Stories written by these two appear today in the New Zealand Herald, this country's largest daily newspaper; with the energy minister essentially saying all will be well, while Leyland claims a large increase in coal use and power prices will be necessary to ward off winter electricity crises.

Hodgson says the availability of another 150MW of new production capacity each year will be enough sufficient to meet demand and maintain an adequate dry-year reserve. "That's a little over a third of a Clyde dam, and well within the industry's capability." He adds that between 1996 and 1999 over 1250 megawatts of new capacity came onstream, an average of about 300MW a year.

Modelling by his government-owned Transpower, the national grid operator, suggests that by about 2005 the current system might have difficulty meeting demand in a seriously dry year, assuming high growth in demand and no new generation capacity. Forecasts by Leyland and Canterbury University's Centre for Advanced Engineering were more pessimistic, suggesting problems sooner.

"Both will be inaccurate, like all forecasting: the truth may lie somewhere in the middle, but it will be changing," crows Hodgson.

The Minister says he has been taking expert advice on the electricity supply-demand models "and I am satisfied there is no cause for high anxiety".

Hodgson says announced plans for new generation include the 400MW Genesis Power combined-cycle plant at Huntly, Contact Energy's proposed Otahuhu C gas-fired plant (which Contact actually put on hold earlier this year because of uncertain future gas supplies), Meridian Energy's 600MW Project Aqua hydro system along the lower Waitaki River and a 39MW upgrade to the Mokai geothermal station.

He adds that officials have gathered confidential information on serious investigations and planning for over 2000MW of additional capacity over the next decade, and says there will be still more proposals, such as industrial co-generation plans and small distributed-generation developments.

"Not all this planned capacity will be built, because not all of it is needed. But a reasonable assessment is that the industry is unlikely to fall short of building new capacity at the level required," Hodgson says.

The minister concludes that New Zealand has been "spoilt" by Maui and that the field's likely depletion by 2007 marks "a new era" for New Zealand's energy sector, "not a crisis".

As Maui tails off, smaller gas fields will become economic and New Zealand will revert to a more typical supply situation in which gas is drawn from a larger number of fields, with known gas reserves only stretching forward a decade or so instead of 30 years.

Leyland says he is delighted the government has now realised that electricity supply is too important to be left to the vagaries of the market and that it will commission more detailed modelling of electricity supply and demand.

However, he warns that no major new generation is likely to be commissioned until 2006 (the expected commissioning date of the Genesis 400MW Huntly plant) when demand will have increased by about 500MW. By then Maui gas would be declining rapidly and unable to provide any additional gas in dry years.

"In dry years from now on, we will have to burn more coal and oil or reduce our demand substantially. The amount of demand reduction needed would make the 1992 shortage, which cost the economy $500 million, look like a picnic," Leyland adds.

Further developing New Zealand's prime renewable resources - geothermal and hydro power - together with some wind farms and co-generation stations, could eliminate the need to burn large amounts of coal in a normal year; though it would not eliminate the need to burn coal or oil to make up for the hydro shortfall (about 20% of demand) during any critical dry winters.

To reduce consumer demand by 20% would mean a huge increase in power prices, forcing many productive industries to reduce output.

"There is a real risk of power shortages in any dry year from now on," Leyland concludes.