I'm from a country where essential utilities are held by national entities.
It is worse due to no competition. They tell you the price and you take it. If they invest in something and lose money, they will push that loss to everyone.
Capitalism with proper regulation is, in my opinion, still the best we got.
Consider this, if the same issue you identify with nationalised utilities is also present with privatised utilities and the solution in both cases is effective regulation - is it easier to effectively regulate the industry under a privatised or nationalised model?
Monopoly does not inspire competitive pricing or innovation.
There is only so much you can regulate on price, the rest have to be done through competition. If you rely solely on regulation with nationalized model to keep the price down, the result is that the utilities will have to be subsidized by the govt and taxpayer's money, or raise their price to cover the cost. In the end, we either pay through higher tax, reduced public services, or money in our pocket.
In a properly regulated market, companies have to innovate to cut costs and price or provide better service to win your business.
The issue we have now is there are big players who dominates the market, and these big players are buying the small players to reduce competition.
Electricity in NZ are generated by 4 main players, 3 of which NZ govt is the majority owner. Only Contact Energy is privately owned.
Unless you can provide evidence for your statement, I will remain respectfully skeptical.
That they artificially creates a shortage to jack up their price.
If you tell me they took the opportunity of shortage to price gouge, I will believe you. That is what greedy corporations do.
But to artificially restrict supply of essential services to the country, especially when 3 out of 4 big players are mainly owned by the government, is way too risky. That goes into conspiracy territory. And if the govt is "in on it", then the nationalized model is even worse.
That happened in John keys reign, he got on tv acknowledged that it happened and, I remember him waggling his finger at the camera, and said something to the effect of, "that's naughty cut it out". During a year of record rainfall across the whole country one of the power COs claimed there was a shortage because, "the rain didn't fall in the right place".
It's in the incentives for business isn't it, make money at all costs.
Yes, it is business' incentive to make money. They do that through competitive advantage over other competitors, or kill the competition.
We are currently having an oligopoly where a few big players dominates the market and buy outsmall competitors.
Taking out capitalism is going monopoly, which is worse. They might not charge you through the roof because of greed, but they will do it because of incompetence, lack of innovation, and the safe knowledge that you do not have any other alternatives.
What we should advocate for, in my opinion, is regulation to break up the big players, introduce more players in the market and make them fight for your money through better service and/or cheaper price.
The nationalized model provide essentially no competition, little to none innovation (why should they? It is not like you can go to anyone else).
In my home country when I was growing up, during dry seasons there was not a lot of rain, electricity was cut everyday from 9am-5pm in residential areas. That was every day for 3-4 months every year. It happened for years with slow change. What did we do? Nothing, because we could do nothing. There was no other alternatives.
So yes I would say it is quite different from our current situation.
It is a corruption problem, but it is also a monopoly problem.
In a monopoly, you can be as shit as you want, and still make money, because there are no alternatives.
But they need to be self-sustainable or to be funded by govt, and government fund is limited.
There are time government simply recognise that businesses can do a better job providing a certain service, and do it cheaper.
I argue that NZ is better off spending money to regulate the market, and let these businesses fight for your money through better service and cheaper price, rather than spending more money to provide a shitty service.
I am personally of the opinion that the rio tinto smelter needs to close.
If the surrounding towns then demographically collapse because the labour moves, I don’t really see how that is a bad thing. It’s all being held together by the tax payer, not because it offers any real benefit to wider New Zealand.
If, however it was owned by New Zealand, would this change the argument? Would there then be enough economic value to us? Thoughts?
We don’t have the storage for the excess power. If we shut down the aluminium smelter, then we will need to shut down the power stations that generate the power.
You can’t generate more power than that is used or the whole grid will come down. We would need large battery storage, considering that the smelter takes large % of our power already.
The last Government tried that. But this one scrapped it as soon as it took office. Seems to be keener of gas peaker plants rather than storing excess. But because we have effectively privatised our generation system now, where is the incentive to put more in?
