The New Zealand government said in March that it is considering making major changes to its electricity market, because a lack of rain and faltering investment in new generation projects is causing fears of power shortages to grow.
New Zealand is largely dependent on hydroelectric power. The government says about 150 megawatts of extra generating capacity will need to be added each year to meet rising demand and ensure an adequate reserve capacity to protect against years when there is low rainfall.
The country faced its last serious power shortage in 2001, when a dry winter cut availability, caused spot prices to rise sharply and led the government to call for a voluntary 10% reduction in electricity use.
Prime minister Clark said: “We know from the 2001 experience that it is possible to manage through dry years, but for the long term it is not really satisfactory to have dry years throw New Zealand power security as much as they now appear to do.”
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