Owen Jennings: The Price to be Paid

The service station down the road in Auckland has 91 priced over $2.65 per litre for the first time.  It was only a few months ago it was under $2.00. 

Prime Minister Ardern said we are being “fleeced”.  More like we are being “skinned”, wool and all.  It seems to slip her mind that half the “fleecing” is being done by her government.  They are grabbing $1.45 of that $2.65.  Having ratcheted up spending the government now needs all the revenue they can get their hands on. Having captured a moment’s limelight for making the claim she has moved on, yet again to another publicity podium, unable to deliver any outcome of substance.

Our electricity prices are also escalating. 

Bryan Leyland: The underlying cause of the blackouts.

"You set the rules, we’ll play the game!" - the underlying cause of the blackouts.

The blackouts on the night of 9 August happened because we did not have enough generating capacity and we were unable to shed enough non-essential load. The spot price reached $300,000 per MWh - more than 1000 times normal. According to market theory it should have substantially reduced demand. It didn’t.

The immediate cause was lack of generation. Tokaanu hydro station shutdown because the intake screens got blocked by weed and starved the turbines of water. Huntly power station didn’t get enough warning of the need for more generation. Wind power dropped rapidly and substantially as the peak demand approached. Taranaki combined cycle station was not available for generation and, anyway, gas supplies were marginal. Not all our water heating load was shed because the industry reforms have decimated this previously world leading demand management system.