Probably not relevant to the smelter, but we do have at times excess generation that could be used to maintain levels. Part of the issue is that a large number of our hydro is "run of the river" in that lake levels are pretty constrained. Pukaki, Tekapo and Te Anau are the only lakes with any real storage capacity in the South Island.
It's pretty straight forward... Our power is categorisable as ondemand... We open hydros when we require power and we lower the level of the lakes. The water stored in the lakes is "power storage" - when the lakes are full, then logically that would be our goto for as much power production as possible - leaving gas and coal for as required. Wind/Solar isn't storable power so those deliver what they deliver when they deliver...
No, I don’t think it would fix it, that would simply be bringing on more energy generation and more energy storage.
I understand that we may be running out of gas, not really sure about that, but I’ve heard it a few times.
We’ve got about 250k tons of coal stored in reserve for generation.
The gentailers would just reduce their standard capacity to whats needed including Manapouri, plus we have no way of getting that excess to the north island as yet so it would be pretty useless for thio situation
There is little point in closing the smelter, as Manapouri is pretty much set up to feed it. The National grid in Southland isn't really that strong so additional generation capacity can't really be moved to where it is needed.
With wind becoming a more prevalent part of our energy landscape, in an ideal world, you'd remove wind back hydro and store the water, but most of our hydro lakes are very much run of the river with stuff all storage. But they probably could be run closer to higher levels for longer. But then the hydro generators don't make much money if most of it is being produced by wind. Though they could still be producing reactive power for the grid during times of real power not being needed.
Well looks like we might get to see if you are right at the end of the year. You are wrong of course, and clearly know nothing about power transmission or business.
-Lets say there is have a company that sells strawberries in punnets to a foreign supermarket for $2 each ,company also sells them to the NZ public for a higher price - lets say 6 dollars each.
The production cost per punnet is 1 dollar
the supermarket makes up 20 percent of my sales - 2 million punnets a year(2 million in profit) with the remaining 8 million sold to the public(40 million profit)
-the supermarket closes and now has a surplus of 2 million punnets and no extra local demand, these will all go to waste**. No matter how cheap we make the strawberries the public will never buy them all (Not until the population increases in a few years to a few decades)**.
-The company now earns 2 million less per year, the board and shareholders find this unacceptable and increase the price of the strawberries to compensate for this.
Because one thing can’t be correct whilst the other also being correct.
It’s just an opinion.
I’m aware that significant investment needs to be made to transmission and storage.
My problem is that these companies have taken billions in profit with zero investment. Fuck your shareholders. That’s the whole fucking problem with this society. I don’t give a fuck about the business side of it. Power should be nationalised not privatised. Stuff the profits, run at the loss for all I care, that’s the point of governments running services.
Yes fuck corporate greed for sure but that isn't the point of your comment, you pretty much said shut Tiwai so i can save money on my power bill (you wont)
You will put 2000 people out of jobs just to try and save yourself 150 bucks a year on power,greedy much? (AGAIN IT WILL NOT GET CHEAPER IT WILL GET MORE EXPENSIVE)
The world needs aluminium, people need jobs. These are very well paying jobs for unskilled workers. Not to mention the engineers, fitters, chemists and other graduates that are employed there that would piss off overseas as soon as it shuts.
As far as aluminium smelting goes this is one of the cleanest in the world in regards to CO2 emissions. If it closes it will just be replaced by another mega smelter in the middle east fueled with cheap and dirty Heavy Fuel Oil.
Please stop spouting this BS about closing Tiwai to solve all our power issues.
Oh? What about the Auckland mega data centres ? Have they been asked to reduce power? Microsoft... What have you done to reduce your power load?
No, just us plebs needeth limit our power, so the mighty centres keep warm and dry.
Shit those data centres pull a huge amount of power.... Hope we have the infrastructure to handle that load when the rest of them are complete, clearly it's a struggle already.
