The Price Of Power CAN DEMANDS FOR CAPITAL EXPENDITURE BE REDUCED?

Press, Volume CIV, Issue 30897, 2 November 1965, Page 18

The Price Of Power CAN DEMANDS FOR CAPITAL EXPENDITURE BE REDUCED?

IB V

ARTHUR LUSH)

We are faced with a demand for £1 million a week for the next 10 years to pay for more power stations to cope with growing demand for electricity and much higher peak loads. Part of this huge expense is avoidable. The New Zealand Electricity Department charges power boards on the basis of peak loads. The power boards charge consumers for units of electricity. Neither the department nor the power boards have any inducement to ease the demand on the public, provided that we can keep on paying for still more power stations. Power boards are not allowed to put in their own auxiliary plants to cut down their peak loads; consumers are not allowed to put in their own small plants to reduce the number of units they must buy. Arbitration could help here.

It is nobody’s business to advise the public how to avoid the wastage of electricity which goes on in the average house. The State Advances Corporation gives no special concession to people who spend extra money on good construction designed to reduce waste of electricity. If we did something practical about these problems we might save many millions of pounds. The use of Kapuni gas offers additional saving.

We have been taken by surprise because the increase in demand for electricity has jumped ahead of all our expectations. The Power Planning Committee, seeing the forthcoming growth of population and industries, such as the steel industry, and television, produced a new estimate for the next 10 years for works costing £483.3 million. This is almost as much as the World Bank is lending to under-developed countries during a whole year, and is about half as much as our present National Debt. Since then, still more works are expected to be necessary to avoid earlier power shortages. Now, fortunately, the use of Kapuni gas should reduce this huge growth of electrical demand. Even so, Mr Shand, the Minister for Electricity, has estimated an expenditure of £5O million a year to begin with. Users Will Pay How is this to be paid for? Eventually the cost will be spread over all users of electricity. The • method is that loans are raised to pay for developments and the Electricity Department (being self-sup-porting) must pay interest on these loans, as well as sinking fund, working expenses and income tax on its profits. It sells power to Power Boards who are charged for maximum demand. They retail the power at so much per unit. Thus Power Boards dislike peak loads but the Electricity Department makes money out of them.

Television viewers have greatly increased peak loads. On cold evenings extra electric heaters add up to an enormous load, electric jugs are switched on simultaneously too. This extra load would cause a peak that would load up a large power station. This difficulty could be met by use of a maximum demand indicator that would make lights flicker when it was time to switch something off. Instead of suggesting such economy the Power Planning Committee produces a panic programme for still more power stations which we must pay for. The Electricity Department is no better. You might

as well expect a cigarette manufacturer to tell you to reduce smoking. Kapuni Gas We should consider what could be done to keep this enormous expenditure within bounds. The wide use of Kapuni gas offers one method of slowing down the demand for electricity. It should be possible for a gas-burning attachment to be added to existing hot-water systems, leaving the electric heating and thermostat to even up the temperature. Besides this, great economies should be possible if the advice of inspectors were available to point out losses of heat and ways of preventing them. Considerable heat losses are often curable. Gas appliances for heating and cooking will be helpful. This leads at once to the problem of taking Kapuni gas to the consumer. Kapuni gas is largely methane which can be readily cooled and liquefied. Great quantities of liquified methane, derived from wells in the Sahara, are now shipped in tankers to Britain. The liquid methane is then stored in underground reservoirs and thence distributed by gas undertakings. In New Zealand liquid natural gas could readily be shipped from New Plymouth to all New Zealand ports that could accommodate tankers and store the gas. P. A. Toynbee, in his address to the Economic Society of Australia and New Zealand in September, 1964, (reprinted in New Zealand Electrical Journal, November, 1964) says “Liquid natural gas can be transported round the country in barges and by road and rail, to all urban areas, and the re-evaporated gas could be sold at a half to two-thirds of the price of present-day gas.” The main advantage of an l.n.g. scheme is that it is economic immediately.” Expensive pipelines are not required until growth of load justifies them without subsidy. Mr Toynbee strongly opposes the use of gas turbines to generate electricity as three-quarters of the heat of the gas would thus be wasted. Waste in Houses Much electricity is used in heating houses, but unfortunately our houses compare most unfavourably with houses built in really cold climates as regards retaining heat. Ordinary glass windows lose much heat, and people accustomed to double-glazing can give you convincing accounts of its benefit in keeping a house warm. When a room is warmed it should not take much heat to keep it warm. If you had a yacht leaking so badly that it would sink at its moorings in an hour if the pump were stopped, you would think you had a very poor job and

something should be done about it If you have a house that lets all the heat leak out within an hour of your turning off the heaters. I think you have a poor job there too. The advantages of heat insulation for roof, ceiling, floors and walls should be realised, and ad vic' should be available about improving old houses; new houses should be models of heat economy. Are State-built houses going to lead the way? At present State Advances take no account of economy of design in the use of heat and in types of heating, whether wasteful or economical. Preferential terms for loans on designs which avoid heat waste as far as possible could do much to encourage a thoughtful attitude to this matter. Minor Hydro Schemes From Mr Richard Seddon’s days onwards many proposed developments of water power have been rejected and some working ones dismantled, because of State monopoly rights. Most of New Zealand has a considerable rainfall and much of the country is hilly or mountainous. Water power is plentiful. In the North Island there is no major power development from Wellington north to Waikaremoana or west of the Waikato river though power development is proposed on the Wanganui river. There must be many schemes still untouched. The Electricity Department, established long since, no longer needs protection against small competitors. Licences should be freely available to land owners, companies. Power Boards and the Electricity Department itself, all dealt with on the same basis. Licences should be granted, when justified, by a judical committee or a qualified judge. Representatives of the applicants and of interested individuals or organisations, including the Nature Conservation Council, the Royal Society and others should be entitled to give evidence for or against any application. This should end the system whereby a State Department can be the judge of its own case.

The Electricity Department already has the advantage of large developments, but good sites for small developments near to where the power would be used can also be economical, and their development should be encouraged. Licence fees should be abolished where the Government has done nothing to earn them and gives no services in return.

These various changes and reforms should make it possible to reduce considerably that demand for £1 million a week of our hard-earned money.