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If you plan to use electricity in NZ

If you plan to use electricity in NZ

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Old May 1st 2003, 10:10 pm
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Default If you plan to use electricity in NZ

Biggest news in NZ at the moment is the impending electricity supply shortage, predicted to hit us with full force this coming winter. Principal reasons are insufficient summer rainfall (much of NZ's elec is hydro) and the discovery that NZ's very important Maui gas field reserves were significantly smaller than originally expected.

The upshot of this is that we are being asked to save 10% power and the govt depts are trying to save 15%. So far, the resulting general public savings are around 3%, so not going so well. The threat is that there will be power cuts for hot water heating (typically on a separate circuit here and so separately and remotely controllable by the power companies - they just switch it off when they like!) for 18 of every 24 hours for 6-7 months, incl the winter. If that does not do the trick, there will be "rolling blackouts" (i.e., back to the 70s and shopping in Woolies with a candle lighting your way). This is all over the news here and any google search will find loads of references for anyone interested.

The immediate impact has been that elec "spot prices" (fluctuations in power prices here can be very large now that the market has been greatly freed from govt control) have recently been all over the place - last week going from something like 10-15 NZ cents per kWh (i.e., per unit, for those not into elec bills) to over a dollar (NZ, natch) per kWh. The elec bills, in real terms (i.e., taking into account sig lower wages here), are very high already and these 10-fold fluctuations, even though short-term in many cases, can make them scarily high.

Once you realise that your MONTHLY elec bill in NZ may well be higher than your old QUARTERLY bill in the UK, even if you just do the usual conversion of dividing NZ$ by 2.9 or so to convert to GBP - and such a conversion is meaningless delusion, cos NZ wages are more like double what you earn in UK, not 3 times - then you DO indeed start to save power - by sitting in the cold. Of course, it is not too bad at the mo, and NZ winters, in the main centres, are a few degrees warmer than many parts of UK, but it will be cold enough, once you have sat there all night. A number of businesses here - those that are high power users - have been forced to shut down for days at a time, losing business and making future job losses, etc, more likely. In time, the very high prices will, presumably, have an impact on all business, cos they are certainly having an impact on ordinary householders.

Of course, there is more to life than elec bills, but this is posted here as info for those who may be interested in NZ. Homes with gas heating are more rare here and, in any case, as I said above, Maui gas field reserves being smaller than hoped has also pushed the price of gas up, and so you get hit there too. Of course, in many things, there is no substitute for elec anyway.

Many broadcasters here - from all sides of political scene and at many levels of life - openly say things like "And they call this a first world country?" and "third world land", etc. This is rather harsh, but elec is so fundamental that this is what prompts it.

They also have probs with clean water here in many regions - the Kapiti coast springs to mind where the residents have to boil their water (all water for drinking, cooking, teeth, etc) for a 3 minute period (i.e., not just boil the joug, but boil up in a pan) before use, pretty much all year round. I have lost count of the number of water boil warnings since I have been here (less than a year) - they put them out over the radio - and feel very sorry for those affected cos it is OK to dismiss such things but it would be a real pain in the butt when you think about it.

NZ is nice in many ways, but you need a sense of humour and you need to REALLY mean what many on the forum say - that you WANT a simpler life.

STOP PRESS!!! Just heard on the radio that Contact Energy, one of the main suppliers here, has already started cutting hot water supplies for 5 hours a day. They just started today. It is a real shame that NZ radio is not on the net cos it would be a great way to get in touch with the country before you arrive. I wish I had been able to hear much of what I have heard since arriving since the picture it paints is very much the reality here - good and not so good.

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Old May 1st 2003, 11:58 pm
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Latest update:

Canterbury area of NZ (incl Christchurch, of course) is to begin having 8 hour/day hot water supply power cuts from May 19th - just announced here.

The other way people are economising here is gonna be by sharing bath water. After all, a family that baths together sticks together. Blimey, NZ really does take you back a bit - sometimes it feels like a privileged chance to see what my parents' life was like then they were my age.

They have a programme on TV over here at the mo called NZ Colonial House, about life in 1870s NZ. It got very low viewing figures cos a lot of people thought it was just a lifestyle prog.

Cheers
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Old May 2nd 2003, 2:27 am
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Default Re: If you plan to use electricity in NZ

If I can just correct a few things here, before everyone starts panicking!!

