There is a joke that did the rounds following the North Island electricity cuts this month.
What did New Zealanders do for power before candles? They used a reliable electricity system.
The blame game started almost immediately after electricity retailers cut power on Transpower’s instructions to some of their customers on one of the coldest nights of the year.
When electricity was needed the most, it wasn’t there.
Energy Minister Megan Woods blamed Genesis Energy and commercial decisions because the company had not fully powered up its Huntly coal-fired station. Genesis, both a generator and a retailer, hit back, saying it had lost $1 million and there should have been sufficient power.
But aren’t businesses supposed to make commercial decisions?
Transpower, which operates the national grid, then received the blame for poor and inconsistent information and decision-making on the night in question.
Others have looked at the whole system and see it as failing.
The Ministry of Business, Innovation and Employment as well as the Electricity Authority have the task of getting to the bottom of what occurred. They need to look at the wider picture as well as the night’s specifics.
Sure, a storm clogged one major hydro intake, the wind dropped suddenly, planned maintenance stymied other generation sources and the night was very cold.
On the other hand, only 50% of the Cook Strait cable was being used and the South Island’s hydro lakes had healthy storage.
New Zealand’s electricity supply was exposed. Not only was power expensive, but it was uncertain as well.
Electricity wholesaling is complex; retailers buy power through the day on prices every five minutes. The set-up is supposed to promote the use of the cheapest power, usually hydro and other renewables.
But something has gone wrong. Not only were the cuts instituted, but New Zealand has also been burning Indonesian coal by the boatload all year at Huntly.
It would seem the generators have incentives to promote shortages and therefore higher prices for themselves. It can pay for them to spill water from dams even when they are not full.
Smaller retailers, meanwhile, repeatedly complain about market manipulation by the big generators that also retail power.
No-one pretends fixes are easy. The bad old days of the NZED promoted inefficiencies and bureaucracy, and going back to something along those lines is neither feasible nor sensible.
Paying generators for reserve capacity could prove wasteful, and the proposed Lake Onslow hydro battery is extremely expensive and, some say, other investments would be wiser.
The Government itself already has the huge Three Waters changes and the Resource Management Act replacements on its menu. It lacks the resources for a complete overhaul now.
What must be sought medium-term are not-too-disruptive changes. Retail competition, for example, has had positive aspects, despite the privileged position of the generator/retailers.
Electricity use flatlined for years but has increased with population and other demands.
There need to be incentives for already consented wind generation to be built. The lack of motivation to commission more generation is a serious failure.
Continued efforts need to be made to improve home insulation and home management of power use so that peak use is not so high.
Battery capacity could be developed in the longer term, to be released at those times of highest demand.
The crisis that left 20,000 households shivering must prompt change.
Properly functioning markets for wholesale electricity in a country as small as New Zealand are hard to achieve. But, surely, improvements can be attained so that electricity is generated renewably, at reasonable prices, and with reliable supply?