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Electricity (Renewable Preference) Repeal Bill

In Committee

Wednesday 17 December 2008 Hansard source (external site)

Part 1 Part 6A repealed

ParkerHon DAVID PARKER (Labour) Link to this

I would like to begin by responding to what the Hon Maurice Williamson said, which was that the answer to New Zealand’s electricity demand problems was to dam more rivers. He gave the impression that damming rivers was an easy thing to do, without significant environmental effects—

WilliamsonHon Maurice Williamson Link to this

I didn’t say that at all, so don’t tell lies.

ParkerHon DAVID PARKER Link to this

I raise a point of order, Mr Chairman. The member accused me of telling lies. The Hansard record will show that he stood and told the House that we should build more hydro generation. He should be asked to withdraw that comment.

WilliamsonHon Maurice Williamson Link to this

No; he just said “dam all rivers” and I didn’t say that.

RoyThe CHAIRPERSON (Eric Roy) Link to this

Basically, that is a debatable point. The member who interjected really cannot accuse another member of lying, so on that account he should not use that terminology. It is a debating point, I guess.

ParkerHon DAVID PARKER Link to this

Thank you. Well, it is not a debatable point as to whether I am a liar.

RoyThe CHAIRPERSON (Eric Roy) Link to this

The point that the member was making was a debatable point.

ParkerHon DAVID PARKER Link to this

Thank you, Mr Chairman, now that we have clarified that point. The member has said that he would dam more rivers in New Zealand, and that he thought the Greens were wrong to oppose the damming of rivers because that was undermining security of supply.

WilliamsonHon Maurice Williamson Link to this

I didn’t say “dam all rivers”.

ParkerHon DAVID PARKER Link to this

I did not say that the member said “dam all rivers”; I said that he would dam more rivers.

WilliamsonHon Maurice Williamson Link to this

You just did say that.

ParkerHon DAVID PARKER Link to this

Sorry; if I said that, I meant to say “dam more rivers”. Can I list for the member the number of rivers down my way, where we already supply far more power than we use to keep the member’s lights on in Pakuranga.

In my area the Taieri River is already dammed—one of our major rivers. So are the lower reaches of the Kawarau and so is the Clutha, in more than one point. The list goes on. So, too, the Waitaki River is dammed, so is the Tekapō, so is the Ōhau River, so is the Pūkaki River, so is the Waipori River, so is the Teviot River, so is Lake Manapōuri, the Wairau River, and the river system around Manapōuri and various other systems in Southland, which I must admit I cannot name offhand. In addition, consents in recent years have been issued for the damming of the Arnold River, for the damming of the Waiau River, and for another dam on the lower Waitaki River. When do we stop?

HipkinsChris Hipkins Link to this

Do we have any left?

ParkerHon DAVID PARKER Link to this

Well, we do not have many left down my way.

SmithHon Dr Nick Smith Link to this

Is Labour’s position to oppose any more hydro?

ParkerHon DAVID PARKER Link to this

It is Labour’s position that we do not need much more hydro, that we—

SmithHon Dr Nick Smith Link to this

“Much more”—oh, you’re going to dam more rivers. He’s going to dam more rivers.

ParkerHon DAVID PARKER Link to this

No; actually, people will not see Labour proposing changes to the Resource Management Act to enable more rivers to be dammed. It has been interesting that Contact Energy has said that it does not need just aided processes to get consent for more dams on the Clutha River; it needs a change to the environmental baseline that is provided by the Resource Management Act, so as to undermine the environmental protection that the remaining undammed sections of the Clutha River currently enjoy.

If members on the other side of the Chamber think they will be able to provide security of supply through damming more rivers and they think that they will do that down our way, then they should think back to the Save Manapōuri campaign and the Save the Clutha campaign, and they will realise that down our way, some things motivate people. One of them is that when generators have dammed so many of those rivers in Otago, South Canterbury, and Southland, and still want to do a lot more of that, then they ain’t seen nothing yet when it comes to civil protest and popular protest against what would be wrong.

We do not need to do that. So I am somewhat disturbed when I hear that Gerry Brownlee, who is on record as saying that we should have quite a bit more hydro, lots of little—[Interruption] Yes, the Minister has. I have heard him say it. He has said that now we have done all the big rivers, then we should do quite a few more of the small rivers. I put that on record.

I will move now to the issue as to whether we need to have some change in the legislation so that we can retire old thermal plant. The existing Electricity Act already specifically provides, at section 62G(1)(e), that an exemption can be given where new generation plant “will be connected and operated in circumstances where an existing thermal electricity generation plant will be retired in whole or part”, as long as there will be a 20 percent reduction in emissions.

So the existing legislation allows for new, more efficient thermal plant to be built to retire old coal-fired plant like Huntly, but if the Government repeals the legislation, then that will not happen. Instead it will get a new gas-fired station at Rodney, and it will get Huntly as well, so it will get increased instead of decreased greenhouse gas emissions. The existing legislation is necessary. A price on carbon alone will not guarantee where we need to go in respect of renewable generation.

