The iron law of electricity

My Insights #2 this week:

Events have rather overtaken last week’s blackout. The outage on the evening of 9 August left 35,000 households in the dark for up to two hours on the coldest night of the year.

This week we published a paper on the blackout by Carl Hansen, the former Chief Executive of the Electricity Authority from 2010 to 2018.

Hansen’s paper is full of insights. He steps through the blackout to identify the crucial moment which led to the outage. He explains how the electricity system deals with shortages. And he shows who is responsible for what, when outages occur.

Hansen’s main message is that officials at the Electricity Authority must be allowed to do their job and investigate the outage. The facts must be established before any response from the government.

The blackout was a stern reminder of electricity’s iron law: the lights must stay on.

This law is one reason why most government interventions in electricity end up doing the opposite of what was intended.

Take the offshore oil and gas exploration ban, for example. That might seem like a good way to reduce emissions, including from electricity generation. Until the next dry year, that is, when we find ourselves importing coal with twice the emissions per kilowatt of gas to keep the lights on.

Last week’s blackout was probably not the direct result of any government policy. But policies like 100% renewable electricity and the gas exploration ban will eventually lead to more blackouts.

In 2019, the government’s Interim Climate Change Committee estimated 100% renewables could produce 100 times more blackouts than business as usual. The policy will also raise power prices and effectively increase emissions.

The government responded to this devastating critique from its own experts the only way it could. It brought forward the start date for 100% renewables from 2035 to 2030.

Despite the blackout, New Zealand has a world-class electricity system. It is more green and more affordable than most other systems, and about as reliable.

Blackouts are shocking because they have become so rare, a remarkable feat for a system which requires supply and demand to balance every second of every day. In an isolated country which cannot import electricity from across the border to secure supply. In a system which is more than 80% renewable.

Our electricity system almost defies gravity, it is so good. Which makes last week’s blackout a momentary wobble on a magic carpet. Tread carefully, Minister.

You can read Carl Hansen’s paper here. You can also sign up for our weekly Insights newsletter here.

Kiwi Olympics

My article in this week’s Insights newsletter. It is a #3, the third item in the newsletter which is always an attempt at humour. You can sign up to our weekly newsletter here.

Dear International Olympic Committee,

Please find attached our bid to host the 2036 Olympics Games in Wellington.

We noticed that at US$25 billion, Tokyo Olympics are the most expensive Games ever. That is a lot of sheep meat, as they say.

So forget unity and aspiration. The theme of the 2036 Olympic Games in Wellington will be fiscal responsibility.

Needless to say, our economic advisers are very excited about this theme. They have calculated that a fiscally responsible Games in 2036 will be “extremely efficient,” which means “wildly popular.”

Here is how we will cut costs.

First, we will run the 100 metres dash over 80 metres. To compensate, we will either make the track uphill or athletes will do the last bit twice. They won’t mind.

Instead of gold, silver and bronze medals, the medals will be tin, aluminium and tin with manure. We will make the ribbon out of number 8 wire because cliches are very cheap.

We think Tokyo was onto something by not letting anybody apart from athletes into the venues. We will save even more money by not having venues. We will broadcast everything via web cams. Spectators can watch on Youtube. Think of the emissions!

We also propose to remove two rings from the Olympics logo to save money on signage.

And no Games village. The athletes will be billeted.

As for mottos for the 2036 Games, we have some ideas. They include “Cheap as chips” and “Sweet as.” But we are leaning towards “Chur!” mainly because it has the fewest letters.

We are not going to lie to you. Hosting the Olympics in Wellington has risks.

For example, we cannot be sure the pool will have water or that you will be able to see the bottom. And let’s just say the water might have… obstacles. Does the term “Code Brown” mean anything to you?

The boat races will start in Wellington harbour. We just don’t know where they will finish. Depending on the wind, it could be Auckland, Christchurch or Chile.

Martial arts and shooting competitors will have dedicated facility thanks to a generous offer from the friendly team at the Mongrel Mob.

To commemorate the Wellington Olympics, the entire city will be declared heritage after the Games. Whichever parts were not already heritage, that is.

Finally, we promise to start the 2036 Games on time. Unless MIQ is still a thing in 2036 in which case all bets are off.

Yours etc.