“Comparing the two sets of official projections, the current inability of fossil gas to meet supply will balloon. In five years, production will be just 63% of demand. In a decade, it will be just 43%. That will mean skyrocketing prices for families, businesses, industry, and electricity generators. The families least able to pay will be forced to go without, even if they have no alternative heating. It will force more gas-dependent industries to cease production, costing jobs and export revenue. Because gas generation sets the cost of electricity, it will mean higher power prices for homes and businesses.

“New gas discoveries will not plug the shortfall. The existing fields are producing less than expected despite billions in investment. Offshore exploration prior to the ban was drying up due to lack of finds. If new exploration is undertaken and if new discoveries are made, it will be at least a decade until they are producing at scale, which likely still wouldn’t be enough. Importing fossil gas would require billions of investment in infrastructure, increase emissions, and expose New Zealand to international price shocks. At current international prices, buying gas from overseas to make up the domestic supply shortfall would cost $11b-$14b by 2035.

“The Government needs to act now through the new Emissions Reduction Plan to reduce demand and ensure that Kiwis are not left in the cold as the shortage worsens. Space and water heating in buildings is a significant consumer of fossil gas that can be readily replaced with electric heating. Capital cost is the only barrier, which the Government can alleviate through boosting the Warmer Kiwi Homes programme and restoring GIDI funding.

“Improving building insulation will reduce demand for heating and reduce peak electricity demand, which is often met with fossil gas plants. Residential solar energy can be encouraged to replace the need for fossil gas generation. The Government needs to urgently introduce new measures to incentivise both insulation and solar power.

“Acting quickly to replace fossil gas with electricity for heating, reduce the need for heating and peak power demand with insulation, and boosting solar electricity generation will mean what fossil gas is left can be used in industries where it is essential.

“Doing nothing and hoping for more fossil gas to be found is not a responsible strategy; acting now to reduce the need for fossil gas is the answer,” says Mr Eagles.