The Current Energy Landscape
New Zealand's energy sector is experiencing unprecedented challenges. The country is grappling with a severe shortage of natural gas, which has led to increased energy costs and supply constraints¹. This shortage is exacerbated by the closure of the Marsden Point oil refinery and low hydro lake levels due to insufficient rainfall². As a result, electricity prices have surged, putting immense pressure on businesses and consumers alike³.
The Spot Price Impact:
The Wholesale spot price have been soaring from the past week now reaching as high as $1000/MWh (1000 kWh) which is almost 5 times of the standard average of $220-$275 per MWh. This is one the major factors contributing to the panic in the energy market.
The below shows the increase in the wholesale spot price in recent weeks:

Impact on Businesses
The energy crisis has had a profound impact on various sectors. For instance, Pan Pac, a forestry owner and processor in Hawkes Bay, reported a three-fold increase in gas costs, from $3 million a year to potentially $9 million¹. Similarly, Winstone's central North Island pulp and timber mills have temporarily shut down due to unsustainable energy costs, risking hundreds of jobs⁴. These examples highlight the urgent need for businesses to adapt and find innovative solutions to mitigate the impact of rising energy costs.
A Perspective from an Energy Manager
As an Energy Manager, we understand the critical importance of energy efficiency and cost management during such crises. One effective strategy is leveraging services like Manage My Bills, which can help businesses optimize their energy usage and reduce costs. Manage My Bills offers comprehensive energy management solutions, including energy audits, tariff analysis, and contract negotiation, ensuring businesses get the best possible rates and services.
Steps to Mitigate the Impact
1. Energy Efficiency: Implementing energy-efficient practices and technologies can significantly reduce energy consumption and costs. This includes upgrading to energy-efficient lighting, optimizing heating and cooling systems, and investing in renewable energy sources.
2. Demand Response Programs: Participating in demand response programs can help businesses manage their energy usage during peak demand periods, reducing costs and alleviating pressure on the grid.
3. Energy Audits: Conducting regular energy audits can identify areas where energy is being wasted and provide actionable insights to improve efficiency.
4. Contract Negotiation: Reviewing and renegotiating energy contracts can ensure businesses are not overpaying for their energy needs. Services like Manage My Bills can assist in securing favorable terms and rates.
5. Alternative sources of Energy: Investing in solar energy and other renewable sources can provide long-term savings and sustainability benefits. Solar panels, in particular, can help businesses generate their own electricity during peak time and hence reduce the impact of peak price increases.
While the current energy crisis presents significant challenges, it also offers an opportunity for businesses to innovate and adopt more sustainable practices. By focusing on energy efficiency, participating in demand response programs, and leveraging expert services, businesses can navigate this crisis and emerge stronger.
Thank you for your attention to this important issue. If you have any questions or need further assistance, please do not hesitate to reach out.
We have added a real time Spot price dashboard on our website at https://www.managemybills.co.nz/business-power-energy-saving and scroll down to the bottom of the page to view the real map sport map.
Best regards,
Sourabh Sahni
Source:
(1) NZ is running out of gas – literally. That’s good for the climate, but .... https://theconversation.com/nz-is-running-out-of-gas-literally-thats-good-for-the-climate-but-its-bad-news-for-the-economy-235645.
(2) Energy in New Zealand 2023 shows renewable electricity generation .... https://www.mbie.govt.nz/about/news/energy-in-new-zealand-2023-shows-renewable-electricity-generation-increased-to-87-percent.
(3) New Zealand’s energy emergency | The Spectator Australia. https://bing.com/search?q=recent+energy+crisis+in+new+zealand.
(4) New Zealand's energy crisis - how it happened and who's to blame. https://www.newstalkzb.co.nz/news/politics/new-zealands-energy-crisis-how-it-happened-and-whos-to-blame/.
(5) New Zealand’s energy emergency | The Spectator Australia. https://www.spectator.com.au/2021/08/new-zealands-energy-emergency/.
(6) Associate Energy Minister Shane Jones is accusing New Zealand's big power companies of sitting on their hands with an energy crisis looming. https://home.nzcity.co.nz/news/article.aspx?id=404375&tsp.
(7) Human cost of energy crisis mounts as jobs slashed. https://www.msn.com/en-nz/news/national/human-cost-of-energy-crisis-mounts-as-jobs-slashed/ar-AA1ovaLQ.
(8) Kerre Woodham: How long is a fix for the energy crisis going to take?. https://www.newstalkzb.co.nz/on-air/kerre-woodham-mornings/opinion/kerre-woodham-how-long-is-a-fix-for-the-energy-crisis-going-to-take/.
(9) Our electricity market is short-circuiting. Can it be fixed?. https://thespinoff.co.nz/business/12-08-2024/our-electricity-market-is-short-circuiting-can-it-be-fixed.
(10) New Zealand’s energy emergency | The Spectator Australia. https://bing.com/search?q=energy+crisis+in+new+zealand.
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