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Cyclone Gabrielle: how did we get here and where to next?
We have all watched with varying degrees of horror and sadness as first Auckland and then, a week later, the entire North Island suffered from catastrophic weather events and their aftermaths.
I can’t help but think we were warned about this over two decades ago and that these events are a shocking example of climate change writ large, with more to come.
‘Climate change, and specifically global warming, is not new. Swedish scientist Svante Arrhenius posited that burning fossil fuels would add carbon dioxide to the atmosphere resulting in a ‘greenhouse effect’ (anthropogenic climate change) in an essay in 1896. ‘Global warming’ came into the public domain in a paper by Wallace Broecker published in the magazine Science in 1975. Source – John Walton Feb 18 2023
Critical infrastructure left wanting
My strategic hat tells me that this is a crisis for individuals and businesses that will rewrite the way we consider the basics such as reliability of power, water, food, sewerage systems, stormwater and fuel supplies.
The impact on communications is also significant. Our mobile phone and data networks rely on power to stay up. Battery backups are designed to maintain mobile transmission towers for a few hours until a service crew can arrive – not to keep systems up for days if not weeks without power.
This starts with our national grid and the local lines distribution network that delivers power directly to our homes and businesses. All these need to be designed and upgraded for greater resilience and higher availability. The issue here is that this costs a lot of money, time and resources.
For example, imagine that you are a lines company operator in a flood or storm damaged area like Hawke’s Bay or Northland. Your regional population is, say, thirty thousand people and you are faced with a bill of $100 million dollars to restore, repair and then bring your power systems up to the regulated standards of reliability and availability.
The cost to do this is $3,333 per head of population or roughly $10,000 per household.
Next, you are a water company in the same region whose filtration, pump and pipe infrastructure is also in poor shape. Water infrastructure funding is not my bulwark but it’s fair to say that $50 million would go some way to solving the problem in this example.
That’s another $1,666 per head or roughly $5,000 per household.
Crisis will rewrite the future
The problem will only get worse over time if the climate scientists and weather forecasters are to be believed. Just fixing the damage today might not solve the problem tomorrow.
Any city or town in New Zealand could find themselves staring down the barrel of rates increases, electricity lines charge increases and in many cases increases in water rates at a time where employment and economic growth are by no means guaranteed.
In the meantime the power goes out, the drains leak and our drinking water quality is questionable, while all the time our elected politicians local and central fiddle while Rome drowns.
Cyclone Gabriel is conservatively estimated to have cost the country $13 billion in repair costs alone.
If, as I believe, we can expect more and worsening climate destruction, we will have to build in some resilience to our infrastructure networks – and fast.
*Part two of this series addresses the after effects of Cyclone Gabrielle and will look at the options for more available and reliable power for businesses and the rural economy.
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Energy consumers prepare for the winter of discontent!
Shop around early for new energy contracts is our advice to customers seeking to avoid the risk of skyrocketing energy prices this winter.
Our warning comes hot on the heels of Transpower cautioning that the Electricity Authority’s recommended measures to ensure the security of electricity supply for this coming winter are insufficient, and that urgent action is now needed to prepare for winter demand.
The Gas Industry Company is also ringing the alarm bells saying, “To avoid the situation where some customers are coming to market at times of tightness across the energy sector, we advise industrial and commercial gas customers with upcoming contract renewal to ‘go to market’ for supply well in advance of the contract expiring. It is our view that going to market early will reduce the exposure risk associated with low hydro inflows impacting on gas supply in Q2, 2023.”
Decreasing generation, rising prices
So how and why has this situation arisen? Well, it’s been a long time in the making with NZ’s operational generation capacity reducing since 2010, as thermal base load generators have closed and not been replaced.
New generation that has come on stream since 2010 is mostly intermittent wind generation that is reliant upon the caprice of mother nature. Consider the fact that on an annual basis, NZ wind farms generate at an average of 40% capacity – meaning replacing baseload thermal capacity with like for like wind capacity results in an average 60% shortfall.
The early bird catches the worm…
With all indications pointing towards winter shortage and increasing price volatility, we encourage our clients to review the market well in advance of energy contracts expiring. This allows time to shop around and find the very best deals for your business while you still have some room to manoeuvre.
Leaving it to the last minute will likely leave your business exposed to the vagaries of the winter market and the possibility of surging prices. You could be forced to accept increasingly unfavourable energy contracts that end up costing your business dearly.
The below tables show how prices have surged over just the last month:
Light at the end of the tunnel?
While the current picture of the energy market seems fairly bleak, there is perhaps some room for optimism with signs pointing to new generation in the pipeline – albeit slowly.
News from Transpower is that NZ could bring on more than 7230 megawatts of new grid-connected generation capacity if the top 51 projects in its new Connections Management Framework are commissioned. Six projects totalling 595MW are currently in delivery phase with 22 projects under investigation.
A Transpower spokesperson says that the new framework, which went live in November, was developed in response to the sharp increase in grid connection enquiries during the 2021/22 financial year. They say enquiries to connect new generation projects to the grid have increased from around five per year, to 124 in FY22.
The new framework has been encouragingly described by Helios Managing Director Jeff Schlichting as ‘robust’ and he believes it should work well to ensure the timely development of renewable energy projects needed to help the country decarbonise and meet its climate change commitments.
Here’s hoping that Jeff’s got it right and that things are finally starting to move in the right direction. In the meantime it pays to prepare early and hunker down for the winter of energy discontent.
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Solar alchemy: making it, mixing it & turning it into liquid gold
As energy prices continue to surge and volatility reigns in the market, could now be the time for your business to bask in the cosmic power of solar?
Take a moment to factor in the potential cost savings, reputational benefits of clean energy, and the carbon savings your business can achieve – and it’s definitely worth taking a look. Or maybe even a second look if you haven’t considered it for a while.
