Energy Sector – Reduced natural gas supply led to higher prices and emissions

Reduced use of natural gas in 2019 led to higher electricity prices, according to the annual Energy in New Zealand report released today by the Ministry of Business, Innovation and Employment.

“The 43% increase in coal use for electricity generation last year also means higher emissions,” says Petroleum Exploration and Production Association of New Zealand (PEPANZ) Chief Executive John Carnegie.

“The dry year for hydro lakes combined with outages at the Pohokura gas field led to this outcome and is a clear warning for the future. It shows that if our natural gas reserves continue to decline then energy prices and emissions are likely to keep rising, as we highlighted in our recent publication “Asking the burning questions.”

“This highlights the need for good regulatory settings to allow a vibrant gas market, ensuring we have affordable and reliable energy as we transition to a lower emissions future.

“Producing our own energy domestically to power our economy – and earning the royalties – has never been more important given the economic damage caused by Covid-19.”