New Zealand: Power shortages cost economy $3b

Business is licking its wounds as the country emerges from the winter of tight power supplies.

Lost production and the cost to some generators exposed to high wholesale prices to meet customer obligations will, according to previous dry year precedents, total hundreds of millions of dollars.


At the extreme end of calculations the Manufacturers and Exporters Association says the impact of power savings is around a $3 billion loss to the economy.

The $2 million power industry-run advertising campaign to encourage reduced power use ended yesterday after savings of around 3.6 per cent by domestic users had been achieved during the past six weeks. Some major users, including Rio Tinto’s aluminium smelter at Bluff and PanPac pulp shut down a chunk of production due to sky-high spot prices.

For much of the year the Electricity Commission has been forced to crank up its diesel-fired Whirinaki back-up power station, burning through $31 million by the end of June.

New Zealand Herald