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"My message is to not wait it out – instead, grab the opportunity to get ahead. In the long term, unless we hit another Maui, which is unlikely and would take decades to bring online, the era of cheap, abundant gas is over. Business leaders need to start planning now." That's EECA's chief executive Marcos Pelenur writing in the Herald about businesses struggling with rising gas prices and faster than expected declines in gas reserves.
The focus has primarily been on big users, which may have teams dedicated to energy. But what about the small and medium businesses dealing with these issues? EECA commissioned research to find out how they were feeling and it confirmed what it had been hearing in the market: they felt stuck.
"Respondents reported facing doubling gas costs as contracts come up for renewal, and uncertainty about absorbing the extra cost or committing to expensive new energy systems – even though alternatives are becoming increasingly proven and available. One called any guess about future supply and pricing 'a stab in the dark'. High costs, uncertain payback and substantial existing debt were other reasons cited as holding businesses back."
While Pelenur says there are bill savings of 10-30% available now by focusing on efficiency measures for existing gas systems, like tuning boilers and fixing valves, electrification is the efficiency we've always been looking for.
Electric machines use much less energy than fossil fuel machines to do similar jobs - with much lower emissions - and, while not every business has a viable electric alternative right now, many do.
To some degree, this is what’s often called ‘creative destruction’, like streaming services replacing DVDs or smartphones impacting film cameras. Businesses that invest in new technology tend to prosper and improve their productivity (and the country's productivity), while others that are too slow to invest tend to fall over.
In the case of gas, the Government plays an important role, both in terms of managing the transition away from an increasingly scarce and expensive resource, and also helping out with grants or access to finance so that businesses are able to get over the barrier of upfront costs, something the current Government has done less of in recent years.
Rainbow Nursery's Andrew Tayler is glad the company got a grant when they were still available and they used it to heklp fund a $2 million project that connected 32 heat pumps to two massive water tanks.
Down south, Preens also got some assistance and installed a 2MW electric boiler that provides the majority of process heat for their operations. With New Zealand's highly renewable electricity grid, managing director Rick Wellington said it was one of the world’s lowest-emission commercial laundries and while electricity prices have also been rising, it is looking at adding solar so they can generate as much of their own cheap energy as possible.
As we electrify our economy, this is the kind of tech we need our businesses to be investing in.
"My message is to not wait it out – instead, grab the opportunity to get ahead. In the long term, unless we hit another Maui, which is unlikely and would take decades to bring online, the era of cheap, abundant gas is over. Business leaders need to start planning now." That's EECA's chief executive Marcos Pelenur writing in the Herald about businesses struggling with rising gas prices and faster than expected declines in gas reserves.
Read moreDownloadTalk about driving change!ETrucks' Ross Linton is at the forefront of New Zealand's nascent electric trucking scene and can claim responsibility for a number of firsts, from the country's first electric concrete truck to the country's first battery swap set up. Since he brought his first electric truck in to the country back in 2018, the technology has advanced massively and driving on electrons has become quite a bit cheaper than diesel and, not surprisingly, that's inspiring a great deal of interest among businesses.
Read moreDownloadHow the sun led to higher salaries for teachers in the US and why this should be happening here, too; how "the once-rigid link between economic growth and carbon emissions is breaking across the vast majority of the world" as electrification gives more countries a productivity boost (and how that would allow New Zealand to keep embracing our long, languid summer break); solar continues to weather storms and provide 'free resilience'; Dunedin laundry company Preens goes electric and saves over 300 utes worth of emissions; the company that wants you to drink diesel exhaust; and a wonderful rundown of the Kill Bills tour - and the national electrification opportunity - from one of the tour sponsors.
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