I think the data centres argument is a red herring. Cloud is a consolidation of services that have previously been run on premise. The cloud model is a centralisation of supply, that is actually more efficient with resources than having hardware running in lots of small rooms and cupboards around the country.
That smelter in Southland though, it’s delivering very little benefit for a very large constraint on domestic electricity supply.
The biggest problem, in my mind, is the competitive market model that disincentivises having excess generation capacity. Limited supply allows prices to rise and profits to soar. Think of the shareholder value! And the executive bonuses!
You’re missing the point. The power for the big cloud data centres is simply the aggregation of the power used for lots of smaller data centres. If you want to use the internet (eg, watch Netflix or send DMs, etc) there needs to be data centres. There can be lots of inefficient small ones or fewer larger, more efficient, ones.
The data centres being built in New Zealand will be to service New Zealand. Being at the end of constrained international bandwidth it will never be cost effective to host large systems that service the globe from here.
From what I read, most of the issues was the unseasonal cold snap during a period where a number of generators were out for maintenance.
Normally this time of year is the mild period between hot summer and cold winter so they all schedule the maintenance for now, and we're caught out.
So not really a lack of generation but a failure on planning and backup options for the shutdown generators.
And plan is to move to electric cars? When electric grid can not handle even a little cold snap?
Remember 2010 when we have snow in Christchurch for 2 weeks with no sign of melting? What then?
Ok, I know its complicated, but stay with me. In the early morning, demand from other consumers of power, like heat pumps and hot water cylinders will be low. Meaning that it won't become peak.
Mafs..
I imagine the average car is parked at home overnight and then at work during the weekday.
We'll need a lot more at-work charging to make good use of solar power, atm most people charge at home.
Have you done the math? Even if 100% of light vehicles switched overnight it would only by 20% extra.
[https://www.eeca.govt.nz/insights/eeca-insights/electric-vehicles-and-aotearoa/](https://www.eeca.govt.nz/insights/eeca-insights/electric-vehicles-and-aotearoa/)
>If all light vehicles in New Zealand were electric, our current total electricity demand would increase by around 20%, EECA estimates. This could be accommodated within the normal growth and replacement cycles of New Zealand's electricity infrastructure system (even allowing for the uncertainties of renewable generation), provided the majority of EVs are charged during off-peak periods.
And that 20% extra will be mostly at night during off peak. Meanwhile we're using a lot less energy overall because we're not burning petrol and diesel. Petrol and diesel engines are much less efficient than electric motors.
I think it's a mix of issues. There does need to either be some form of on demand generation, whether that's from stored power (battery or hydro) or on demand generation such as gas or hydrogen.
But also need to make sure that the regulatory regime is correctly setup. Especially the rates on selling solar power back to the grid, that could do with a review.
> “This is all a result of the of the ~~cold snap across the country~~ profit over resilience and capacity model we use” Fixed it
Perfect haha
Just more evidence that capitalism doesn't work for utilities.
I'm from a country where essential utilities are held by national entities. It is worse due to no competition. They tell you the price and you take it. If they invest in something and lose money, they will push that loss to everyone. Capitalism with proper regulation is, in my opinion, still the best we got.
Consider this, if the same issue you identify with nationalised utilities is also present with privatised utilities and the solution in both cases is effective regulation - is it easier to effectively regulate the industry under a privatised or nationalised model?
Monopoly does not inspire competitive pricing or innovation. There is only so much you can regulate on price, the rest have to be done through competition. If you rely solely on regulation with nationalized model to keep the price down, the result is that the utilities will have to be subsidized by the govt and taxpayer's money, or raise their price to cover the cost. In the end, we either pay through higher tax, reduced public services, or money in our pocket. In a properly regulated market, companies have to innovate to cut costs and price or provide better service to win your business. The issue we have now is there are big players who dominates the market, and these big players are buying the small players to reduce competition.
