Electricity woes hit the South


My, how the world changes! Monday’s revelation that South Islanders can expect hefty power price rises for several years because we have to buy it from up North has knocked one of the chair legs out from under my generation.

In my formative years there were a few things you could count on: the government was National, the All Blacks were invincible and South Island power kept the lights burning in the North.

Since it was opened in 1965 the Cook Strait power cable has fuelled both pride and pique in Southerners. We’ve been proud to see ourselves as the nation’s engine room, churning out the megawatts to fuel the North’s homes and factories. At the same time the cable has been a focus for southern discontent. Feeling ignored by Wellington politicians? Ridiculed by smartarse Aucklanders? Let’s pull the plug and teach them a lesson!

So it takes a bit of getting used to the idea that the North Island now claims electricity among the many forms of power it exerts over the South, and that this situation is likely to remain for at least several years.

There are two components to our problem: a shortage of generating capacity and bottlenecks in transmission.

Electricity generation has always been a seesaw of supply and demand. In recent winters we have complained about the threat of power shortages, but in the past electricity was often in short supply. From the 1920s right through to the late ‘50s demand frequently outstripped supply as transmission networks grew faster than power stations.

Supply was eventually secured with the massive hydro projects that began in our part of the world with Roxburgh in the mid ‘50s and ended with the opening of the Clyde dam nearly 20 years ago. During those years – the ‘generation’ generation – our imaginations were captured by the scale and creativity of the projects. Benmore introduced us to the power of earth-moving machinery; Manapouri was a tribute to the tunneller’s art and the Mackenzie basin became threaded with gorgeous blue canals.

While the engineering was on display for all to see, the economics of power supply remained obscure. With the government taking on the responsibility for building the dams we paid in high taxes for the privilege of low power prices. It was only in the 90s, when the electricity industry was carved up into all those companies with ridiculous names, that reality began to bite. Power prices have been climbing steadily ever since and apparently we still have some way to go before the price we pay for electricity reflects the actual cost of producing it and getting it to our homes.

In the South Island the situation is complicated by other factors. In the past decade irrigation, industry and population growth have greatly increased our demand for electricity. At the same time power companies have shown themselves less willing than the government previously was to risk their capital in constructing expensive hydro projects. Cheaper and more flexible alternatives available in the North Island; such as geothermal, gas, wind and coal, are either missing in the South or have so far failed to gain traction with power companies and consumers.

Over the same period it seems our beloved Cook Strait cable simply grew old. Perhaps it was lack of foresight or maybe it was the error of trusting our infrastructure to market forces, but somehow we’ve reached a point where the cable can no longer reliably carry the load it once did.

The cost of refurbishing the cable has become contentious. Southern generating companies are being asked to pay the huge cost of upgrading the cable because it enables them to sell power into the lucrative North Island market. They argue that with power now heading south the North Island companies should share the cost.

It is easy to criticise the power companies for placing profit ahead of public interest, but we should remember that South Island power companies have in recent years put up several major projects to increase generating capacity. Each has been knocked back, largely for environmental reasons.

It will be interesting to see how scrupulous we remain as prices climb. Will we sacrifice our landscapes? Are we prepared to invest in power-saving technology? Whatever happens, it will hurt our pockets.