August 2022
Industry update: what we're seeing
It's important that we learn from the world's lessons.
Vladimir Putin’s use of gas as a geopolitical weapon continues to highlight the importance of energy security, and why countries should strive to have a robust and flexible energy mix.
Germany has become one of the countries most reliant upon Russian natural gas, after adopting policies to decommission their nuclear power assets and effectively tie their energy security to the whims of their eastern neighbour.
Now, street lights are dimmed and showers run cold. Nord Stream 1, the primary gas pipeline from Russia to Germany, has been cut to just 20% of capacity. Germans might not mind the cold showers as they bask in summer heat, but winter is coming.
External factors are often used as scapegoats for poor domestic policy. In the UK, years of price controls on low-income electricity and gas users, coupled with a recent "windfall" tax on oil and natural gas producers, have led to unintended consequences.
It is expected that Britons' energy bills will increase by 60% and that a third of households will fall into energy poverty by October. Worse yet, some commentators have raised the spectre of widespread refusal to pay energy bills, and the potential for civil unrest.
Closer to home, our trans-Tasman neighbour has problems of its own. Just months after energy regulator AEMO suspended the electricity market, Australians are grappling with energy bills three times higher than they were a year ago.
The previous Liberal-led Government took different views on the future of coal generation plants depending on the leader at the helm. This political uncertainty led to firms putting off maintenance, upgrades or new plants, and ultimately meant that old coal generators were unreliable when needed. New Labor Prime Minister Anthony Albanese has been doing his best to shore-up investor confidence by ruling out a moratorium on fossil fuel projects and stating that a ban would have a "devastating impact" on the Australian economy.
Across the world, constant meddling in energy markets is coming back to bite consumers. We are not immune to this risk. But while the window is closing, we currently have the advantage of being able to observe how wrong-handed energy policies can create unfavourable investment conditions for producers, distributors, sellers and users, create scarcity, and - in the absence of economic alternatives at scale - increased prices for consumers.
Let's not squander our natural advantage.
Panel Event: Is our energy security in peril?
The increased cost of living and geopolitical turmoil has seen energy commodity prices spike across the world. Energy affordability and security are now key considerations for policy-makers.
What lessons can New Zealand learn from the experiences of other countries? And how do we build a more resilient energy sector to weather geopolitical shocks?
Join us for a robust panel discussion, kindly hosted by Russell McVeagh in Wellington.
Our panellists include:
- Babu Bahirathan (Chief Executive Officer - Downstream Energy and Nova Energy)
- Aaron Webb (Director - PwC)
- Andrew Jefferies (Chief Executive - New Zealand Oil & Gas)
- Dr Oliver Hartwich (Executive Director - The New Zealand Initiative)
John Kidd (Enerlytica) will facilitate the discussion, followed by Q&A from the floor and a final wrap-up.
Tickets are essential. Register now to ensure you do not miss out.
Crown's legal arguments
We have been following the ongoing court case brought by Students for Climate Solutions against the Crown.
Students for Climate Solutions argue that the Minister for Energy and Resources, Hon Dr Megan Woods, had an obligation under the Climate Change Response Act to consider the effects of new permits on climate change.
It has been refreshing to note how the Crown's legal representative has used many lines of argument that regular readers of Energise Online will be familiar with. These include:
- new permits are not inconsistent with achieving our emissions goals
- reiterating that New Zealand has a net zero, rather than zero, carbon emissions target
- New Zealand is on track to meet emissions budget targets with current policies
We are glad to see the Crown's legal representative bringing some perspective to the court, but only wish that Government ministers would adopt these arguments themselves.
Both Energy News and Stuff covered this story in detail.
Climate change adaption plan
The Government has released the first National Adaption Plan which outlines more than 120 actions to protect "lives, livelihoods, homes, businesses and infrastructure" from the effects of climate change over the next six years.
One of the most important of the listed actions is that the Government has committed to passing legislation to support a "managed retreat" of some coastal communities that are or will be adversely affected by climate change. This could include villages and towns that are susceptible to flood, erosion, or rising sea levels.
A notable omission from the report is who will pay for the costs of climate change mitigation and the managed retreat of some communities. The Government has signalled that this will be addressed in the upcoming Climate Adaptation Bill.
1News has a good summary of the National Adaption Plan here. To read through the Plan itself, visit the Ministry for the Environment website.
Energy Skills Industry Talent Corner
Brooke Gamlin, Process Operator at Todd Energy
Brooke entered the energy sector following a career as Deck Crew working on Super Yachts overseas.
Brooke says, “I really enjoyed the practical, hands-on nature that this work entailed, and enjoyed the engine room exposure, as well as being part of a close-knit team environment. I knew going forward that I wanted to continue working in a team, in a practical role. I was fortunate to be able to spend a couple of days at a local energy production site, viewing process operation staff to find out what a Process Operator role was all about. From there, I knew it was a career that would be challenging, rewarding, and worth pursuing, so I enrolled in the Process Operations Course run by WITT and the energy industry. To help fund my training I applied to energy skills for an industry scholarship which I was granted. This also allowed me to undertake my first industry work placement at my scholarship company’s site."
Fast forward nearly seven years, and Brooke has just returned to work with Todd Energy after having maternity leave with her second daughter.
“I feel extremely grateful to have had the full support and encouragement of my company, who has been more than willing to work with me to ensure both of my returns to work have suited my family logistical requirements, while at the same time creating new opportunities for me.
"I love my job and the constant learning opportunities and development that come with it. I have had the chance to work in a
number of different team environments, with a variety of different people, from contractors to fellow employees. The people are fantastic- I feel part of a great network of colleagues who provide opportunities to work hard and have fun along the way.”
Member profile: BRG
BRG is a Wellington-based Government Relations and Communications firm that has been operating for more than 25 years.
They help a range of clients – from New Zealand businesses, multinationals, regulated industries and government agencies – navigate the messy intersection of politics and policy.
BRG has a proud history working alongside major players in New Zealand’s energy sector and is now spending a lot of time helping their clients on the decarbonisation journey the country is on.
Their expertise in the energy sector makes them well placed to assist your business, particularly given the pace of change now facing the industry.
They offer a suite of services, including policy advice, submission-writing, strategic planning and handling all aspects of a client’s government and broader stakeholder engagement and communications needs.
BRG strives to enhance clients’ reputations by building important relationships with policymakers and influencers, and with people and organisations that matter to them.
They have trusted contacts and well-established networks to help identify and solve challenges and, because of how they work, BRG enjoys long-standing relationships with many of our clientele.
BRG's values as a company are to be solutions-focused and proactive, pragmatic and constructive. Their team comprises decades of experience in the media and communications sector, the private sector, Ministerial offices and Government agencies.
For more information about how BRG may be able to assist your business, please contact Georgina Stylianou via georgina.stylianou@brg.co.nz.
