In 2014 Mighty River Power announced it would begin replacing 70% of its vehicles with pure electric vehicles and plug-in hybrids.
Last Thursday CEO Fraser Whineray dropped in to the Sustainable Business Network’s Leadership and Influencer course. He shared how and why Mighty River Power made the move.
When Fraser took on his role two years ago it was in the run up to the last election. The government had floated Mighty River Power the year before, triggering heightened scrutiny in the sector. He saw an opportunity to start a conversation about the extraordinary value of the energy supply system in New Zealand and its role as a vital differentiator for the country.
He says: “Everything on the other side of the plug in New Zealand is practically world leading. We have the third best reliability and the third best renewability in the world. We are an isolated nation with millions of people and at the last count we were about 80% renewable. In every other country they have to subsidise renewables to get them going. We have the 10th best pricing in the OECD.
“We have this three fuel juggernaut. Hydro, geothermal and wind. It’s a very short distance to the sea, it’s very windy. We have some of the best wind sites in the world. We have the plates which have hot stuff near the surface so you can tap large hot areas.”
Fraser says the challenge was to highlight the value of the business without just banging on the desk saying: ‘It’s a great system! You should be grateful!’
Taking charge with electric vehicles
The answer came when Fraser started looking into electric vehicles.
“When you are a business you like to grow,” he explains. “We realised there is this great opportunity that has been sitting there for the last century. New Zealand is a great place for renewable energy. We can get to energy freedom.”
Electric vehicles were the key.
“If liquid fuels stopped coming into the country I think there is only about two weeks of inventory. Energy freedom is a really strong place for the country to be in. It’s so hard to a make an export dollar and we are throwing them off the wharf to pay the oil tankers. It upsets the balance of payments. We could have jobs in the regions because renewable energy lives in the provinces. Other jobs might come and go, but you can’t shift the water, the wind and the geothermal.”
There was only one problem. It all seemed too easy.
“We worked out that using electricity from your home to power your car equates to 30c a litre. If you knock the 60c you pay in tax on a $2 litre of petrol you have got 30c vs $1.40. You don’t have to go to the petrol station, there are no tail pipe emissions.
“Then we looked at how many cars there are in New Zealand. If they all drive 12,000km a year, have we got enough renewable electricity to convert them? We have about 10 terawatt hours of renewable energy generation consented and ready to go. Lots of geothermal, lots of wind. To drive three million cars on electricity takes about seven terawatt hours. So we already had more than enough consented renewable electricity energy in New Zealand to switch the fleet. No other country is like that, it’s just phenomenal.”
The announcement was made, and Mighty River Power’s Take Charge challenge was born. The firm’s fleet now includes Nissan LEAFs, Mitsubishi Outlander PHEVs, an Audi A3 e-tron, a BMW i3, Holden Volt, and a plug-in Toyota Prius. It’s a deliberate policy of showcasing a good range of the options, something Fraser does at home. His garage has what he likes to call the ‘Kiwi combo’ of EVs, a second-hand pure electric Nissan LEAF as a runabout and a plug-in hybrid Mitsubishi Outlander for longer journeys.
Mighty River Power closed its last thermal generating facility on New Year’s Eve. It now generates 100% renewable power. The company also purchased the What Power Crisis solar business in January to increase its solar service for customers.
A new take on old principles
These initiatives take in the latest technology. But for Fraser it’s just a logical extension of age-old principles in a company whose key infrastructure began construction in 1924.
Fraser says: “We look at the three Cs. What’s in it for the customer? What’s in it for the company? What’s in it for the country? If you have an initiative that is only going to satisfy one or two of those it is unlikely to sustain itself.
“We are an incredibly long-term business,” he says. “We have been around in the generation side of things for around 90 years. I like to say we have at least another century to run. We have got to hang out for another 30 election cycles, another 10 regional plans. We think: who is going to be here to face the music if something doesn’t work?
“Because everybody still needs to be here in 50 or 100 years’ time. You’ve still got to have customers, employees and investors. You’ve got to have a licence to operate. That’s about your community and your environment.
If those aspects are not enjoying one another’s company in 50 years’ time…If one of those is missing the others will be impacted or you are going to be out of business.
“I talk about custodianship – Kaitiakitanga. The decisions we make will be judged when the people that made them are no longer here. The test of your courage and conviction will be brutal hindsight, 50 years from now. There’s no short term game to be played.”