7 Feb 2014

Electricity sector has 'done very well'

7:02 am on 7 February 2014

The former chief executive of the national power grid says that the electricity sector is performing pretty well, but there is an issue with prices.

Patrick Strange stepped down as the head of Transpower on Sunday and has returned to the board of Mighty River Power as an independent director.

He says there's a lot of efficiency and innovation in the industry in this country.

Mr Strange says there is an issue around electricity prices and particularly how electricity should be charged for people on low incomes, but that's a decision for the politicians.

He says in the last 10 - 12 years in terms of what the industry has done, it's done very well.

Mr Strange says the industry manages water much better than it used to and there have not been the dry years that used to occur. He says New Zealand has also avoided major overspends in that period.

Mr Strange says around the world demand for electricity has flattened for the moment and it will probably stay flat or even decrease.

He says in New Zealand a large part of that is because manufacturing is moving offshore and often going to China and the days of running high intensive electricity using businesses are probably gone in an economy such as New Zealand's.

Mr Strange says there is also more energy efficiency.

He says the real challenge for the electricity industry is the uncertainty and if the industry is wrong there could be quite high growth in demand which may occur quickly, with electric cars for example.