NZ’s Energy Gap puts growth and investment at risk - Wed 21 Oct

New Zealand faces a significant energy gap as rising power prices and challenges in connecting new projects threaten the country's energy security. Simon Vanini, a corporate and commercial partner at Simpson Gresson, highlights that while there is substantial investment in renewable energy, the lack of reliable firming solutions, such as gas and coal, poses risks, particularly during dry winter nights. The Electricity Authority is currently consulting on how to address this gap, with batteries being part of the solution but not sufficient on their own.

The upcoming election adds urgency to the situation, especially regarding the LNG terminal project, which could provide much-needed energy security. Transpower's recent report indicates that without the LNG coming online by 2028, New Zealand could face significant supply issues by 2031. Investors from North America and Europe express concerns about energy prices affecting their willingness to invest, with many seeking clarity on whether they can pass increased costs onto consumers.

Vanini emphasizes the need for the new government to provide clear guidance on energy policies and suggests that quick wins, such as support for residential solar energy, could alleviate some pressure on the electricity grid. The outcome of the election and subsequent decisions will be crucial in shaping New Zealand's energy landscape and investment climate.

Simon Vannini, Corporate & Commercial partner at Simpson Grierson, on how NZ’s energy gap threatens investment, growth and power security. See omnystudio.com/listener for privacy information.