August update
Industry update: what we're seeing
The election season is well and truly upon us, as politicians are let loose upon the rest of the country to cut ribbons, cuddle babies, and shake hands to try and secure as many votes as they can.
In Wellington, it also means there is a scramble among industry organisations to vie for visibility. Each sector would love to be the centre of attention in the lead up to the election. Attention gets you influence, and influence gets you promises of better policy.
Or so we hope.
The past month has been a very busy one for us at Energy Resources Aotearoa. As we detail below, we have seen the release of the Government’s long-awaited energy policy package, have received several prominent pieces of media coverage, and hosted our latest Energy Resources Taranaki Forum.
It has also been a time characterised by increased collaboration across the energy and resources sector, with organisations getting together to host an all new energy and resources election panel, and then issuing a combined open letter about sectoral priorities.
There is strength in that collaboration.
It can be easy for industry associations within a particular area of the economy to focus on the issues that divides them, rather than what unites them. But, when you take a step back, it is clear that that in the energy and resources space we are all connected, and that there is more that unites us than sets us apart.
By working closely together on areas of overlap we have been able to present a sector that is united behind a common set of goals.
This makes it easier for politicians and officials to understand what it is exactly that the energy and resource sector needs to truly flourish.
When we speak with a united voice, it is much easier for all to listen.
Energy Resources Taranaki Forum
On Wednesday this week we were proud to host the latest online version of the Energy Resources Forum in conjunction with Freeman.
These regular forums are a great way for the energy sector to share information, case studies, and insights with one another.
Wednesday's forum had a particular focus on security of supply. We were pleased to feature updates on:
- European lessons on increasing renewables
Mario Liebensteiner - Assistant Professor of Energy Markets and Energy System Analysis, University of Erlangen-Nuremberg, Germany.
- Electricity security of supply
David Katz - Market and Security of Supply Manager, Transpower
- Gas producers update
Representatives from Beach Energy, OMV New Zealand, Todd Energy, and Matahio
- Energy transition consultation update
Callum Thorpe - Principal Policy Advisor, Resources, Gas and Fuel Supply Policy, MBIE
- Expert review of activity, commodity prices, outlook and supply
John Kidd - Director, Head of Research, Enerlytica
A big thank you to all sponsors, attendees, and presenters for making this event possible.
Energy and Resources Election Panel
In late July we were proud to come together with other energy and resources organisations to hold the All of Energy and Resources Election Panel.
More than 180 attendees joined us at the new Tākina Convention Centre in Wellington to hear from politicians vying for the audience's votes ahead of the 14 October General Election.
The panel discussion was facilitated by Mike Munro and featured Jessica Hammond (The Opportunities Party), Stuart Smith (National Party), Hon Dr Megan Woods (Labour Party), Simon Court (ACT Party), Hon Julie Anne Genter (Green Party), and Hon Shane Jones (New Zealand First Party).
Panel members discussed a wide range of issues of interest to the broader energy and resources sector. But front of mind for everyone seemed to be a focus on ensuring New Zealand has security of energy supply to meet our needs now and into the future.
Both National and ACT stated they would reverse the offshore oil and gas exploration ban, while Shane Jones regretted the ban having been enacted in the first place.
Media coverage
NZ must address future energy shortfalls: politicians, National Business Review
Politicians discuss energy security, investment, Energy News
Politicians talk energy policies as the election news, Interest.co.nz
Open letter to politicians
Following on from our successful All of Energy and Resources Election Panel, we decided to bring the organisations together and issue an open letter spelling out the priorities of the sector ahead of the General Election.
The result was a ten-point letter that outlines the main issues for the sector now and into the future.
A big thank you to our fellow organisations for your collaboration that made this project a success: BusinessNZ Energy Council, Electricity Networks Aotearoa, Electricity Retailers’ Association of New Zealand, GasNZ, Major Electricity Users’ Group, Straterra, and the Young Energy Professionals Network.
A copy of the open letter can be found
here.
Media coverage
Major energy sector groups join forces to lobby politicians before election, The Post
Energy sector groups seek consistent and enduring policies, Interest.co.nz
Open letter calls for bipartisan energy policies, Energy News
Energy policy package
On Wednesday 9 August, the Government released their long-awaited energy policy package for public consultation. These policies appeared to have been delayed for several weeks, with many commentators and industry figures expecting them to have been released in early July.
