The New Zealand government has called for an immediate 10 per cent cut in power use across the country as the national electricity system faces blackouts. The problems have been caused by an abnormally dry winter that has crippled the country’s hydro industry, resulting in a sharp rise in the price of wholesale power.

In the light of on current weather patterns, the energy minister has forecast a moderate risk of power cuts in September and October.

Hydropower accounts for 60 per cent of New Zealand’s generating capacity. The dry winter has pushed wholesale power prices to five times the level of twelve months ago.

Two reservoirs hold 60 per cent of the storage capacity for hydro generation in New Zealand, and these are only about 40 per cent full. Total reservoir storage is 45 per cent down. Large electricity users such as Comalco aluminium – which uses 15 per cent of New Zealand’s power – have cut production to minimise costs.

Another result of the high cost of power has been to force the Natural Gas Corp to sell its 290 000 power customers to the state-owned Genesis Power. The company announced the move after being forced to buy high-priced power on the spot market.

New Zealand was last hit by a severe drought in 1992. This led to power rationing and industrial shutdowns and was estimated to have cut economic growth that year by half a percentage point.