Source: Radio New Zealand
The companies in the Major Electricity Users Group account for more than a quarter of New Zealand’s energy use. File photo. 123RF
Energy prices around the world are being squeezed by the conflict in the Middle East, but there should not be any price shocks in local power bills this winter, says the group representing the country’s biggest energy consumers.
The Major Electricity Users Group says power prices need to hold steady this winter, with businesses already shouldering cost increases driven by war in the Middle East.
The group includes Fonterra, meat exporter ANZCO, Woolworths and Datagrid – the company building a $3.5 billion artificial intelligence factory near Invercargill – and the members account for more than a quarter of New Zealand’s energy use.
The electricity bill can be the third highest cost for many businesses, after wages and raw materials, and over the past two years various manufactors – including several mills – have closed due to energy costs.
But Major Electricity Users Group chair John Harbord told Checkpoint that while it was a “very challenging environment” for its members, there should not be any power price shocks this winter.
He said the country’s hydro lakes have more water than they usually do due to a wet spring, and there was the strategic stockpile of coal at Huntly.
“At this stage, unless we get a prolonged dry period in the lead up to winter, we shouldn’t get price shocks due to scarcity of energy to make electricity with.
“Now obviously we don’t have control over the price, that’s set by the generators but there is no reason at this stage to expect a significant price shock passed from generators on to consumers.”
He said companies are currently absorbing increases in things such as shipping and insurance, and not adding a premium.
Harbord said electricity was an “absolutely critical” cost for businesses in the current environment.
“If it goes up at all and companies have to absorb it that’s going to put some strain on a lot of businesses, and not just our members, larger commercial or industrial users, but even your corner dairy, your retail shops as well, they’re ll looking at increases in electricity bills this winter.”
He said the system was already factoring in the increased demand from the AI factory, saying that it would take some time to get up and running, and the infrastructure was being prepared to handle it.
“People are building generation to get ahead of that.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
