I did comment on Open Mike recently about NACT1 and their Energy vision and would leave final words to Consumer's Jon Duffy..
Excellent post.
Yet another reason for Labour to adjust its comms strategy. It looks like National are organising a radical reorientation of NZ society. It’s not like the cartel and Nat policy are somehow distinct. They can’t be trusted. But why should swing voters trust Labour instead? If Labour aren’t front footing ethical responses, people just assume they’re bastards like National.
Yes, the rent seeking corporates are running a softening up campaign in the media – in the last few days there have been several articles on how wonderful 'asset-recycling' is. Complete with the usual bullshit about private sector being intrinsically more innovative and efficient, and pearl-clutching over public debt. The Greens have come out in favour of increased public borrowing (their recent Green fiscal strategy) but what of Labour – still wedded to the principles for responsible household fiscal strategy in the Public Finance Act. It is really disappointing the way no political party wants to discuss what the reality of being a currency issuer means for public finances.
Yet another indication that essential infrastructure shouldn't be left to "the market".
Re-nationalising power may yet become a popular choice.
The fake competition with energy supplies introduced by Bradford (Remember the promise that competition will cut power bills. Sic.) has had the inivatable result.
Even the right wing should note the effect on businesses within NZ.
Apparently the thought is stock pile a lot of coal for peaking supply?
And hope not to use it?
That would be a very generous interpretation
Who decides that, and at what price to customers?
Where is our choice?
As always. Maximising profit for the power Oligopoly.
Think just saying it's maximizing profit is a bit over simple here.
If/when coal is used it will basically set the market price at the coal fired price, that is true, and does make everything else highly profitable. On the other hand however the alternative at that point is brown outs. If we want to depend more on renewables then more battery capacity or environmentally friendly generation which can be active at the time is needed. It should also be understood that generators like wind bid at a loss and rely on higher price generation being needed to pay for building this capacity.
This is why its not really a profit motive problem. With the govt owning so much as well as regulating its going to be on them to get this investment to happen.
Some alternatives to consider include demand management, having devices which can be instructed to disconnect at peak times (like EV charging) or even making occasional brown outs more acceptable. These will require investment too.
If this yet happens then having Huntley sitting ready but idle will be a poor investment.
Ad, a while back you commented on MS' Post:
This should be happening much more in a NZ Energy conversation. The Future is looming fast. (that NACT1 light at the end of the tunnel? Its a fkn downbound train !) And at present it sure seems we have…NO plan.
Thanks for the post Advantage.
It's all so obvious.
A nationwide solar farm installs program and incentives for other 'moving parts' initiatives (wind farms, tidal, geothermal) or good sized EV chargers by industry or private interests.
15 years and we have new renewables as the main supply and the hydro for the back up/ night time.
Shareholders? Well acknowledge you've had a good run, didn't build enough quick enough and the assets are going to be returned to their rightful owners.
This message can't be hard to communicate, for every rentier shareholder there have to be 10 or 50 households struggling to pay a power bill.
Resilient communities, warmer healthy populace and moving towards our CC obligations.
Great post. Scandalous.
While solar is only 1% of the total (633MW) which is disgraceful, 32% of that was installed in the past year.
It is finally starting to happen-there are 19.8 GW of solar in the pipeline. There are also 6GW of battery storage in the pipeline (though some of this may need government encouragement/involvement) which is crucial for phasing out gas and coal.
Gentailers have been spectacularly useless in adopting renewables. Labour needs to create an SOE called Kiwi Solar backed by significant funding for state owned or joint-venture large-scale solar.
https://newsroom.co.nz/2025/07/18/solar-farms-in-investment-pipeline-could-triple-nzs-power-capacity/
Important to include promoting domestic solar and battery setups – which collectively would greatly reduce the demand for large scale generated power to supply houses, thereby increasing the margin for dry years and other contingencies.
True Andrew…rooftop solar is also very important…I should have mentioned it.
Rooftop is going bananas in Australia. It should be compulsory on new builds here. Kiwi Solar could promote this as well.
Rooftop residential solar is neither cost effective or energy efficient compared with grid scale solar plants.
I think using resources to encourage it is a mistake. While it is a good deal for individual households that can afford it, total costs, including externalities, are higher than for larger scale solar.