The immediate impact has been that elec "spot prices" (fluctuations in power prices here can be very large now that the market has been greatly freed from govt control) have recently been all over the place - last week going from something like 10-15 NZ cents per kWh (i.e., per unit, for those not into elec bills) to over a dollar (NZ, natch) per kWh. The elec bills, in real terms (i.e., taking into account sig lower wages here), are very high already and these 10-fold fluctuations, even though short-term in many cases, can make them scarily high.
Firstly 'spot price' electricity is ONLY used by large industrial users like Comalco (owns a large aluminium smelter in Bluff) and the Kinleith pulp mill. Because they use huge amounts of electricity, instead of being tied-down to a specific price per megawatt, they take their chances with the spot price, in which power is sold in 30 minute 'blocks'. The cost of each 'block' can vary, and depends on availability/cost of generation, time of day, transmission constraints (ie national grid faults etc). Most of the time, this arrangement works well, as there is sufficient generation/transmission capacity to meet demand, and hence prices are low. Residential users do NOT use spot price electricity - the household retailers like Mercury Enegy, Trustpower etc etc all buy their electricity at a fixed price, negotiated months in advance.

The recent huge surges in spot price power (which, in reality are usually only for a few hours/day or so at most) were caused by a combination of breakdowns at the Maui gas field (a fire detection system went off, which automatically shut down production), coupled with pre-winter scheduled maintenance at thermal stations like Huntly/Otahuhu/Taranaki meant that more electricity had to be generated using Hydro stations, which off course used up water stored in lakes. This, together with very low rainfall in the lake areas, explains why we are in the mess we are in now.

Once you realise that your MONTHLY elec bill in NZ may well be higher than your old QUARTERLY bill in the UK, even if you just do the usual conversion of dividing NZ$ by 2.9 or so to convert to GBP - and such a conversion is meaningless delusion, cos NZ wages are more like double what you earn in UK, not 3 times - then you DO indeed start to save power - by sitting in the cold. Of course, it is not too bad at the mo, and NZ winters, in the main centres, are a few degrees warmer than many parts of UK, but it will be cold enough, once you have sat there all night. A number of businesses here - those that are high power users - have been forced to shut down for days at a time, losing business and making future job losses, etc, more likely. In time, the very high prices will, presumably, have an impact on all business, cos they are certainly having an impact on ordinary householders.
As for your monthly bill being more than your quarterly UK bill, thats complete rubbish. My monthly power bill is around the $45 mark that's approx £15 a month (using an exch rate of $2.84 to the £) or £60 a quarter, which is LESS than what I was paying in the UK. I accept that salaries are less in NZ, even so your overall living costs are CONSIDERABLY lower than in the UK. NZ's electrical generation costs are actually among the lowest - nearly 70% is generated by Hydro stations. Geothermal also accounts for something like 7% & the remainder from gas or coal.

Of course, there is more to life than elec bills, but this is posted here as info for those who may be interested in NZ. Homes with gas heating are more rare here and, in any case, as I said above, Maui gas field reserves being smaller than hoped has also pushed the price of gas up, and so you get hit there too. Of course, in many things, there is no substitute for elec anyway.
As for gas - yes, the Maui field is running down, however it's not going to happen Tomorrow! There is at least another 5-7 years supply left, and in any case residential users will not be exposed to massive price increases, as the amount of gas used for residential purposes is tiny compared to large industrial users (and sold on fixed-price contracts similar to electricity). The reason that it has run out so quickly is because we've used too bl**dy much! when the Crown Minerals dept drew up supply contracts back in the 70's they were on a 'use it or lose it' basis, which meant that unless a company with mining rights abstracted it, those rights could be given to another company who would. This resulted in the construction of a huge Methanol plant in Taranaki, which has consumed the vast majority of gas. Instead of being prudent, and leaving it in the ground. NZ does have plenty of other gas fields, however a lot of them are unexplored & mining companies have been bickering over rights/costs etc


Many broadcasters here - from all sides of political scene and at many levels of life - openly say things like "And they call this a first world country?" and "third world land", etc. This is rather harsh, but elec is so fundamental that this is what prompts it.
Well, when you consider that nearly 80% of NZ's electricity is generated by renewable resources, we are, in fact leading the world in environmental terms. This is the major drawback of using renewables - you are dependant on the weather. Of course you will get dry years. NZ needs to ensure it has sufficient alternative generation capacity to cover dry periods.

