10. GERRY BROWNLEE (National—Ilam) Link to this
to the Minister of Energy
Does he stand by his statement in the House on Thursday 14 February 2008, in relation to Pole 1 of the high-voltage direct current (HVDC) link across Cook Strait, that “Until I received a phone call late last year, 24 hours before it was retired, we were told that it had many years of life left in it.”; if not, why not?
Hon PETE HODGSON (Minister for Economic Development) Link to this
Yes, the Minister does. In fact it may well be that its life is not at an end even yet. It is entirely possible that Pole 1 will be switched on again sooner rather than later.
How can the Minister stand by his statement when he and his colleagues have received regular briefings, reports, and memos from Transpower and the Electricity Commission over the last few years stating that the high-voltage direct current (HVDC) link was old, unreliable, and in need of either major repair or, preferably, replacement?
Actually, those reports go back longer than the last few years. Speaking on my own behalf, I can remember receiving them when in Opposition. The long and short of it is that this pole is now 30 years old and it will need to be decommissioned at some time. The Electricity Commission and Transpower are trying to work out when that will be, and in the meantime they are looking to see whether they can get the pole partially switched on again. Of course, there is another pole that shifts a lot more electricity than Pole 1 did in the first place.
Dave HereoraThe Minister was first questioned by the National Party on this matter last week—more than 4 months after Transpower publicly advised its intention. The House has had dozens and dozens of question times since that announcement, but National has decided to fire its guns only when the talk is about turning Pole 1 back on, not off.
Can the Minister confirm that Pole 1 is unlikely to be turned back on because no insurer in the world would be prepared to take the risk; that the southern lake levels are very, very low—in fact, at 1992 levels—that inflows are worse than in 1992; that in the North Island there is a huge deficit between available electricity and demand; and that with only one pole left, it would be impossible, even if the lakes were full, to meet the demand in the North Island at peak on cold days with big demand?
I think I counted seven questions. I will have a go at a few of them, if that is OK with Madam Speaker. The long and short of it is that lake levels are low for this time of the year—they are certainly below average. On top of that we have the well-rehearsed problems of a high water temperature in the Waikato River, outages in the Taranaki district, and so on. The fact of the matter is that despite all of that, the electricity system is coping rather well. The option exists for Pole 1 to be turned on again. The issue of insurance will be resolved either with an insurer or by self-insurance, or perhaps Pole 1 will not be turned on for engineering reasons. The long and the short of it is that the system is coping well and folk are ahead of the issue, instead of the situation in 1992 when by June we had ourselves a calamity because no one was paying attention.
Do the publicly stated comments from the power company chief executives that uninterrupted security of electricity supply to businesses and households cannot be guaranteed this winter stand as a testament to Labour’s complete failure to future-proof security of supply despite the grand pronouncements from that Minister that the Electricity Commission would do exactly that?
I am not aware of any year—there may have been some, but I am not aware of any—when any electricity generator has said in February that it can guarantee supply through the winter. It is generally not possible in our system. That is why we have a spot market, that is why we have businesses that take positions on the spot market, and that is why the lights have not gone out in this country since we came very close to that point back in 1992 under National.
What barriers to complete replacement of the HVDC Pole 1 of the Cook Strait cable stand in the way of Transpower getting on to the project with some urgency?
I regret I cannot give the member a good answer to that question because it is an operational question. But I can assure him that there is no shareholder problem to its making the investment when it is needed.
Could the Minister confirm that the reason Transpower has not gone ahead with the project is that it does not have sign-off from the Electricity Commission under the electricity governance rules, and that the Electricity Commission is itself nothing more than a mouthpiece for the Minister, so that, in effect, the shareholding Minister for Transpower is saying “Go ahead, we have no objection”, but, on the other hand, the Minister responsible for the Electricity Commission is saying “Hold it all up, we don’t want to do it.”?
The member kind of gets up and makes it up. The long and short of it is that if one wants to make a transmission investment in this country, one should involve the Electricity Commission in that. The commission asks a bunch of questions—and I have some of the questions in writing from the general manager of the Electricity Commission. The commission’s role is to test the validity of investment, and the two parties will, no doubt, continue to talk until they reach a resolution. I would imagine that would be sooner rather than later.
Can the Minister confirm that Transpower made its application to the Electricity Commission in September of 2005 and is still waiting to hear back?
No, I cannot confirm that. I can confirm the opposite, which is that the Electricity Commission and Transpower New Zealand continue to remain in discussions on this, that, and the other bit of the transmission capital investment programme of New Zealand’s transmission company. Transmission is being built up and down the country under this Government, and that will continue, but it will be done a bit at a time. When one bit is done, another bit will be done. That has always been the case, and it will continue to be the case.
I seek leave to table papers in my possession that show that the Government has known about this problem and the very, very serious nature of it since July of 2005 and has done nothing about it since.
Peter BrownDoes the Minister appreciate that as a result, in part, of these questions in Parliament and various media reports and speculation with regard to lake levels, some people—the retired vote mainly, living on fixed incomes—are getting very nervous and apprehensive about prices and security of supply when it comes to electricity; and if the Minister does appreciate that, can he give the House some advice on what he would like to say to those retired voters?
The member may recall that the Minister was asked last week whether he would give a guarantee about security of supply this coming winter or, indeed, any winter, and he answered, of course, that he could not offer that guarantee. One cannot do so when we have a system that is based on the range of fuels that we use. Indeed, very few countries can. As far as the price is concerned, I point out that although there have been upward price movements in recent years, without any doubt, the consumers that the member rises to speak on behalf of are, of course, not subject to the spot market. They simply carry through the winter with the same prices they have in the summer.