Volatile supply and rising prices are affecting businesses and communities. (Image: Getty)
Have you noticed the strain our energy system has been under lately? Beyond keeping the lights on, volatile supply and rising energy prices are affecting businesses and communities across New Zealand.
For some industries, this means reduced activity or even shutting up shop.
It’s happening in places we don’t often hear about but which have a knock-on effect for most New Zealanders. The closure of the Winstone Pulp International mill in Ruapehu resulted in hundreds of jobs lost, significantly affecting local employment and industry sustainability.
Methanol producer and supplier Methanex had to temporarily idle its manufacturing operations in NZ to divert its contracted natural gas to the NZ electricity market, stabilising the country’s strained energy supply.
Methanol is key to many household items like paints, glues, coatings and more.
Now, one of NZ’s biggest hydrogen peroxide manufacturers, Evonik, could be forced to close unless we get gas and electricity prices under control.
Our economy will continue to shrink through closures and shuttering plants until we tackle the urgent need for accessible and dependable energy solutions.
The fix for what ails our energy sector won’t come solely from constructing more infrastructure at pace. It’s critical to rethink how we manage and develop a smarter energy system. While quick fixes may provide temporary relief, we’d only be kicking the can down the road and compounding the underlying issues.
Instead, we must commit to a long-term vision – one that is capable of surviving a change in government and any subsequent policy bonfire on the Beehive lawn.
The policy flip-flop problem
A prime example of how unstable policy gets in the way of change is NZ’s ban on new offshore oil and gas exploration.
The coalition Government has repealed the ban, while Labour has promised to reinstate it if elected.
Each shift and promise sends ripples through the energy sector and a wave of uncertainty across the market. These warring policies have the potential to disrupt supply chains, raise prices and ultimately deter investment in cleaner energy solutions.
We don’t want or need any more uncertainty. Policy changes should be more measured, like adjusting a dial and less like an on-off switch.
It’s not an easy ask, but NZ’s energy future depends on much closer collaboration.
We must demand better coordination and multi-party support for sensible policies that can stand the test of time – policies that foster innovation, investment and environmental sustainability without the whiplash of constant regulatory changes.
Some settings are too important to play political football with. Energy policy is one of those things that we simply need to get right for the good of NZ and for NZers.
NZ has de-politicised certain issues before in the name of the greater good – take, for example, areas like foreign policy and paid parental leave.
Energy needs to be treated in the same regard.
With that said, multi-party agreement on sensible policy is only part of the equation when stabilising settings.
Time for long-term thinking
A longer government term, coupled with cross-party cooperation, can provide the stability needed to foster confidence and investment in the energy sector.
Consistent policy and the time to implement it can encourage business confidence and spur room for innovation and long-term contractual stability for new entrants to the market.
Achieving good energy outcomes requires collaboration across the sector and political lines.
A bipartisan strategy is the only way to provide the stability and confidence needed for long-term investments. Government reforms, such as streamlining resource management processes, can reduce project costs and ensure the timely delivery of new energy supplies.
As voters, we have a role to play in setting the stage for this kind of long-term thinking.
We are likely to see a referendum on a four-year term soon – an important step in the right direction. We have a chance to vote to extend political terms from three years to four.
This change can help ensure that governments have enough time to implement thoughtful, effective energy policies without the constant pressure of short election cycles.
Your energy future depends on your ability to think long-term, avoid harmful bans and maintain policy consistency.
We can build a resilient and sustainable energy system by empowering people and businesses to adopt cleaner technologies and fostering a stable regulatory environment.
Let’s work together to ensure that our energy policies support economic growth, environmental sustainability and the wellbeing of all NZers.
Tina Schirr is the executive director of the BusinessNZ Energy Council.