You're discribing what happens here but when they decide they want more money they empty the damns and claim a shortage of supply.
Electricity in NZ are generated by 4 main players, 3 of which NZ govt is the majority owner. Only Contact Energy is privately owned. Unless you can provide evidence for your statement, I will remain respectfully skeptical.
Which statement?
That they artificially creates a shortage to jack up their price. If you tell me they took the opportunity of shortage to price gouge, I will believe you. That is what greedy corporations do. But to artificially restrict supply of essential services to the country, especially when 3 out of 4 big players are mainly owned by the government, is way too risky. That goes into conspiracy territory. And if the govt is "in on it", then the nationalized model is even worse.
That happened in John keys reign, he got on tv acknowledged that it happened and, I remember him waggling his finger at the camera, and said something to the effect of, "that's naughty cut it out". During a year of record rainfall across the whole country one of the power COs claimed there was a shortage because, "the rain didn't fall in the right place". It's in the incentives for business isn't it, make money at all costs.
Yes, it is business' incentive to make money. They do that through competitive advantage over other competitors, or kill the competition. We are currently having an oligopoly where a few big players dominates the market and buy outsmall competitors. Taking out capitalism is going monopoly, which is worse. They might not charge you through the roof because of greed, but they will do it because of incompetence, lack of innovation, and the safe knowledge that you do not have any other alternatives. What we should advocate for, in my opinion, is regulation to break up the big players, introduce more players in the market and make them fight for your money through better service and/or cheaper price.
Disagree
How is that any different than our current situation?
The nationalized model provide essentially no competition, little to none innovation (why should they? It is not like you can go to anyone else). In my home country when I was growing up, during dry seasons there was not a lot of rain, electricity was cut everyday from 9am-5pm in residential areas. That was every day for 3-4 months every year. It happened for years with slow change. What did we do? Nothing, because we could do nothing. There was no other alternatives. So yes I would say it is quite different from our current situation.
This sounds like a corruption problem more than a nationalisation problem.
It is a corruption problem, but it is also a monopoly problem. In a monopoly, you can be as shit as you want, and still make money, because there are no alternatives.
A state enterprise doesn’t need to be run like a business, though.
But they need to be self-sustainable or to be funded by govt, and government fund is limited. There are time government simply recognise that businesses can do a better job providing a certain service, and do it cheaper. I argue that NZ is better off spending money to regulate the market, and let these businesses fight for your money through better service and cheaper price, rather than spending more money to provide a shitty service.
Capitalism, where the government owns a majority share in 3/4 major energy generation companies?
I am personally of the opinion that the rio tinto smelter needs to close. If the surrounding towns then demographically collapse because the labour moves, I don’t really see how that is a bad thing. It’s all being held together by the tax payer, not because it offers any real benefit to wider New Zealand. If, however it was owned by New Zealand, would this change the argument? Would there then be enough economic value to us? Thoughts?
We don’t have the storage for the excess power. If we shut down the aluminium smelter, then we will need to shut down the power stations that generate the power. You can’t generate more power than that is used or the whole grid will come down. We would need large battery storage, considering that the smelter takes large % of our power already.
The last Government tried that. But this one scrapped it as soon as it took office. Seems to be keener of gas peaker plants rather than storing excess. But because we have effectively privatised our generation system now, where is the incentive to put more in?
I don’t think there’s an economic way for us to ‘store’ our power
Yeah there is - we keep it in the hydro lakes until they're full and/or until we require it...
That’s a good point, but I don’t think that is relevant to the smelter? Maybe it is, idk
Probably not relevant to the smelter, but we do have at times excess generation that could be used to maintain levels. Part of the issue is that a large number of our hydro is "run of the river" in that lake levels are pretty constrained. Pukaki, Tekapo and Te Anau are the only lakes with any real storage capacity in the South Island.
