Lost in transition: The businesses trapped by New Zealand’s energy crisis

Photo: RNZ / Cole Eastham-Farrelly

In the balmy greenhouses of Rainbow Park Nurseries, orchids bloom in perfect rows - a picture of calm that hides how close the operation came to crisis.

The South Auckland business - which grows houseplants and trees for major retailers - has just finished a $2.5 million project to get off natural gas. An army of industrial heat pumps now feed two giant hot-water tanks, keeping the glasshouses at up to 28°C through winter nights.

Manager Andrew Tayler is blunt: without public money, it would not have happened.

"We were very lucky we got the funding," Tayler says. "If we didn't, we probably would have thrown waste-oil burners on the front of the boilers and walked away."

Rainbow Park was one of the last companies to receive a major grant from the government Investment in Decarbonising Industry (GIDI) fund before new rounds were frozen and the scheme was branded "corporate welfare" by the coalition. EECA covered roughly a third of the cost - about $880,000 - with the nursery borrowing and doing much of the installation work itself.

With no local examples to learn from, the company relied heavily on the advice of suppliers and consultants - and a lot of hope.

"Bolting 32 heat pumps together and putting them into two enormous hot-water tanks… it was a leap of faith," Tayler says. "But if we hadn't, we'd still be in the cycle of sweating every year about the gas - are they going to supply us, what is the price going to be, how is that going to affect our business?"

Photo: RNZ / Cole Eastham-Farrelly

Rainbow employs more than 90 people. Doubling gas prices, he says, would have "hamstrung" the business. Instead, the nursery now buys certified zero-carbon electricity and uses the savings on its gas bill to pay down the new system.

"We'd have to do what some other businesses are doing - curtailing production, turning the heat off in some compartments, maybe laying off staff, changing what we grow," Tayler says.

"I do feel like some of the guys that didn't have the opportunities we have will be finding it very tough."

Since Rainbow Park switched, the bottom has truly fallen out of New Zealand's gas market. Supplies are collapsing faster than expected. Long-term contracts have become scarce and expensive.

Factories that rely on gas now find themselves in a strange limbo - unable to secure long-term supply, facing steep price rises, but with little guidance or public funding to help them make massive, costly decisions about their energy future.

The result, energy experts and businesses warn, is a "forced transition": a messy, unmanaged exit from fossil fuels that risks shuttering plants, hollowing out regional economies and pushing up prices for everyone else.

"Energy transitions work better when people have time to see the