STOP PRESS!!! Just heard on the radio that Contact Energy, one of the main suppliers here, has already started cutting hot water supplies for 5 hours a day. They just started today. It is a real shame that NZ radio is not on the net cos it would be a great way to get in touch with the country before you arrive. I wish I had been able to hear much of what I have heard since arriving since the picture it paints is very much the reality here - good and not so good.
This is nothing new - electricity boards/retailers have in fact been controlling domestic hot water heating from the 70's when ripple control systems (as they are known) were put in. During peak periods of demand, (ie 8-10am, 6-8pmish) hot water heating load is switched off to reduce demand & prevent overloading of the transmission system. Usually this wont affect anyone, as a tank of hot water takes quite awhile to cool down, so you will have plenty of hot water for a shower/cooking etc. Obviously during the power crisis retailers need to reduce demand, and hot water is the first thing that will get hit, however they won't cut it off completely. If you think about it - the only times people use domestic hot water are first thing in the morning (to wash) and evening (to cook, & have baths/showers before bedtime). Switching off hot water for longer periods will just mean that people can't have a bedtime bath (I reckon if the situation gets really bad, hot water will only be heated for a few hours during the middle of the night, so people can have a shower/bath in the morning, and then for a couple of hours just before tea-time).

In summary - this is just a minor blip on the radar. In 2001 we had exactly the same problem, low hydro storage levels. If everyone does their bit and turns off lights/switches the TV/computer etc off at the wall rather than leaving it on standby we wont have a problem.

in any case, you're more than welcome to have a shower at my place - I don't have a ripple controlled meter, and live in the CBD...where the chances of a power cut are practically 0%

Russ
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Old May 2nd 2003, 3:51 am
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BritboyNZ,

Thanks for a well-informed and detailed reply. You seem to know a lot about the elec market, etc, and I was very interested to read what you said. However, you flatter NZ by using an exchange rate that does it a lot of favours - you know that 2.84 is an inappropriate number to use when trying to get a real idea of whether NZ is cheap or not compared to local incomes.

I have, however, realised that my comparison of my monthly NZ bill with my quarterly UK bill was wrong. However, it is, still, even using the inappropriate 2.84 exchange rate, significantly higher than I paid in the UK. There must be some reason to explain the discrepancy between your experience and my own - are you on your own, out all day, etc. - but it is not dishonesty on my part. My last monthly bill here was $65 = 23 GBP using 2.84 as exchange rate, or 69 GBP per quarter. This is some 25% more than my UK quarterly bill for similar season in the UK. A fairer comparison, taking wage differentials into account would be that my NZ bill is equivalent to about 98 GBP per quarter, much higher than my UK bills. If you question the use of a different conversion factor, explain why jobs paying 2.84 times the UK salaries are rare - for the same job, I mean. That is, in UK a person earning 20,000 GBP does not usually get 57,000 NZ dollars here - more like 35-40,000, so a factor of about 2 is more appropriate if people want to work out the effective cost of things.

You find NZ incredibly cheap? Rents and mortgages are cheap compared to wages, everything else is not. Presumably, those who find NZ overall cheap have brought bundles from the UK with which to buy a house or are supplementing life with UK savings. Admittedly, rent is a large part of one's outgoings, so yes, you can get by. Thank zod that some things are cheap otherwise it would be hard for many to get by - esp those on the average 35,000 dollars salary, and that is of course before stoppages.

As many NZers say, "you can have a nice life in NZ but you won't save anything" - bit of a drawback when you are trying to get a house deposit, etc, together, or pay off student loans. Perhaps this explains why so many Kiwis go to London to earn their deposits for back home. The OE is increasingly becoming more about economics than genealogy for many. Still, with the limited job market in NZ, OEs are more and more becoming stayOEs - Aus is currently receiving 32,000 more NZers as permanent stayers per year than it exports, for example.

I am glad to hear that the spot prices are not passed on to us residential punters immediately. However, in the long term, suppliers prices in the future will reflect their additional expenditure - large corporations do not absorb costs on our behalf.

