The Greens propose a state-owned energy company

It says ‘Kiwipower’ would solve our current affordability and supply problems, writes Henry Oliver in today’s excerpt from The Bulletin.

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The Green Party launched its energy policy yesterday, centred on a new publicly owned Crown entity called ‘Kiwipower’. Co-leaders Marama Davidson and Chlöe Swarbrick announced the policy at Dunedin’s Gasworks Museum, with Swarbrick quoted by the Herald’s Ben Tomsett as saying: “Gas belongs in a museum. But Luxon’s Government wants to lock us into 15 more years of imported fossil fuels and higher prices with their expensive LNG terminal. That is a choice – and it is the wrong one.”

Kiwipower would require $980m in funding, part of a wider energy package (more on that below)  costed at around $3.1bn over four years, including $2.1bn in operating expenditure and just over $1bn in capital spending, all funded through the Greens’ proposed ‘super-rich tax’ and the reallocation of fossil fuel subsidies.

What Kiwipower would actually do

Kiwipower’s core purpose is to address what the Greens – which claims it is backed by OECD, Infrastructure Commission and Frontier Economics analysis – say is an undersupply of ‘firming’ capacity: the backup generation needed to keep the lights on when hydro lakes are low, wind drops, or demand peaks. 

BusinessDesk’s Ian Llewellyn reported that Kiwipower would do this in two ways: first, by investing directly in new firming resources including geothermal, batteries, biomass, demand response and pumped hydro; and second, by contracting existing hydro and thermal capacity from the major gentailers and making it available to independent generators, retailers and energy users at transparent, fair prices. 

The four major companies – Meridian, Contact, Mercury and Genesis, which together control more than 85% of both generation and retail markets – would be required to provide a portion of their firming capacity to Kiwipower. BusinessDesk noted the policy leaves key design questions unresolved, including how much capacity would be required, how prices would be set, whether allocation would be regulated or compulsory, and how Kiwipower would interact with Transpower and the Electricity Authority.

The broader package

Beyond Kiwipower, the NZ Herald reported that the policy includes zero-interest, property-linked clean energy loans for homeowners to install solar and batteries; a “renters’ right to solar” legalising plug-in solar systems; regulation of solar export prices; a $970m expansion of Warmer Kiwi Homes covering insulation, ventilation, hot-water heat pumps and the replacement of gas heating and stoves; a $200m community energy fund for schools, marae, libraries and iwi; and $460m to put solar on 40,000 public homes within four years, including an $80m Māori housing renewable energy fund.

The Post’s Harriet Laughton noted the zero-interest loan policy had already been announced earlier this year and subsequently picked up by both National and Labour. Swarbrick said a fully electrified home with solar could save up to $1,000 a year on power bills, including the cost of paying off the system, while plug-in solar could save renters up to $350 annually. With 200,000 households currently unable to afford to heat their homes, she said, the current market had demonstrably failed.

“Generations of New Zealanders built our energy infrastructure, and two National governments have sold it off for parts, driving up bills and reducing New Zealanders’ power and control,” Swarbrick is quoted as saying in The Post, which notes that the Government already has a majority ownership in several energy companies. “The Greens will fix that by investing in putting power directly in the hands of our communities.”

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