Summarised by Centrist
Journalist Bernard Hickey discussed the nation’s electricity crisis, which he argues has been a decade in the making. According to Hickey, for years, the country’s largest electricity generators and retailers—Contact, Meridian, Mercury, and Genesis—have prioritised dividends over the crucial investment needed in renewable energy sources.
The consequence? A dramatic increase in electricity prices, which is hitting New Zealanders hard, especially those already struggling to keep their homes warm.
Hickey reports that these four companies have focused on maximising profits, paying out $4 in dividends for every $1 invested in new generation or maintenance. The recent tripling of wholesale electricity prices, driven by a dry winter, gas shortages, and rising demand, has led to the closure of major industrial users like the Owakuni pulp mill, resulting in job losses.
Hickey notes that the root of the problem lies in the failure to build new renewable generation, despite many consented wind farms waiting to be developed. Instead of increasing capacity, these companies have chosen to maintain a constrained market, driving prices higher and reaping the benefits of the resulting windfall. In just six weeks, these gentailers have generated $512.4m in profits—profits made from a market designed to benefit them at the expense of everyone else.