Factory roofs and large car park roofs are getting into the scale where it is worthwhile.
I suspect that for many, like me, it is less about cost or efficiency. It is more about having something that is fundamental to what I do, and having a way to control it myself. In other words household security.
We have one power grid, it ends up with a single wire to my apartment, and whole lot of failure points between it and the generators. This was brought home to me in 1998 when I moved into a new apartment and had 5 weeks of power supply problems because of drought breaking 1940s underground cables.
I live on my computers. So does my partner. That is where we work and where we send a considerable amount of recreational time – mostly from home. That is why I currently have a pile of batteries in my apartment – UPS'es are there to allow me to get through the reasonably frequent short outages as vector upgrades capacity or just has outright failures..
You could say the same about data, but there I have real choices. Fibre, 5G, and even Starlink if I wanted. More coming over time. Everything about the net I build in redundancy. Just as I have backups for computer gear or critical household appliances. Emergency supplies for civil disasters, water outages etc.
But I don't have serious alternatives for power apart from living with the grid and the rapacious power companies who have been shorting their new capacity for decades to drive up profits with higher prices so they can keep shareholders happy.
Electricity is our mortgage free households single largest utility bill. Currently about $3-4k per year and rising rapidly. It is starting to rival the Body Corporate levy that pays for ‘house’ insurance, repairs, water, sewerage, and community areas. I can't see any incentive for the current electricity system to reduce the costs of power or to make it more reliable.
$3-4kpa (plus counting in the anticipated price rises and the costs of maintaining UPS systems) gives me fast paybacks for a large solar + wind + generator + battery household system once we more to somewhere with our own roof. But as importantly I don't have to put up with unannounced failures, price rises, and lack of grid redundancies. I'd only have myself to blame.
I kind of agree. But a lot of people are going to put in household solar + batteries for my kind of reasons. Providing resources to encourage them to stay attached to the grid is probably a good idea. It would help to provide an buffering emergency system to for local areas. Just make the provision of resources dependent on controlled community access when the local cables are taken offline.
I’d do it in my apartment block, but Strata rules make that problematic. You have to herd 61 cats to a decison.
Yeah that's my instinct as well too.
A grid systems' core advantage is supply security.
Lots of areas of NZ are oligopoly controlled but way too many outages.
Our system will still connect to the network, but with storage enough for a full Wanaka winter cloud inversion.
There was a time when everybody's hot water was controlled.
.
Fortunately, the technology exists right now to ensure we can all become much more savvy guardians of energy.
It can save us money too.
Dynamic load control is a key example of this technology. Dynamic load control is a fancy term that means, in essence, smoothing the load on the energy system and helping it to flex, especially at times of high demand.
It can keep our hot water hot by heating it at times when the system is under less strain – and when it’s much cheaper to generate electricity in the first place.
Commentators such as Bernard Hickey have likened the household hot water cylinder to “the hidden battery in your home” – one in each house or apartment, adding up to a vast network of hot water “batteries” across New Zealand.
[…]
This clever technology, available and being used right now, can make a big difference overall.
How big?
According to energy commentators Stephen Batson and David Reeve, the amount of potential demand that can be shifted through smart hot water management is about the same size as the generation delivered by the entire Huntly Power Station.
https://www.nzherald.co.nz/business/how-smart-tech-can-solve-nzs-energy-challenges-neil-williams/VKUWWNPIVNG5ZPTJH27QW7W4FU/
https://archive.li/KBVjN
What an emotive unbalanced piece of "reporting"! Some points: the Indonesian coal burnt at Huntly is not brown, it's black. It's not about collusion or requiring coal. There are precious few alternatives able to back up renewables when there's no rain or wind or sun. Certainly no cheaper ones. Especially since the gas fields started running down in the last few years. Lots of wind and solar generation and batteries are being built but it will take a few years to build up. If they didn't do this "stitch up" as you call it, we wouldn't be able to get through a dry winter without severe power cuts. Pick your poison.
it doesn't make sense to put those three things in a sentence like that. While sun and wind have variable availability over days, hydro is a longer term storage tech. If companies can't manage that hydro lakes to store for the winter with our current weather patterns, then maybe we need to look at that. Take the profit motive out and see what happens.
Ultimately the issue here is about the limits of growth. We could be living within our means instead of continually needing more energy than we've got.