A recent EECA (Energy Efficiency and Conservation Authority) commissioned report by Verian found gas supply uncertainty and connected costs are a huge concern for business owners and industry associations in the most exposed sectors.
EECA Group Manager Delivery and Partnerships Richard Briggs says, “There’s no doubt businesses are feeling the pressure – especially our small and medium businesses which are vital to New Zealand.
“Many don’t have energy managers or the kinds of support bigger organisations rely on, which means they’re more exposed when costs rise or things get complicated. So it was important to us to dig into some of the challenges we have been hearing across New Zealand’s regions.
“While it can seem like there are no options, newer technologies and targeted support are opening viable pathways away from gas – that also increase resilience and longer-term affordability.”
Respondents reported facing doubling gas costs as contracts come up for renewal, and uncertainty about absorbing the extra cost or commit to expensive new energy systems – even with alternatives becoming increasingly proven and available.
“Businesses are seeing the price for piped natural gas going from 7 - 9 c/kwh to 13 -17 c/kwh, meaning a business that was spending $20k p.a. is now paying $37k p.a. and the numbers get bigger from there,” said Briggs.
One respondent told EECA their view was there was no point investing because they didn’t know what to invest in, or when. Another struggled with the idea of turning off valuable assets and investing around two and a half million dollars in new equipment just to keep the business going.
“The research confirmed what we had gathered from our engagement with business – they’re not seeing a way through,” said Briggs.
“The Government, through EECA, is here to help with actions that can be taken now, while planning for the next few years, to alleviate costs and get ready for new fuel or technology options.”
EECA has a suite of options for businesses, particularly piped natural gas users, to support them. Richard Briggs says, “EECA is always energy efficiency first – and most businesses will probably find they could save 10-30% on their gas almost immediately with simple, low-cost efficiencies.”
“We’re also here for the big decisions – our energy audits and feasibility studies will give businesses with significant gas spends the confidence to invest and help to find financing to do so. We’d encourage gas-using business spending $10,000 or more a year to get in touch, to help get unstuck,” said Briggs.
“Every business is different, with unique challenges across the regions. We'll continue working with businesses to ensure we're providing timely, effective information and solutions as they navigate ongoing energy uncertainty.”
Read the report: Business responses to gas market uncertainty
Additional information
Walk-through energy assessments for gas users
Co-funding for feasibility studies and business cases