Your point on NZ being ahead of much of the world regarding rewnewables is well made. However, I stand by my remarks regarding companies holding off production for days at a time because of spot price fluctuations - it has been well documented - and this is also going to have knock-on effects for NZ workers in the future. It is commonly agreed that NZ lacks capacity for elec generation and this is what prompts Helen Clark's "we cannot pray for rain every year" remarks when questioned about it on her euro tour this week.

You compared today's "energy crisis", as people are commonly calling it over here, to events in 2001. You will know that everyone else, including energy minister Pete Hodgson, is comparing it to the much more serious events of 1992. Time will tell. I hope your optimism is rewarded.

How does that rain dance go again? You put the left leg in, the left leg out ...

Cheers for a very interesting reply.

Slippers

Last edited by Slippers; May 2nd 2003 at 4:53 am.
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Old May 2nd 2003, 4:28 am
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Originally posted by Slippers

In summary it said: thanks for a well-informed and detailed reply. No thanks for the "rubbish" comment. You told your story, I told mine.

Slippers
I disagree. Britboy's comments were more factual
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Old May 2nd 2003, 5:13 am
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Originally posted by amy&matt
I disagree. Britboy's comments were more factual

In what sense?

If you mean about my bill comparison, I have acknowledged the error and given further comment. If you mean he quoted more data, etc. than me then I can only agree - he is very well up on the past situation. But if you mean in the sense that you agree more with his assessment than mine then I wonder if you could be more specific. How can events which may or may not take place in the future - blackouts, etc - be more or less "factual"? They haven't taken place yet.

At the moment, I am speculating about the near future, using media reports as my source of info, and that is the main point of my posts - future events and their impact on NZ's economy.

What do you disagree with in my analysis?

Yours interestedly,

Slippers
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Old May 2nd 2003, 5:30 am
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Originally posted by Slippers
In what sense?

If you mean about my bill comparison, I have acknowledged the error and given further comment. If you mean he quoted more data, etc. than me then I can only agree - he is very well up on the past situation. But if you mean in the sense that you agree more with his assessment than mine then I wonder if you could be more specific. How can events which may or may not take place in the future - blackouts, etc - be more or less "factual"? They haven't taken place yet.

At the moment, I am speculating about the near future, using media reports as my source of info, and that is the main point of my posts - future events and their impact on NZ's economy.

What do you disagree with in my analysis?

Yours interestedly,

Slippers
Quote from BritboyNZ:

"when you consider that nearly 80% of NZ's electricity is generated by renewable resources, we are, in fact leading the world in environmental terms. This is the major drawback of using renewables - you are dependant on the weather. Of course you will get dry years. NZ needs to ensure it has sufficient alternative generation capacity to cover dry periods."

From an environmental perspective, NZ should be applauded for adopting this system. Johnny Howard over here has been a disgrace in all environmental policies. The fact that he is still a runaway leader in the opinion polls speaks volumes about how much the Aussies here care for their environment.

:lecture:
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Old May 2nd 2003, 5:58 am
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Originally posted by amy&matt
Quote from BritboyNZ:

"when you consider that nearly 80% of NZ's electricity is generated by renewable resources, we are, in fact leading the world in environmental terms. This is the major drawback of using renewables - you are dependant on the weather. Of course you will get dry years. NZ needs to ensure it has sufficient alternative generation capacity to cover dry periods."

From an environmental perspective, NZ should be applauded for adopting this system. Johnny Howard over here has been a disgrace in all environmental policies. The fact that he is still a runaway leader in the opinion polls speaks volumes about how much the Aussies here care for their environment.

:lecture:
As I said, I found much of BritboyNZ's points on renewables well made.

However, let me throw this in: in my opinion, NZ's "clean and green" image is on somewhat dodgy ground. This is always used as a stick with which to beat the rest of the world and this is very disingenuous. There is a tiny population in a country the size of Britain. If it were not pretty free of pollution, etc, then it would be a cause for great shame would it not? NZ tends to look down on more industrialised nations with considerably larger populations for their being dirty and so on, but this is to ignore the fact that these countries have had to develop means of supply for many, many millions of people, living in densely-packed housing, and indeed, the pakeha presence in NZ itself was born from these places. NZ's population is predicted to hit around 4.8 million and then start falling so it will never have to confront many of the difficulties that more densely-populated countries face. However, NZ benefits greatly - in terms of products, ideas, new skills, markets for their agricultural exports, etc - from such dirty, over-crowded places. It is good that NZ is amongst the countries of the world that is looking ahead and trying to be more renewable, but whilst doing so it should not forget to go easier on others. It reminds me of the way that 'developed' countries now are wishing to limit pollution in India, say, cos they are saying that it is unacceptable, without remembering that they did just that themselves in the past and are only in a position to start building large-scale windmills, hydroelec plants, etc, cos of having relied on non-renewables for so long and cos of having them available for use now. Non-renewables will be necessary, in great amounts, for many years to come yet and it is better to not pretend that this is cos of some inherent failing in the countries concerned.
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Old May 2nd 2003, 6:05 am
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Originally posted by Slippers
As I said, I found much of BritboyNZ's points on renewables well made.

