Shane Jones signals NZ First may break ranks with National on energy policy

Tuesday, 11 February 2025

NZ First deputy leader Shane Jones says party will show fidelity to coalition agreement but will go ‘full on political’ on energy next year if review doesn’t deliver.

NZ First deputy leader Shane Jones has signalled the party may break ranks with the Government and endorse a major overhaul of the electricity market ahead of the next election.

At a fiery breakfast for industry leaders hosted by Energy Resources Aotearoa, Jones said he did not believe the country’s energy settings were sustainable.

Jones said that, historically, energy had been a competitive advantage for the country.

But after the energy crunch last winter that saw factories cut back production and close, he told the gathered industry leaders that he had “zero confidence that the industry is going to solve this problem”.

Jones said the rubber would hit the road on Friday, when he expected Oji Fibre Solutions to confirm the closure of its paper-making plant in Tokoroa.

“I don't care what the spin masters from the gentailers are saying. I love arguing with you guys, but my mind is already made up. You’ll learn more about it next year,” he said.

The Government has ordered a review of the electricity market and new Energy Minister Simon Watts, who also spoke at the industry breakfast, said it would soon name international experts who would carry out that work.

Watts also had stern words for the sector, warning it “needed to deliver abundant energy at internationally competitive prices”, but provided no other fresh information on the Goverment’s work programme, such as on its plan to facilitate the importation of liquified natural gas.

“Just like our lake levels, the trust in the electricity market has reached record lows. This Government is playing its part to unshackle the energy sector and the energy sector now must deliver,” he said.

Energy Minister Simon Watts says the Government’s electricity market review will be led by international experts.

That meant ensuring sufficient new generation was built in the next few years “especially from thermal and flexible sources” to ensure there was sufficient generation over periods where capacity was constrained, he said.

Jones promised NZ First would await the outcome of the electricity review, saying he hoped and prayed it would enable the Government to point to tangible interventions that created “an abundance of energy”.

“Both Winston Peters and I are ‘Westminster’ parliamentarians. You sign up with the Prime Minister and do a deal; you stick by that deal,” he said.

“But if we don't get from these reviews what suits my leader and I, then fine, we're going ‘full on political’ next year when we get to the election,” he said.

Jones later told The Post that if the outcome of the review was only a repetition of the past, “substantial energy restructuring” would be the first item NZ First proposed if it was blessed with having power in a future government.

“It will be the first item Winston brings forward,” he said.

A single-buyer model designed by former Labour Party energy spokesperson David Parker that Labour took to the election in 2014 was one of “half a dozen” ideas NZ First could consider, he said.

Power companies have increased investment in new generation, but BusinessNZ’s Energy Council head Tina Schirr acknowledged it had been a case of playing “catch-up”.

That would see the Government establish a centralised buyer for electricity in a return to a partially planned electricity market.

“We've spoken to the Americans, we've spoken to the Californians, we've spoken to the Aussies,” Jones said. “The party is going to bring forward various options at our party conference.”

Bridget Abernethy, chief executive of the Electricity Retailers Association, which represents the major gentailers, said Jones had expressed “consistent views”

“Our view is that consumers will benefit from more construction of generation. Our members remain focused on delivering the billions of dollars of investment in new renewable generation needed for a secure energy future,” she said in a brief statement.

Tina Schirr, head of BusinessNZ’s Energy Council, did not believe the ministers’ comments would have surprised electricity industry leaders.

“They’ve heard this before,” she said.

Schirr said she was confident the pipeline of new generation being built would be sufficient to allay politicians’ concerns.

Power firms had “been working really hard, and I've seen changes happening”, she said.

“They're not going to come through overnight; that's the nature of infrastructure being built. But you will see that change,” she said.