The last 12 months has seen electricity and energy supply, affordability and security continuously in the media with closure of manufacturing plants due to unsustainable pricing, Transpower signaling shortage of supply issues as early as 2026; and more recently significant gas price increases and concerns over future availability of natural gas.

Simon Watts, Minister for Energy tells us we will have  “announcements on potential reforms to the electricity market by the end of this month“. See here While on the same day Shane Jones is calling for nationalising the power companies.  

However given manufacturers need certainty of energy supply, that is – abundant, affordable, internationally competitive energy supply I am not confident the Ministers have grasped the immediate need nor the future opportunity.

As Bernard Hickey says “New Zealand doesn’t have an economy : it has a housing market with bits tacked on”.

Clearly the Coalition government have bought into Bernard’s description of the New Zealand economy.  On September 1 the Prime Minister announced that foreigners spending $5 million into approved investments in exchange for residency visas would also be able to buy homes worth $5m-plus. He said “the changes aimed to attract rich immigrants to boost the economy“.

I encourage the Prime Minister to broaden his horizons and reflect upon what Makoto Osawa, the Japanese Ambassador to New Zealand, had to say in September last year, when he met with Ministers to discuss energy supply and affordability.  Japan is New Zealand’s fourth largest foreign investor.  His interest was not in housing, but that “investors are interested in renewable energy, green hydrogen, and New Zealand’s emerging gaming and rocketry sectors“….

With respect to energy supply he is reported as saying “Predictability is very important for Japanese investment and I hope the New Zealand Government thinks about it very carefully and makes the right decision,” Osawa said.

When is the Coalition government going to grasp the fact that it is energy which fuels our economy … not housing.

Government Ministers have had the final draft of the Frontier electricity report since June.  Unfortunately, the focus was on electricity, in response to the 2024 wholesale price peaks. Also recently in the media recently, Brookfields, Canadian investment company is looking at buying Rockgas’s Clarus Group which includes Firstgas.

Now why would they be doing that if gas was running out?

Cynically I believe our gas suppliers have learnt from gentailer behavior – creating a perceived shortage does wonders for price increases – which will never be reduced.

What future New Zealand – our households, our manufacturers and our exporters need is an ENERGY policy focused on realising New Zealand’s abundant natural resources of sunshine, wind, rain and geothermal along with a single government agency responsible for delivering New Zealand’s future energy needs.

Clear policy focused on delivering secure, abundant and affordable energy is what local and foreign investors are seeking and until we have this our economy will continue to stagnate.  As a starting point that policy needs to

  • incentivise investment in new renewable generation including a focus on firming generation, or alternatively to incentivise owners of hydro assets to transition from base load supply to firming.
  • deliver real competition at retail by the separation of generation from retail.
  • bring competition to the distribution market, breaking up what are regional monopolies.