However, let me throw this in: in my opinion, NZ's "clean and green" image is on somewhat dodgy ground. This is always used as a stick with which to beat the rest of the world and this is very disingenuous. There is a tiny population in a country the size of Britain. If it were not pretty free of pollution, etc, then it would be a cause for great shame would it not? NZ tends to look down on more industrialised nations with considerably larger populations for their being dirty and so on, but this is to ignore the fact that these countries have had to develop means of supply for many, many millions of people, living in densely-packed housing, and indeed, the pakeha presence in NZ itself was born from these places. NZ's population is predicted to hit around 4.8 million and then start falling so it will never have to confront many of the difficulties that more densely-populated countries face. However, NZ benefits greatly - in terms of products, ideas, new skills, markets for their agricultural exports, etc - from such dirty, over-crowded places. It is good that NZ is amongst the countries of the world that is looking ahead and trying to be more renewable, but whilst doing so it should not forget to go easier on others. It reminds me of the way that 'developed' countries now are wishing to limit pollution in India, say, cos they are saying that it is unacceptable, without remembering that they did just that themselves in the past and are only in a position to start building large-scale windmills, hydroelec plants, etc, cos of having relied on non-renewables for so long and cos of having them available for use now. Non-renewables will be necessary, in great amounts, for many years to come yet and it is better to not pretend that this is cos of some inherent failing in the countries concerned.

Never been to NZ, not planning on living there ....but this is an interesting thread!
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Old May 2nd 2003, 6:11 am
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Noticed you have suddenly edited your previous posting.......hmmmm....that does alter the flow of the thread as people have reacted to what you have said previously

Anyway, some of us are at work and it's another hour before we can sink some so au revoir et bonne chance
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Old May 2nd 2003, 6:20 am
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Originally posted by amy&matt
Noticed you have suddenly edited your previous posting.......hmmmm....that does alter the flow of the thread as people have reacted to what you have said previously

Anyway, some of us are at work and it's another hour before we can sink some so au revoir et bonne chance

Yes, sorry about that. I wanted to make some changes before anyone replied - I changed my mind a bit - but you beat me to it! I see this is rather unfair though, so apologies.

Any further thoughts though?

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Old May 2nd 2003, 6:31 am
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I agree NZ is very environmentally friendly with it's power generation and a lot of other things that make it a beautiful country to live in.

BUT
If it wants to be considered a 1st word country it MUST have a reliable source of Electricty (no matter how it's generated). This is the 2nd time this has happened in the last couple of years.

It could also be scaremongering from the local papers, as headlines reading Blackout Imminent make for good sales of newspapers, but I don't think so if the power companies are actively encourgeing people to reduce consumption.

What about industry, they aren't going to invest in a country that cannot guarantee them a reliable source of power. Tourism and farming can only provide relatively low paid jobs, and not the sort that young NZers want so even more might decide the grass is greener somewhere else. NZ is desperately short of industry now, so what is this going to do to potential investors.

Why is the government still talking about this ACTION is needed. I understand Huntly is sitting on enough coal to supply a large power station for a hundred years or more. This is tried and tested technology so get on and build one.

