New Zealand's electricity supply has come under immense strain in recent months as hydro lake levels drop because of low rainfall, and due to lean gas reserves. Photo: RNZ / Diego Opatowski
Major energy users are urging businesses and households to go easy on electricity, to avoid a supply crisis.
The call comes as a large forest products company, Winstone Pulp International, plans to shut its entire operation as a result of high wholesale energy prices.
New Zealand's electricity supply has come under immense strain in recent months as hydro lake levels drop because of low rainfall, and due to lean gas reserves.
Major Energy Users Group executive director Karen Boyes told Checkpoint although she did not like to use the word "crisis" but things were getting tight.
"We are getting really concerned, we've already got three members who've shut down or reduced production and going into the next couple of months with low fuel is creating a lot of concern amongst our members."
Hopefully there would not need to be blackouts, but there could be reduced demand for consumers and businesses, she said.
A number of the group's members had rolling outage plans where a percentage of electricity was taken off to help manage tight supply and ideally they would be able to avoid a situation where households would start to feel the effects, she said.
"Hopefully with access to the additional water, with Contact and Genesis accessing gas from Methanex and as of today the smelter's just announced an additional level of demand response, so it's taken up to 36 percent of its capacity off line which means about 4 percent of New Zealand's national demand's going to be coming off."
Households and businesses could help by avoiding using appliances at the peak times if they were able, she said.
"I suggest if there's any load that you don't need to use through peak, so the morning and the evenings if you can delay things - those who've got the ability to charge say electric vehicles, or [use] the dishwasher later in the day to do that, keeping the temperatures of the heat pump at a reasonable sort of 21C to be healthy, keeping lights off in offices in places where you aren't - so ideally we want to avoid this because it's such an essential for homes and businesses to have electricity."
Many in the sector knew the energy situation would be tight in the winters of 2023-2025 would be tight, as well as being aware of the issues with gas supply earlier in the year, she said.
Transpower needed to elevate the level of risk to match the level which many in the sector had been seeing, she said.
Efficiency was going to be a focus for businesses because electricity costs were starting to hurt, she said.
"So businesses are definitely looking at what they can do to reduce their input costs to remain competitive because a lot of our members can't pass on these increases to the international market."
A lot of businesses would start to have energy issues over the next six months as they came off contracts with providers and start facing increased costs, she said.