Solar landscape changing
Total Utilities Director Chris Hargreaves said, “The landscape of how a company can integrate solar is changing and there are more options becoming available.
“While we continue to provide solar audits, and can design and install fully customised solar power systems, as well as advise on how to quantify carbon savings – we’ve also developed a hybrid solar option for our clients. This solution is a power procurement option that incorporates buying solar direct from a solar farm.”
Hybrid solar solution
NZ’s first solar farms aren’t expected to start connecting to the grid until somewhere between August or September this year, but Total Utilities’ hybrid plans enable clients to buy direct from a solar farm now using a power purchase agreement. This can then be combined with supply from their traditional energy retailer.
The solar gets supplied to the retailer, for example Mercury or Genesis, who can package it all up together and bill a hybrid price. Using this procurement solution, Total Utilities creates significant cost and carbon savings for our clients.
As Chris explained, “Some of the ten year prices we’re getting from solar generators are 11 cents a kilowatt. When you compare that to what power suppliers are delivering during peak periods – some months it’s close to 30 cents per kilowatt. So you can achieve quite a decent amount of savings with these hybrid plans.”
To simplify things, let’s take a look at three basic models of power procurement:
Here’s the traditional – vanilla if you like – method of power procurement direct from a power supplier AKA Meridian, Mercury et al. 
This second model enables you to use your own generated rooftop solar topped up with power purchased from your power company in order to meet your total power demand.
The third, hybrid option means us arranging contracts where clients buy solar direct from solar farms to use in combination with your supplied electricity. 
“The beauty of buying solar as a commodity is that even if you relocate your business site, you can still keep buying solar as it’s not tied to your location,” said Chris.
“So buying solar from a farm will be particularly attractive for customers who lease their premises or are likely to move – or for those who just don’t have a particularly feasible site.”
An array of solar services!
Total Utilities also provides solar feasibility audits to help identify whether actually installing solar power could be a good option for you. Our recommendations include a detailed analysis of cost benefits of solar versus implementation costs.
Chris explained that installing a solar array can lead to up to 25 to 40% reduction in energy usage, which results in reduced carbon liability from grid supplied energy. Then there’s the savings of 10 to 30% on total electricity cost – although this varies depending on how much energy is used at night and what the energy costs are for the given site.
This is a big saving when you consider that electricity is likely to be one of the top three expenses a business faces.
Boom time for solar
It appears that after some delay, the solar boom is finally on its way in New Zealand – following in the footsteps of other countries like Australia, where solar has almost 30% market share, and the US, which is aiming to generate 50% of its energy from solar by 2050.
Whether you’re making it or mixing it – solar is shaping up to be the way of the future to save carbon, money and the planet.
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Bring on the bots with new recruit Gary!
Who needs Santa’s Little Helpers when we have Christmas new recruit Gary Gonsalves, and his Robotic Process Automation (RPA) army?
Gary joined the Total Utilities team this month as Energy & Business Improvement Manager. He will be implementing RPA to speed up business processes and improve customer experience.
Gary is no stranger to Total Utilities, having already worked in a consultant capacity over the past three years. His new, permanent role will see him exploring key areas where RPA can be implemented to take the business to the next level.
Total Utilities has already integrated bot technology under Gary’s stewardship, and RPA has enabled us to cut manual tasks such as data entry and repetitive work. Automation frees up staff to focus on important tasks, so that we can increase productivity and make ourselves more readily available to customers.
Key benefits of Gary’s work to date include enabling the business to process data more quickly, accurately and efficiently – resulting in a streamlined energy procurement process.
Gary explained his decision to move into a permanent role with Total Utilities was easy given his experience of working with the management team: “I was immediately struck by the integrity of people like Jonathan and Chris and the way they conducted themselves and ran the business,” he said.
“They were not afraid to experiment with new technology and explore future developments. That was attractive to me.”
Next steps for Gary will include exploring other key areas where RPA can be implemented to make things easier for our customers, whilst also enhancing employee experience. He will also be looking at the bigger picture to see how we can centralise tasks and further improve business processes.
Outside of work, Gary is a keen gym bunny and hits the treadmill at ridiculous o’clock in the morning! He is always on the go and loves exploring new activities with his seven year-old son and wife.
Please join us in welcoming Gary to the team.
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Welcome Jonathan, The Data Wrangler
Meet Jonathan Stewart, our newly recruited Data Wrangler, who will be wrestling our raw data into ‘practically perfect’ order, and enabling us to create vital energy insights.
Jonathan joined the Total Utilities team last month and comes from a market research background, with some 20 + years of experience in the field.
His previous role as a Database Specialist involved creating online reports and dashboards, restructuring data and generating market research databases – skills that will all be highly transferable to his role with Total Utilities.
Jonathan will be assisting the team to ensure that all data is reliable, accurate and of the highest quality.
When asked what attracted him to working for Total Utilities, Jonathan said the deciding factor was our strong focus on assisting customers with sustainable energy and decarbonisation solutions.
With research showing that more and more people are choosing to work for companies that make sustainability and the environment a priority – Jonathan is a living, breathing example of this!
Jonathan brings a background in data, attention to detail, and a willingness to learn to his new role. “I’ve only been with Total Utilities for a couple of weeks, so I can’t say I have a typical day just yet. I’m mostly in the learning stage at the moment,” he said. He is motivated by a strong desire to do a good and thorough job.
When it comes to home life, Jonathan is keen to enjoy every moment with his family and friends. He is also a keen music fan with a costly interest in collecting limited edition vinyl – the rarer the better!
Jonathan is also a keen baker, so here’s hoping the team will get to enjoy some of his tasty treats… if he has any time between wrangling data!
Welcome to the team Jonathan!
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