Even if it rains for a month in the catchment areas and the danger passes, it still needs to take positive action to eliminate the risk again next year, and to reassure buisness and it's own population. It looks like what they did last time was breath a collective sigh of relief and claim it was a 1 in a hundred years event and went back to planning their nice new offices in Wellington.
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Old May 2nd 2003, 9:31 am
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[i]exchange rate that does it a lot of favours - you know that 2.84 is an inappropriate number to use...
$2.84 to the is the rate I got a week or so ago when I withdrew some cash from my UK bank account (Nationwide dont charge any fees etc - you just get whatever the exchange rate of the day is) which is what I used in my calculations

I have, however, realised that my comparison of my monthly NZ bill with my quarterly UK bill was wrong. However, it is, still, even using the inappropriate 2.84 exchange rate, significantly higher than I paid in the UK. There must be some reason to explain the discrepancy between your experience and my own - are you on your own, out all day, etc. - but it is not dishonesty on my part. My last monthly bill here was $65 = 23 GBP using 2.84 as exchange rate, or 69 GBP per quarter. This is some 25% more than my UK quarterly bill for similar season in the UK. A fairer comparison, taking wage differentials into account would be that my NZ bill is equivalent to about 98 GBP per quarter, much higher than my UK bills. If you question the use of a different conversion factor, explain why jobs paying 2.84 times the UK salaries are rare - for the same job, I mean. That is, in UK a person earning 20,000 GBP does not usually get 57,000 NZ dollars here - more like 35-40,000, so a factor of about 2 is more appropriate if people want to work out the effective cost of things.
I think energy efficiency / how you & I heat our homes may have a lot to do with it - back in the UK I was paying a fair amount (quarterly bill around £90-100) as my pad had electric storage heaters, which are inherently more expensive to run than a gas central heating system.



You find NZ incredibly cheap? Rents and mortgages are cheap compared to wages, everything else is not. Presumably, those who find NZ overall cheap have brought bundles from the UK with which to buy a house or are supplementing life with UK savings. Admittedly, rent is a large part of one's outgoings, so yes, you can get by. Thank zod that some things are cheap otherwise it would be hard for many to get by - esp those on the average 35,000 dollars salary, and that is of course before stoppages.
Petrol - 98.5c a litre over here (34.7 UK pence a litre). Car Insurance - $600 a year (£211). 12 months motor registration (our equivalent of the UK Road Tax) $217.05 (£76). Weekly supermarket shopping for 1 person (includes a bottle or 2 of wine!) $120 (£42). Compare to UK prices: not sure how much a litre of petrol is in the UK, however when I was there last it was around the 80pence p. Litre mark ($2.27!! - there would be a national outrage of UK fuel strike proportions if petrol was that dear in NZ!). Road Tax was £105 when I was there last. Insurance - easily £400. I don't know that many people on $35,000. Most people on this board seem to be professional and indeed, in order to get permanent residence in NZ these days you need to have skills and experience. I would put the average professional income in NZ to be something around the $55-60K mark. Certainly nowhere near as low as $35,000.

As many NZers say, "you can have a nice life in NZ but you won't save anything" - bit of a drawback when you are trying to get a house deposit, etc, together, or pay off student loans. Perhaps this explains why so many Kiwis go to London to earn their deposits for back home. The OE is increasingly becoming more about economics than genealogy for many. Still, with the limited job market in NZ, OEs are more and more becoming stayOEs - Aus is currently receiving 32,000 more NZers as permanent stayers per year than it exports, for example.
I agree entirely, starting salaries for junior doctors, nurses etc are paltry, which is why so many leave for Oz/the UK as you say. It is a well documented phenomena that NZ loses people to australia/UK in the good times, but they return during the hard times.

I am glad to hear that the spot prices are not passed on to us residential punters immediately. However, in the long term, suppliers prices in the future will reflect their additional expenditure - large corporations do not absorb costs on our behalf.
The surges in the spot price are of very short duration, usually caused by some unexpected event (eg a power station loses generating capacity due to breakdown (which in turn means transpower has to call on more expensive generating plant to make up the shortfall). The spot price then returns to normal once the fault/event has been corrected. Electricity prices do tend to rise slightly during winter as more thermal (gas/coal) generation has to be called upon to meet demand. But in 2.5yrs in NZ I haven't seen huge price hikes so far.

Your point on NZ being ahead of much of the world regarding rewnewables is well made. However, I stand by my remarks regarding companies holding off production for days at a time because of spot price fluctuations - it has been well documented - and this is also going to have knock-on effects for NZ workers in the future. It is commonly agreed that NZ lacks capacity for elec generation and this is what prompts Helen Clark's "we cannot pray for rain every year" remarks when questioned about it on her euro tour this week.
These problems have arisen partly out of the way the electricity market was de-regulated, and the Resource Management Act which makes building new stations very difficult. A new power station (forget the name) was recently refused resource consent, and since the market de-regulated there has been a DROP in the amount of new generation coming on stream. However, demand for electricity continues to rise by something like 5% a year.

