In response to energy shortages that have led to a surge in wholesale power costs, The New Zealand government has unveiled a raft of reforms in the energy and electricity sector.
Energy Minister Simeon Brown said Monday in Wellington, that the reforms are aimed at improving energy security and affordability.
“New Zealand needs abundant, affordable energy,” Brown said. “That’s why the coalition government is taking a series of immediate actions to restore confidence to our energy sector and remove regulatory barriers that have stopped firms generating electricity or bringing in the fuel that Kiwis need.”
The cost has seen some large manufacturers reviewing the future if their businesses. Winstone Pulp International is considering a proposal to cease its pulp and timber manufacturing operations indefinitely as costs become prohibitive.
Low lake levels have curbed hydro generation at the same time as there has been a shortage of gas due to outages, leading to soaring power prices.
Methanex Corp. has temporarily closed its New Zealand methanol plant and agreed to sell its gas entitlements to Contact Energy and Genesis Energy. The two power companies said that will allow them to generate more power from their gas-fired plants.
Rio Tinto has curbed electricity use at its Tiwai Point aluminum smelter under a demand response agreement with Meridian Energy, freeing up more power for the national grid.
Prime Minister Christopher Luxon said New Zealand power prices are currently among the highest in the western world and the country is facing an energy security crisis, “no doubt about it.”
However, the government will pass legislation by the end of 2024 to reverse a ban on offshore oil and gas exploration, it said today. It will also remove regulatory barriers to the construction of facilities to import liquefied natural gas, including legislating consents for an LNG terminal.
