Consumers need to know what power challenges lie ahead

Kiwis had good reason to be spooked by headlines that screamed, 'grid emergency' and 'nationwide power worries'. It’s not what you want to read at any time, let alone in the depths of winter. All this had been triggered by our electricity system operator, Transpower, issuing a so-called red notice that featured the words, 'Grid Emergency Notice'. Of course, the notice was intended for the eyes of the industry only, but the media picked it up.

What followed were two paragraphs that to most New Zealanders would be in equal measure easy-to-understand and incomprehensible. The easy-to-understand part were the leading words, 'This is a New Zealand-wide emergency'. Transpower went on to state that there was 'insufficient generation and reserve offers to meet demand…' for something they explained was an '…N-1 security for a contingent event.'

Sounds scary.

So, what were Kiwis meant to make of all that? Did they need to switch off the heaters? If they were medically dependent on electricity, was there a risk they would have no power? How long would it last? None of this was apparent or explained in simple language and it should have been.

Too often consumers have been left in the dark over electricity. It is a complicated system and difficult to understand. The 2019 Electricity Price Review, said that consumers, '… struggle to make their voices heard and exert influence over decisions affecting them in the electricity sector.' One reason the review found was that '…the complexity of the sector makes it difficult for them to understand and express their views about things affecting their electricity supply and power bills.'

It was precisely for that reason that the Consumer Advocacy Council, which I chair, was established – so consumers could have a strong voice when complex issues emerge that impact them.

Our first piece of work is helping to simplify power bills and we’re working with Consumer NZ to come up with an easy-to-understand format that we hope retailers adopt.

Last week is a case in point. It should have been within the power of Transpower to tell consumers more about what to expect and what they could do, if anything to assist, in plain, simple language aimed at consumers and not just the electricity sector. We will be taking this up with Transpower.

Luckily, by later the same morning Transpower had it all under control though alarming media coverage around the risk of further power cuts lingered through the day.

So, what do electricity consumers make of all of this, particularly when there was a power outage less than a year ago on 9 August 2021?

Most New Zealanders would agree that electricity is an essential service. We are all, with very few exceptions, reliant on it. Which means that we pretty much all want the power to stay on. And yet, we know outages are not uncommon – both planned and unplanned.

There are some challenges ahead. New Zealand is committed to transitioning to a low carbon economy by 2030. We have some 82% renewable energy now. By 2030, we need 100% renewable energy in an average year.

This means, we will probably become more reliant on wind and solar power. These are what the electricity sector describes as intermittent power generation. They are intermittent because they only generate electricity when the wind blows and the sun shines. They can’t always be relied on.

Added to that we are consuming more electricity as our population grows and new demands emerge such as EVs. Transpower, in its 'Te Mauri Hiko energy futures report (2018)' suggested that by 2050 we may need to more than double the electricity we currently produce.

All of this means that how the electricity market manages demand and supply as the mix of generation changes will be a challenge. Consumers have a role to play in making the network more resilient as technology changes which will allow them to better manage their own power consumption.

The Consumer Advocacy Council’s plea to the big players like Transpower is simple – in your communications include plain English aimed at consumers and help them better understand the journey ahead so they can play their part in the transition to a sustainable, low carbon electricity market.