You compared today's "energy crisis", as people are commonly calling it over here, to events in 2001. You will know that everyone else, including energy minister Pete Hodgson, is comparing it to the much more serious events of 1992. Time will tell. I hope your optimism is rewarded.

How does that rain dance go again? You put the left leg in, the left leg out ...
Nothing to do with rain dances. Politically, this is a very hot potato and I doubt very much the government will allow things to get as bad as blacking out whole areas of the country. Remember that domestic use of electricity only accounts for about a third of all electricity used in NZ. If things get really bad, I reckon the govt will order Transpower to disconnect a few large industrial sites (and maybe pay compensation) rather than risk alienating the general population.

Last edited by BritboyNZ; May 2nd 2003 at 9:34 am.
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Old May 2nd 2003, 10:52 am
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Originally posted by Slippers
As I said, I found much of BritboyNZ's points on renewables well made.

However, let me throw this in: in my opinion, NZ's "clean and green" image is on somewhat dodgy ground. This is always used as a stick with which to beat the rest of the world and this is very disingenuous. There is a tiny population in a country the size of Britain. If it were not pretty free of pollution, etc, then it would be a cause for great shame would it not? NZ tends to look down on more industrialised nations with considerably larger populations for their being dirty and so on, but this is to ignore the fact that these countries have had to develop means of supply for many, many millions of people, living in densely-packed housing, and indeed, the pakeha presence in NZ itself was born from these places. NZ's population is predicted to hit around 4.8 million and then start falling so it will never have to confront many of the difficulties that more densely-populated countries face. However, NZ benefits greatly - in terms of products, ideas, new skills, markets for their agricultural exports, etc - from such dirty, over-crowded places. It is good that NZ is amongst the countries of the world that is looking ahead and trying to be more renewable, but whilst doing so it should not forget to go easier on others. It reminds me of the way that 'developed' countries now are wishing to limit pollution in India, say, cos they are saying that it is unacceptable, without remembering that they did just that themselves in the past and are only in a position to start building large-scale windmills, hydroelec plants, etc, cos of having relied on non-renewables for so long and cos of having them available for use now. Non-renewables will be necessary, in great amounts, for many years to come yet and it is better to not pretend that this is cos of some inherent failing in the countries concerned.
Agree with your comments re population - NZ is and will remain tiny compared to other nations. However, dependence solely on renewables can be extremely risky, as we are finding out to our cost. No matter how many hydro stations you have, If it don't rain, you're stuffed. The greens are always harping on about how we should be utilising more renewables, but unless a country has large mountainous areas for hydro schemes, the other options like solar, geothermal, wind etc will never ever IMO meet demand for electricity.

Personally, I am a big supporter of nuclear energy - which is very clean. No CO2 emissions, no nitrous/sulphur oxides & provides a very large source of energy. Its only drawback is disposal of nuclear waste but this problem could be overcome - build deep repositories in hard rock deep underground. The anti nuclear lobby moan and whinge that operating nuclear stations/re-processing spent fuel increases the plutonium stockpile, and subsequently increases the risk of theft / nuclear terrorism. True - but only if the waste is re-processed. The original thinking back in the 60s/70's behind re-processing spent nuclear fuel to recover unused uranium was that it was thought that uranium ore reserves were finite, and would run out therefore re-processing would be necessary, now known to be untrue. So why bother with the expense/security & accident risks of re-processing? Just remove the spent rods, encapsulate them in stainless steel/concrete casks & then store the casks at a very secure remote location.

Another point often raised is the risk of an accident. People often go on about windscale/three-mile island & Chernobyl. Which were all unique and different accidents, caused either by poor reactor design (windscale/chernobyl) or human error (TMI / Chernobyl). Remember that the western world has been using nuclear energy for nearly 50 years, there is a huge amount of research/knowledge learnt about reactor design/safety systems and so on. Nuclear energy is becoming safer, and will continue to do so as technology advances. To throw away the benefits of nuclear power because it is 'plain old unsafe' is madness. I agree there is a significant RISK, but as with all risks they can be managed. The greens can't have it both ways with just renewables- reduced carbon emissions AND a cheap, plentiful supply of energy on which modern society depends.

