Clark DavidHon Dr DAVID CLARK (Minister for State Owned Enterprises): I do want to start by acknowledging and congratulating the previous speaker Simon Court on his dexterity. I mean it is one of the most challenging things to do I suspect for an ACT member to explain away a market failure when it is so apparent and so obvious and so right there in your face—if you're a believer in markets to then have to kind of awkwardly try to work out how the system should work better and then to come up with a solution which involves intervening effectively in the market to promote coal and gas as the way forward! You can see the dexterity in his argument and I do want to acknowledge that at the outset.What we have here and it couldn't be clearer is a market failure. If we're going to have a market-oriented system providing security of supply then the market must deliver—Hon Gerry Brownlee: Explain that.Hon Dr DAVID CLARK: The market did not deliver Mr Brownlee. We have a market—we have a market—the market did not deliver; the lights went out.Hon Gerry Brownlee: How did the market fail?Hon Dr DAVID CLARK: That is a market failure in my book. How that is not a failure in Mr Brownlee's book I think he'll explain in his contribution I'm quite sure. There are quite a few blue herrings" being introduced into this debate through the debate and we've heard some yellow ones as well. One of them is that there wasn't sufficient capacity in the system. We know for a fact there is sufficient capacity in the system. What didn't happen was operationally the available capacity was not brought to bear in the market by the market participants. So we have a market. The market participants did not deliver what the market is supposed to deliver which is keeping the lights on and the heaters on for New Zealanders.So regardless of the machinations of the electricity market though I think New Zealanders should have a reasonable expectation that the heaters are running on a cold winter's night that the lights are on and that is why the situation that unfolded on Monday night is unacceptable. The assurance though that we can give to New Zealanders is that we did have the physical capacity to generate; that is not in question tonight. And so these blue and yellow herrings about the journey we're on to be carbon neutral and how this is the creator of the whole problem—people at home should not believe that.In terms of the question that the members have asked previously around when I as the Minister for State Owned Enterprises was alerted to this it was not before the Minister of Energy and Resources so there was a failure of the no-surprises approach in my view. The Minister of energy has met with Transpower immediately to address this issue and to seek to ensure it's not repeated and they are putting new protocols in place to ensure that that no-surprises policy does not fail in future. But of course that is kind of irrelevant as the Minister of Finance—Hon Gerry Brownlee: No it's not. It's totally relevant.Hon Dr DAVID CLARK: —has pointed out to what happened on the evening because it is not the place of Ministers to make the decisions about when the power is switched on and off. And if Mr Brownlee wants to argue that it is I will be most interested in his contribution because on the one hand we have those in the National Party who favour the market solutions. I've heard Simon Bridges stand up in this House when he was over on this side in a difficult past time as opposed to the current difficult time for the National Party when he argued that 15 years on from—the market just needed a bit more time to bed in. That was the reason that they were having problems with the power prices in the market when National were in Government. Now Mr Brownlee who has been responsible as energy Minister for the market supplying power for the way that it's set up currently seems to be arguing for a more interventionist approach. And it would be very interesting to see if he's changed his mind and now thinks that Ministers should be controlling and making these decisions about when power is put into the market. Hon Gerry Brownlee: Don't speak for me—Hon Dr DAVID CLARK: We'll hear his contribution—we'll hear. But right now the Government is focused on ensuring that the right mechanisms are in place early enough to secure supply. Those questions are being asked. We don't want to see this situation repeat. The market failed on this occasion and if we want to have a market-oriented system supplying our power we need security of supply and we need the market to deliver. It failed on this occasion. I do want to say a couple more things—mindful of time—that kind of fall within my broader ambit. I've had reports from the Telecommunications Forum following Monday night's power outages that they're not aware of any significant impacts on telecommunications as a result of the outages because of course their networks are built with a degree of redundancy especially for short-term power outages. They have battery backups and generators. They were not actually required on this occasion. So I just want to put that on the record for the House because questions have been raised about that. There were no disruptions. Consumer New Zealand has also raised an issue around the right to compensation for consumers from their electricity suppliers. And I do want to note and electricity consumers do have a right to appropriate compensation that some of the suppliers have already taken proactive steps and are supplying credits to people they supply electricity to. So I note that and find that encouraging. So to round out my contribution I do want to assure New Zealanders that we do have the physical capacity to generate the power that we need in our system. Commercial decisions operational decisions have been made not to put the generation into the market on this occasion and the appropriate inquiries are in place because we believe New Zealanders need to have the assurance that security of supply is ensured."