'Crisis' just pessimism, Hodgson insists

By CHRIS DANIELS

Energy Minister Pete Hodgson has defended his "active management"of the energy sector and again tried to allay fears of an energy shortage.

Speaking at an energy conference in Wellington yesterday, Hodgson insisted that research showing impending shortfalls was too pessimistic.

Such predictions were the reason that the state "tended to overbuild" power generation from the 1950s to early 1980s.

Hodgson said his approach to the energy portfolio, which was not just leaving the market to take care of all aspects, was why he asked the power companies for details of their confidential plans.

The sector had changed to a market model, one that assumed the market would provide generation when and where it was needed, always on time.

"I am not prepared to take that risk. I actively manage the industry, even though it's not part of the model that I inherited. Part of that active management is to ask generators if they would be kind enough to let me know what they have in their back pocket. They have, and my officials have listed all that up. The stuff we can make public we have, the stuff we can't, we haven't."

Engineer Bryan Leyland, who has issued the latest research from the Centre for Advanced Engineering, said it was not true that all the group's reports "invariably predict an imminent power crisis".

All pointed out the risk of shortages when the Maui gas field eventually ran down, he said.

The centre's 1998 report said there would be enough generation to get through a dry year until about 2003.

The 1996 report also suggested a critical period from 2003 onwards, said Leyland, which was "hardly a prediction of an imminent power crisis".

Mr Hodgson told the conference that the depleting Maui field was "not cause for high anxiety."

"The end of Maui is not a crisis but a transition to a more typical gas supply situation by international standards."

Many smaller gas fields, including some that had already been discovered, would become economic under a system of more, smaller fields supplying gas.

Further reading
Feature: Electricity

Energy Efficiency and Conservation Authority