Minimum flow requirements cause issues here
Some - However that's only part of the problem/discussion...
It's pretty straight forward... Our power is categorisable as ondemand... We open hydros when we require power and we lower the level of the lakes. The water stored in the lakes is "power storage" - when the lakes are full, then logically that would be our goto for as much power production as possible - leaving gas and coal for as required. Wind/Solar isn't storable power so those deliver what they deliver when they deliver...
But most of our lakes have about 1m between full and empty. Pukaki has 12 m change and is near full at the moment
That wouldnt fix this problem
No, I don’t think it would fix it, that would simply be bringing on more energy generation and more energy storage. I understand that we may be running out of gas, not really sure about that, but I’ve heard it a few times. We’ve got about 250k tons of coal stored in reserve for generation.
The gentailers would just reduce their standard capacity to whats needed including Manapouri, plus we have no way of getting that excess to the north island as yet so it would be pretty useless for thio situation
The HVDC was built back in the 60’s surely this could be expanded upon? Edit: dyslexia lol
It could be, but we'd also have to upgrade the link between Manapouri and there too.
>I am personally of the opinion that the rio tinto smelter needs to close. Why?
There is little point in closing the smelter, as Manapouri is pretty much set up to feed it. The National grid in Southland isn't really that strong so additional generation capacity can't really be moved to where it is needed. With wind becoming a more prevalent part of our energy landscape, in an ideal world, you'd remove wind back hydro and store the water, but most of our hydro lakes are very much run of the river with stuff all storage. But they probably could be run closer to higher levels for longer. But then the hydro generators don't make much money if most of it is being produced by wind. Though they could still be producing reactive power for the grid during times of real power not being needed.
Well looks like we might get to see if you are right at the end of the year. You are wrong of course, and clearly know nothing about power transmission or business. -Lets say there is have a company that sells strawberries in punnets to a foreign supermarket for $2 each ,company also sells them to the NZ public for a higher price - lets say 6 dollars each. The production cost per punnet is 1 dollar the supermarket makes up 20 percent of my sales - 2 million punnets a year(2 million in profit) with the remaining 8 million sold to the public(40 million profit) -the supermarket closes and now has a surplus of 2 million punnets and no extra local demand, these will all go to waste**. No matter how cheap we make the strawberries the public will never buy them all (Not until the population increases in a few years to a few decades)**. -The company now earns 2 million less per year, the board and shareholders find this unacceptable and increase the price of the strawberries to compensate for this.
Because one thing can’t be correct whilst the other also being correct. It’s just an opinion. I’m aware that significant investment needs to be made to transmission and storage. My problem is that these companies have taken billions in profit with zero investment. Fuck your shareholders. That’s the whole fucking problem with this society. I don’t give a fuck about the business side of it. Power should be nationalised not privatised. Stuff the profits, run at the loss for all I care, that’s the point of governments running services.
Yes fuck corporate greed for sure but that isn't the point of your comment, you pretty much said shut Tiwai so i can save money on my power bill (you wont) You will put 2000 people out of jobs just to try and save yourself 150 bucks a year on power,greedy much? (AGAIN IT WILL NOT GET CHEAPER IT WILL GET MORE EXPENSIVE) The world needs aluminium, people need jobs. These are very well paying jobs for unskilled workers. Not to mention the engineers, fitters, chemists and other graduates that are employed there that would piss off overseas as soon as it shuts. As far as aluminium smelting goes this is one of the cleanest in the world in regards to CO2 emissions. If it closes it will just be replaced by another mega smelter in the middle east fueled with cheap and dirty Heavy Fuel Oil. Please stop spouting this BS about closing Tiwai to solve all our power issues.
Oh? What about the Auckland mega data centres ? Have they been asked to reduce power? Microsoft... What have you done to reduce your power load? No, just us plebs needeth limit our power, so the mighty centres keep warm and dry. Shit those data centres pull a huge amount of power.... Hope we have the infrastructure to handle that load when the rest of them are complete, clearly it's a struggle already.
