Confirmation the electricity market is broken

[Praktica]

Interesting interview of Simeon Brown by Jack Tame on Q&A this morning but very Brown's attitude of placing thermal/gas fed generation as the preferred option in dealing with the current situation was disappointing to the point of infuriating. (First 14 minutes of this Youtube link).

Firstly beyond the usual blame on the previous government spiel he then goes on to say that the Lake Onslow proposal was damaging because it caused the existing generators to pull back on developing new capacity. That to me sounds very much like the incumbent electricity suppliers sensing a threat to their cosy market dominance and then pulling whatever levers they could to ensure the failure of the project. Keep in mind that those generators are government owned so by association our government is restricting long term development of potential solutions to our electricity supply issues on multiple fronts.

Secondly Jack pushed Simeon on the comparative cost effectiveness of developing a LNG terminal vs. blanket rooftop solar rollout. Of course Simeon played the irregular generation of solar but Jack countered that with the approach that solar can be used when available to mitigate hydro dam flows thereby utilising their significant storage capacity as a virtual battery. Simeon absolutely refuses to recognise this potental, instead doubling back on his claims that gas powered thermal generation is the only option NZ has to address the current generation shortfall.

It must also be kept in mind that the way our electricity supply system structured the wholesale price is calculated every 30 minutes based on the most expensive generation method being used at that instant which in the case of peak loading is thermal gas or coal fired. That rate then applies to all generation being used at that time so is effectively a huge windfall for the hydro generators whose cost of generation is far less than what they can charge on the wholesale market. Yahoo... money in the bank! The strategy that Simeon Brown is proposing by pushing for thermal generation including by the use of even more costly imported LNG will effectively lock NZ consumers into higher prices for longer. Again this is an added windfall for the existing gentailers as well as restricting the viability of solar and wind capacity by the smaller players, who are stuck with selling their generation into a market biased by the huge advantages being enjoyed by their competitors and potentially onsellers of that generation.

The system is well and truly broken and based on Simeon Brown's utterances in this interview it is unlikely this government will do anything to improve that situation.

Hmmm....we know that some MPs seem to have signed up to support their donors' agendas. I wonder if simple simeon has been bought by someone?