Source: BusinessNZ
Updates to a planned LNG import terminal to address dry-year risk in the electricity system should ensure businesses won’t be forced to reduce production in the face of high prices, the BusinessNZ Energy Council (BEC) says.
Director of Advocacy Catherine Beard says Liquified Natural Gas is a solution which can likely be implemented at pace to address immediate dry-year concerns.
“Risk premiums have been baked into wholesale prices following winter 2024, when low hydro inflows and reduced gas supply caused prices to spike. The initial proposal to pay for the terminal via a levy on the electricity industry has been revised, and we look forward to being consulted on an alternative funding model.”
Beard says a new winter energy liability obligation is a practical step, which will help ensure there is adequate supply in the system to cover any shortfall.
“However, businesses will need clarity on how this obligation will work in practice, as well as the wider impact these changes will have on investment decisions.
“BEC is reviewing the newly released discussion paper on this obligation, and looks forward to consulting further with our members and Government.”
The BusinessNZ Network including BusinessNZ, EMA, Business Central and Business South, represents and provides services to thousands of businesses, small and large, throughout New Zealand.