The suite of policies released include the Gas Transition Plan, the Interim Hydrogen Roadmap, and regulations to enable offshore renewable energy.
The package is the start of an important conversation about how we restore long-term confidence in New Zealand’s energy sector. In the coming years we will need unprecedented levels of investment to achieve our ambitions - and policy settings need to change to support that.
We agree with officials that importing LNG would not be viable, or provide us with domestic energy security. The fact that this is an option on the table is extremely concerning as it points to a looming energy shortfall.
While the
policy package raises several concerns, it is pleasing to see the Government acknowledge the opportunities to reduce emissions - including carbon capture, natural gas storage and renewable gases.
The full package of consultations is available on MBIE's website here.
Read our media release.
Media coverage
Gas critical to energy security – GTP, Energy News
Wellington bulletin, Newstalk ZB
BlackRock fund announced
Earlier this month, Prime Minister Rt Hon Chris Hipkins and Energy and Resources Minister Hon Dr Megan Woods held a press conference to announce a new climate fund.
But the $2 billion fund to back 100% renewable electricity was not a taxpayer-funded initiative. Instead, the Government announced that it was "working with" the world's largest asset management company, BlackRock, to help New Zealand achieve 100% renewable electricity.
The announcement is available here.
The Government's press release was laden with ambition and vision, but very light on detail.
Over on BusinessDesk, Oliver Lewis had a great explainer, What the BlackRock fund isn't.
If the Government is not investing in the fund itself or helping BlackRock with navigate compliance issues like Overseas Investment Office approvals, then it is hard to see the announcement as anything other than free press for the world's largest asset management company.
ETS changes, price rises
Last month the Government decided to backtrack on its decision to keep a tight rein on carbon prices to provide relief in our high cost of living environment.
Reversing that decision will mean that electricity and petrol prices will increase as the carbon price is expected to go up further.
AM host Ryan Bridge interviewed Climate Change Minister James Shaw and then our Chief Executive John Carnegie to learn more about what the Government had done and how these changes would affect household budgets.
John raised our concerns about the decision, and highlighted how it would have real consequences for the cost of living, the competitiveness of our exporters, and the confidence to invest in decarbonisation.
Lessons from Tasmania
We spoke to BusinessDesk journalist Dileepa Fonseka about the pitfalls of megaprojects, with explicit reference to Tasmania’s experience with renewables.
Tasmania has gone all-in on the Marinus Link project, which is a proposed energy and telecommunications connection between the island and Victoria. The Tasmanian Government saw it as a way to make money by sending renewable electricity to the mainland, but the project has been beset by large cost blowouts.
It serves as a cautionary tale for politicians with grand ideas: don’t end up with tunnel vision.
Energy Skills Industry Talent Corner
Introducing Robert Pickering, a Chemical and Biological Engineering student who completed a Health and Safety internship with OMV.
From a very young age, I have wanted to travel and have been very interested in the energy sector.
Living most of my life in Auckland I wanted to take a new pathway and took the journey down to
the University of Waikato to study Chemical and Biological engineering.
During my studies, I became more passionate about the opportunities in the energy sector, and for my first internship, I wanted to work in the energy sector. This led to me contacting Sheree Long (who managed all the interns) at Energy Skills Aotearoa who assisted me to acquire a Health and Safety Internship at OMV.
Working at OMV NZ was a blast! With the internship role being in Health and Safety, the team welcomed me with open arms and taught me that the energy sector is just as important in keeping people safe as it is in providing quality products for customers. The OMV Health and Safety Internship exposed me to ALARP Risk Assessments, New Zealand Legislation, and implementing Health and Safety on site. These valuable skills I gained are irreplaceable and I will take into future roles in my career.
I am soon to finish my third year of Chemical and Biological Engineering, and I will begin my second internship over the summer at Rio Tinto Aluminium Smelter down in Invercargill which will provide a great opportunity for the future in the energy and process sector. Were it not for OMV providing me the opportunity and Energy Skills Aotearoa assisting me to acquire the internship, my desire to work in the energy sector may not have been achieved.
Where to next after my studies? I hope to keep broadening my understanding of the energy sector and assisting in the challenges of decarbonizing company assets throughout New Zealand and internationally.
