11. Question No. 11—EnergySCOTT WILLIS (Green) to the Minister for EnergyQuestion No. 11—EnergySCOTT WILLIS (Green): Thank you Mr Speaker. [Interruption]SPEAKER: No hang on—just wait until the House is polite enough to listen to your question.11. SCOTT WILLIS (Green) to the Minister for Energy: Does he consider the electricity market is broken in light of the current electricity crisis and significant increase in gentailer profits?Hon SIMEON BROWN (Minister for Energy): I'm advised that the electricity market is facing extreme stress due to a significant shortage of energy. This shortage is leading to extremely high wholesale spot prices and is due to hydro storage which is currently among the lowest since 1992; natural gas production which has dropped 27.8 percent in production in the first three months of this year; wind generation which has also been below average since April this year meaning 250 gigawatts less energy has been produced than was expected. In the short term some immediate actions have been taken. Methanex has closed down production providing that gas into the electricity market. Tīwai has reduced demand and Transpower is consulting on bringing forward contingent supply. However shortage and extreme prices are having a significant impact on businesses. The Government is considering a range of options including the importation of liquefied natural gas.Scott Willis: Does he agree with statements from his Associate Minister that there are significant deficiencies" in the market and that gentailers are "profiteering" from New Zealanders?Hon SIMEON BROWN: This Government is taking this issue incredibly seriously. We are receiving a range of advice on options that could be taken. What I would say is that we have an energy shortage and much of that is due to the significant downgrade in our gas production this year. We have to remember for the last six years the last Government demonised gas production in New Zealand and has left us with a shortage in the energy needed. So when the wind isn't blowing the sun's not shining and we have a dry hydrological year we don't have the backup. The only project they had on the table was a phantom project for 2038. They thought that was the answer. They have left New Zealand with an insecure energy sector and they should take responsibility.Scott Willis: Thank you Mr Speaker. Is he comfortable with gentailers raking in $512 million in profit over the last six weeks as electricity prices tripled with more than 110000 Kiwi households that can't afford to keep their homes warm this winter and if not what is he going to do about it?Hon SIMEON BROWN: Well households don't pay the wholesale spot prices but we are concerned in particular around this issue and that is why this Government has asked the Electricity Authority to publish data on the margins which have been made by generators over the last little while. They're doing so on a weekly basis because we need to have that data to give confidence that price gouging is not happening. But I would make this point again: the reason we are having such significant and extreme prices is because we have an energy shortage in New Zealand. We have a dry hydrological year wind generation has been below average and importantly the downgrade in gas reserves and production has been because the last six years demonised gas production in this country.SPEAKER: Yep very good—point's made.Scott Willis: Thank you Mr Speaker. Can he explain exactly how the reversal of the oil and gas ban will fix the current crisis considering that a new gasfield could take a decade or longer to develop and bring online and that we have more than 10 consented renewable energy projects ready to go now?Hon SIMEON BROWN: Well we need more wind we need more gas we need more hydro—we need more energy in this country and the last Government's decisions the reckless policies of the last Government have meant that this country's energy's been put at risk.Hon Dr Duncan Webb: Point of order. I probably don't need to say sir but that's the third occasion on which he has called the last Government reckless mentioned demonising gas twice and phantom projects. They're all entirely inappropriate.SPEAKER: We're going to have that heard again because there was talking all the way through it. So Dr Duncan Webb make your point of order one more time.Hon Dr Duncan Webb: The Minister in his answers has on three occasions attacked the former Government using inflammatory language.SPEAKER: Yes that's true and I had noted that. But I think there was an equally inflammatory sort of aspect to the questions that were being asked. I think it's not unreasonable to refer to policies from a previous Government. We've been through this before. I think the last statement was something that I was about to stand on and started to when you took your feet. So we'll just have a bit of a calm-down on all of this. The next supplementary goes to Simon Court.Simon Court: Does the Minister agree that fixing the electricity crisis requires a stable investment environment and how important is a cross-party agreement on the use of natural gas to restoring confidence and stability for investors?Hon SIMEON BROWN: I completely agree with that statement by the member. In fact I invite the Opposition to support this Government when we bring legislation to the House later this year to reverse the ban on oil and gas so that we can have the sovereign security of investment in this country once again in our energy security.Scott Willis: Will he use his power to direct the Electricity Authority to enforce its code to create a fair market while people around the country are struggling to make ends meet in a cost of living crisis and if not why not?Hon SIMEON BROWN: The market relies on supply and demand. The issue here is that we don't have enough supply in New Zealand. As I've already said we have the dryest hydrological year since 1992 we have wind generation which has been below average we have had a significant downgrade in our gas production and the reality is that we need more production. We need more wind we need more solar we need more geothermal we need more hydro and we need more gas so we can have the market security of supply that New Zealand businesses and wholesalers have. The last Government's policies have put that at risk and we are having to clean it up.Scott Willis: Point of order Mr Speaker.SPEAKER: Point of order Scott Willis. Make sure it is a point of order.Scott Willis: Thank you Mr Speaker. I don't believe the Minister addressed my question at all. I simply asked whether he would use his power to direct the Electricity Authority to enforce its code; I did not ask about other forms of generation.SPEAKER: Well with all due respect I think that was an address to the question. Well maybe not—perhaps you couldn't get it but I did. We're moving on to question No. 12."