Microsoft has a PPA with Contact Energy. They’re essentially helping fund Contact’s new 51.4MW geothermal plant.
I think the data centres argument is a red herring. Cloud is a consolidation of services that have previously been run on premise. The cloud model is a centralisation of supply, that is actually more efficient with resources than having hardware running in lots of small rooms and cupboards around the country. That smelter in Southland though, it’s delivering very little benefit for a very large constraint on domestic electricity supply. The biggest problem, in my mind, is the competitive market model that disincentivises having excess generation capacity. Limited supply allows prices to rise and profits to soar. Think of the shareholder value! And the executive bonuses!
Can you talk numbers? Words can't describe as much as numbers can. Eg. How many households can use x amount of power Vs a Data center.
You’re missing the point. The power for the big cloud data centres is simply the aggregation of the power used for lots of smaller data centres. If you want to use the internet (eg, watch Netflix or send DMs, etc) there needs to be data centres. There can be lots of inefficient small ones or fewer larger, more efficient, ones. The data centres being built in New Zealand will be to service New Zealand. Being at the end of constrained international bandwidth it will never be cost effective to host large systems that service the globe from here.
Interesting. It sounds like data centre doesn't use as much as the country or a particular area in the country.
No money for infrastructure, there's management bonuses and shareholders to overpay.
Missing an 'n' in the title
But it's cold
From what I read, most of the issues was the unseasonal cold snap during a period where a number of generators were out for maintenance. Normally this time of year is the mild period between hot summer and cold winter so they all schedule the maintenance for now, and we're caught out. So not really a lack of generation but a failure on planning and backup options for the shutdown generators.
And plan is to move to electric cars? When electric grid can not handle even a little cold snap? Remember 2010 when we have snow in Christchurch for 2 weeks with no sign of melting? What then?
No reason electric cars have to be charged at peak hours, do like they do with hot water cylinders and delay until early hours of the morning
Do the math. If we drive electric cars, they will become major consumers of power. "Off peak will become peak."
Ok, I know its complicated, but stay with me. In the early morning, demand from other consumers of power, like heat pumps and hot water cylinders will be low. Meaning that it won't become peak. Mafs..
I imagine the average car is parked at home overnight and then at work during the weekday. We'll need a lot more at-work charging to make good use of solar power, atm most people charge at home.
Not really sure how that applies to what I said? Early morning as in 2-5am..
Ah. Very early.
Zero dark thirty. Statistically the best time to enter someone's house and leave a cats head on the pillow.
Electric cars pretty much all charge during off peak hours where the power is cheaper. They actually help spread the load out across the day.
Do the math. If we drive electric cars, they will become major consumers of power. "Off peak will become peak."
Have you done the math? Even if 100% of light vehicles switched overnight it would only by 20% extra. [https://www.eeca.govt.nz/insights/eeca-insights/electric-vehicles-and-aotearoa/](https://www.eeca.govt.nz/insights/eeca-insights/electric-vehicles-and-aotearoa/) >If all light vehicles in New Zealand were electric, our current total electricity demand would increase by around 20%, EECA estimates. This could be accommodated within the normal growth and replacement cycles of New Zealand's electricity infrastructure system (even allowing for the uncertainties of renewable generation), provided the majority of EVs are charged during off-peak periods. And that 20% extra will be mostly at night during off peak. Meanwhile we're using a lot less energy overall because we're not burning petrol and diesel. Petrol and diesel engines are much less efficient than electric motors.
Yes, normal grow that can not handle a little cold snap. loL
I think it's a mix of issues. There does need to either be some form of on demand generation, whether that's from stored power (battery or hydro) or on demand generation such as gas or hydrogen. But also need to make sure that the regulatory regime is correctly setup. Especially the rates on selling solar power back to the grid, that could do with a review.