On Thu, 05 Sep 2024 16:14:23 +1200, Crash <
[email protected]d>
wrote:
On 5 Sep 2024 02:21:50 GMT, Gordon <[email protected]> wrote:
https://newzealandenergy.substack.com/p/field-of-dreams
Points out that NZ needs to build some more cheap power supplies so that >>industry will come. Paid for by the dividends to the Government from the >>power generators.
I agree that something needs to be done, but the article does not
quantify how much the dividends received by the Government are. A
quick couple of Google searches also failed to reveal this (reported
numbers are totals therefore include dividends paid to minority >shareholders). I have no doubt that the cost of new generation would
be considerably more that the Government receives in dividends from
the gentailers.
I would also remind readers that when the Government sold minority >shareholdings to private investors, the proceeds were used to retire >Government debt which had risen as the result of earthquake costs that
so affected Christchurch. So while the taxpayer funded generation
assets, they also retain majority ownership of those assets and
received payment for the minority shareholdings sold.
Also points out that back in the 70's the politicians new that more power >>would encourage industry.
Not really. There was considerable effort to get electricity as a
widely available commodity going back to the early 1900s. Muldoon's
'Think Big' projects simply resumed this push, which stalled in the
early 1960s when Manapouri stage 1 generation was completed.
The article says:
"The root cause is that our current market-based model ensures that we
will remain a country of energy scarcity.
We have privatized and fragmented the energy sector and now have the
inverse vision to Ray and his field of dreams. We have the �if they
come, we will build it� approach to energy infrastructure. We need
someone to buy the electricity or the gas before we will invest the
capital necessary to exploit these energy sources. This can only
result in continued scarcity.
The boards and CEO�s of our electricity generators have a fiduciary
duty to provide a return to shareholders. They are competing with each
other. No single entity has the capacity to radically overbuild and
create energy abundance, that would ultimately result in very low
energy prices. What we see instead is the boards of each of these
companies all nervously biting their nails and looking across the
fence to see what the competition is doing."
and later: "Each one of these things will have a material impact on
the other generators in the market. Hydro, geo-thermal and coal
generators for example will also be looking for curtailment mechanisms
which pay them to keep their plants online and available, but not
generating, while up to 1GW of offshore wind generation erratically
comes in and out of the grid.
So, they watch, and they wait, only investing in token incremental
additional generation such as 100MW of solar, which has a capacity
factor of 15%, so it only produces 15MW on average with a relatively predictable generation profile. As such there is no risk that it will de-stabilize the market. It looks good on the ESG report but does
little to address the scarcity in the market."
_____________
The problem is that the incentives for the companies are to keep
prices for power high - and to do that they have "gone slow" on
building more generation. They are not erquired to take power from
small generators, so while some small generators (large homes or small businesses) do get some money for excess electricity available to the
grid, it is at rates low enough not to be a big incentive.
In other countries, it is worthwhile for schools and other enterprises
with large roofs to install solar - and during school holidays their
own usage would be very low. Here it seems it does not make economic
sense - the cartel is able to keep payments to other generators low
enough so that they do not have to be competitive.
--- SoupGate-Win32 v1.05
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