This will, of course, never happen in NZ - the greens & a fair proportion of the NZ population are anti-nuclear. Look at the countries policy of not allowing american nuclear powered ships/subs into its territory. Plus NZ's small population means that nuclear power will never really be necessary - with careful management of hydro resources, and a few more thermal stations for dry years (Huntly sits ontop of millions of tonnes of coal as kiwipaul says!). For the UK however, it is completely different. What happens in 5/10/15 years time when all of our old Magnox & AGR nuclear stations (that generate about 25% of the UKs electricity) come to the end of their lives and are decommissioned? Can the greens honestly say that renewables will step in and save the day? I think not.
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Old May 2nd 2003, 1:21 pm
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Originally posted by Slippers
BritboyNZ,

Thanks for a well-informed and detailed reply. You seem to know a lot about the elec market, etc, and I was very interested to read what you said. However, you flatter NZ by using an exchange rate that does it a lot of favours - you know that 2.84 is an inappropriate number to use when trying to get a real idea of whether NZ is cheap or not compared to local incomes.

I have, however, realised that my comparison of my monthly NZ bill with my quarterly UK bill was wrong. However, it is, still, even using the inappropriate 2.84 exchange rate, significantly higher than I paid in the UK. There must be some reason to explain the discrepancy between your experience and my own - are you on your own, out all day, etc. - but it is not dishonesty on my part. My last monthly bill here was $65 = 23 GBP using 2.84 as exchange rate, or 69 GBP per quarter. This is some 25% more than my UK quarterly bill for similar season in the UK. A fairer comparison, taking wage differentials into account would be that my NZ bill is equivalent to about 98 GBP per quarter, much higher than my UK bills. If you question the use of a different conversion factor, explain why jobs paying 2.84 times the UK salaries are rare - for the same job, I mean. That is, in UK a person earning 20,000 GBP does not usually get 57,000 NZ dollars here - more like 35-40,000, so a factor of about 2 is more appropriate if people want to work out the effective cost of things.

You find NZ incredibly cheap? Rents and mortgages are cheap compared to wages, everything else is not. Presumably, those who find NZ overall cheap have brought bundles from the UK with which to buy a house or are supplementing life with UK savings. Admittedly, rent is a large part of one's outgoings, so yes, you can get by. Thank zod that some things are cheap otherwise it would be hard for many to get by - esp those on the average 35,000 dollars salary, and that is of course before stoppages.

As many NZers say, "you can have a nice life in NZ but you won't save anything" - bit of a drawback when you are trying to get a house deposit, etc, together, or pay off student loans. Perhaps this explains why so many Kiwis go to London to earn their deposits for back home. The OE is increasingly becoming more about economics than genealogy for many. Still, with the limited job market in NZ, OEs are more and more becoming stayOEs - Aus is currently receiving 32,000 more NZers as permanent stayers per year than it exports, for example.

I am glad to hear that the spot prices are not passed on to us residential punters immediately. However, in the long term, suppliers prices in the future will reflect their additional expenditure - large corporations do not absorb costs on our behalf.

Your point on NZ being ahead of much of the world regarding rewnewables is well made. However, I stand by my remarks regarding companies holding off production for days at a time because of spot price fluctuations - it has been well documented - and this is also going to have knock-on effects for NZ workers in the future. It is commonly agreed that NZ lacks capacity for elec generation and this is what prompts Helen Clark's "we cannot pray for rain every year" remarks when questioned about it on her euro tour this week.

You compared today's "energy crisis", as people are commonly calling it over here, to events in 2001. You will know that everyone else, including energy minister Pete Hodgson, is comparing it to the much more serious events of 1992. Time will tell. I hope your optimism is rewarded.

How does that rain dance go again? You put the left leg in, the left leg out ...

Cheers for a very interesting reply.

Slippers
23GBP a month was 25% HIGHER than your UK monthly bill!

You cant have had many lightbulbs in your UK house! I pay an average of 40-50 GBP per month in the summer and almost double that in the winter, due to electric storage heaters. This is with the bill being reduced by using overnight "economy seven".

I sincerely wish I had your electric bill.

Phil.
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