Latest news with #PanPac
NZ Herald
4 days ago
- Business
- NZ Herald
Industrial users demand electricity market reform amid rising prices
Bridget Abernethy, the chief executive of the Electricity Retailers and Generators Association, argues that major disruption to the electricity market structure is the 'last thing we [New Zealand] can afford' As a major energy user and economic contributor, we would argue the opposite – New Zealand cannot afford the status quo to continue. Taking a 'we'll be right' attitude to nine years of price increases for wholesale users has had negative impacts for all consumers. Citing a 'decade of flat electricity prices' for household consumers, Abernethy notes a short-term period of marginal increases is inevitable. What is missing from this statement is that electricity costs have been anything but flat for wholesale users, with spot prices increasing 3.5 times in nine years. (Index graph– Averaged Spot Market Real Time Pricing with forecast to April 2026). How can this disparity between retail and wholesale pricing occur in a properly functioning market? Could it be because residential consumers would demand earlier political intervention if their bills skyrocketed to the same degree as that of wholesale consumers? We accept that inter-year volatility will increase with the rise in intermittent renewables. However, it is not the main factor hurting large industrial users – it is this rising average price that cannot be insulated by hedging forward. Hedging contracts are now unaffordable for most large users because futures hedge prices are linked to the rising spot prices. The wealth transfer from large industrial users to generators over the past decade in the form of inflated prices has not resulted in investment into more net supply. The market has not created sufficient incentives to build new generation ahead of when it is needed. Pan Pac general manager Tony Clifford at the Whirinaki plant. Photo / Warren Buckland Instead, generators have sat on approved RMA (Resource Management Act) consents and continued to profit at the expense of business. We have seen the impact on manufacturers in regional areas no longer able to operate profitably. Residential consumers are then affected through loss of employment and services, while the economy and our communities suffer. Blaming the shortage of gas as a driver of rising prices is overstating its impact. Electricity generation from gas makes up less than 10% of all electricity generated. While prices would have increased because of gas shortages, we dispute the premium over the relationship to the gas costs. Independent analysis of generator margins shows at least $38/MWh of increases cannot be explained by gas or ETS (Emissions Trading Scheme) charge increases. In summary, the gas shortage should not be impacting the electricity pricing to the extent claimed. However, the shortage of gas has been used to justify many years of high profits for generators and large dividend payouts to shareholders (which include successive Governments). These profits have not been reinvested into new generation until the recent threat of market intervention. We are not blaming generators for maximising profit; they are working within the existing market rules that incentivise them to keep the market on the edge, but we do have an issue with them telling only a part of the story to regulators, politicians and the public, that they can do nothing about rising costs and that consumers just have to ride it out. Market regulators and successive Governments have seen this train wreck approaching from a long way off but have chosen to do little. Simply not making a bold decision is a decision in itself.
RNZ News
20-05-2025
- Business
- RNZ News
Napier port profits show recovery from Cyclone Gabrielle
A container ship at Napier Port. Photo: Supplied / Napier Port The port of Napier has had a strong profit rebound as the regional economy recovered from Cyclone Gabrielle lifting cargo volumes and revenue. Key numbers for the six months ended March compared with a year ago: The country's fourth biggest port benefited from the recovery of the broader regional economy from 2023's Cyclone Gabrielle, which disrupted horticulture, timber and wood products exports and damaged the port and transport links. Chief executive Todd Dawson said a return to regular and normal trading conditions, especially for key customers, was behind the profit lift. "The full resumption of Pan Pac's pulp and timber operations has driven a notable increase in dry export container volumes. Meanwhile, favourable growing conditions led to an earlier apple harvest, boosting refrigerated container throughput," Dawson said. The bottom line result was also boosted by a final insurance payment of $7.5 million. The gain in container volumes offset a fall in bulk cargo as fewer logs were exported, and revenue from cruise ships also fell as the number of visits decreased to 77 from 88, with 66 visits so far booked for the coming season. Dawson said the port's diverse cargo base along with tight control on costs allowed it to cope with the changing trading environment. "Demand for the region's food and fibre exports has been strong, and we expect to sustain healthy volume and earnings into the second half of the year." The company is forecasting a full year underlying profit of between $59m to $63m. Shareholders were rewarded with a special one-off dividend of 2.5 cents a share as it returned surplus cash arising from the final insurance payout. Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
NZ Herald
11-05-2025
- NZ Herald
Future of Napier-Wairoa train line still uncertain two years on from Cyclone Gabrielle
'KiwiRail has been working on a scoping study to understand the cost of line reinstatement ... or alternatively mothballing [it]. 'We expect to have discussions with the Government around the line by the middle of this year.' Mothballing a train line means officially closing it but keeping it in relatively good condition, so that it can been reinstated in future if required and funding is made available. Advocates have highlighted the benefits of reinstating the train line, which includes taking trucks off the troubled SH2 Napier-Wairoa Rd and reducing maintenance costs for that highway. However, the likes of major timber and pulp mill Pan Pac, one of Hawke's Bay's biggest employers, did not use the Napier to Wairoa train line to transport its logs when it was open. History of the line The train line used to run all the way from Napier to Gisborne but a storm closed that line in 2012. Later that year, the line was officially mothballed. In 2019, the Napier-Wairoa section (about half of the line) was reinstated following a $6.2 million investment. Services were suspended just a week after they began due to the Covid-19 pandemic, before log trains resumed in November 2020. Cyclone Gabrielle in 2023 then struck and damaged more than 400 sites on the 115km track. Meanwhile, the current rail network in Hawke's Bay features a railway line which starts at Woodville (near Palmerston North) – where it connects with other tracks – and heads north to Napier Port. The line then extends further north to Wairoa but that section is out of action.