In terms of what is consented and whether this is threatening security of supply, I make two points. Firstly, security of supply is a class of exemption. Anybody who has security of supply concerns can get an exemption to the restrictions on baseload thermal generation from the Electricity Commission making a recommendation to the relevant Minister that would then be adopted. But that is unlikely to be necessary, because we have so many renewable projects that are already consented. I have heard National members say they are not economic. I ask why these current-technology renewable projects are already being built by, in respect of geothermal generation, Contact Energy, Mighty River Power, and up north by Top Energy. Additional wind farms are also being planned for construction by a wide range of generators including Contact Energy, Mighty River Power, and Meridian Energy, which has the Mākara project currently under construction with the potential for close to 200 megawatts at that facility. There was an announcement recently of a Mighty River Power project over to the south-west of Wellington, and some very large wind farms are being proposed for Otago, some of which are consented and some of which are in consent.

There is ample new generation. In fact, there are already more than 655 megawatts of consented projects. To put that figure in perspective, 150 megawatts of extra capacity is needed each year to meet increasing demand. In addition to those consented projects, there are already an additional 2,875 megawatts of other renewable projects in consent processes as of 1 July 2008, and, indeed, some of those projects have already moved on to be consented.

One of the things we should remember about National power policy is that it was National that visited upon the country the so-called Bradford reforms, which were introduced under the control of Max Bradford but voted for by the previous National Government. It is interesting to reflect on how much easier it would be to go to renewable generation if we still had the old Electricity Department structure. Under that structure, all that would have happened would be a meeting between the Minister and Electricity Department where the Minister would say “Hey, look, is it possible to build renewables instead of thermal, please?”, and the department would say “Oh yeah, that’s economic, and that’s possible.”, and then the Government would say “Could you please do that, and not build any thermal.”, and that would have happened. I ask members to look at what we have now got ourselves into because of the ridiculous so-called reforms of the Bradford years, and the plan now for Genesis to build more facilities using gas.

I ask one other question of the Minister in the chair, Gerry Brownlee. Last week we had Genesis put prices up, and this week we had the Governor of the Reserve Bank say that given inflation pressures in the economy and the fact that we have a recession around the world and decreasing rates of return in virtually every other sector of the economy, it is about time the electricity sector decreased its expectation of ever-increasing profits no matter what the economic cycle. He said that electricity companies should not charge so much. Well, the Minister is part of the Government that owns on behalf of the taxpayer the major State-owned enterprises like Genesis Energy, Mighty River Power, and Meridian, which produce about two-thirds of New Zealand’s power. I ask why the Government does not simply say its expectations of rate of return from these companies has dropped by 2 percent. If the Minister said that to those generation companies, it would immediately cause them to not increase their power prices.

BrownleeHon Gerry Brownlee Link to this

Where were you for 9 years? There was a 63 percent increase in prices.

ParkerHon DAVID PARKER Link to this

Well, in the last 3 or 4 months the world’s economy has gone down. In fact, I have heard the Government’s own Minister of Finance acknowledge that reality. Maybe the Minister in the chair has not caught up on it. The solution lies in the Government’s own hands. It should not blame it on anyone else. It should get off its hands and tell those State-owned enterprises that they ought not to be putting up their prices, because in hard times the Government expects its companies to bear some of that pain, to not put prices up, and to not expect the same high rates of return during this part of the economic cycle that they expect in every other part of the economic cycle.

HodgsonHon PETE HODGSON (Labour—Dunedin North) Link to this

A long time ago we were at the beginning of the second reading debate on the Electricity (Renewable Preference) Repeal Bill, and I remember the good Minister of Energy and Resources, the Hon Gerry Brownlee, talking about the elephant in the room. I wonder whether the Minister can remember that comment. We thought it was a self-referral, but the good Minister was able to put us right. He told a story in which it became apparent that the elephant in the room was the Huntly power station, that great gargoyle that burns so many tonnes of coal and emits vast quantities of carbon dioxide into the atmosphere. He said that if there was a moratorium on some new plants that would replace this great gargoyle, this great monster that needs to be replaced, would not be replaced, that therefore we need to get rid of the existing legislation, and that that is why the Government has introduced this bill. That was roughly his contribution in the second reading. We know that it was nonsense.

BrownleeHon Gerry Brownlee Link to this

It is very rough.

HodgsonHon PETE HODGSON Link to this

Well, I did it in 1 minute. The Minister spent 10 minutes, but that was the essence of it.

There are two reasons why it was nonsense. The first reason has already been outlined by Jeanette Fitzsimons and David Parker, and it is that the legislation the Minister is ripping out of the statute book says, if members care to read it, that where there will be a significant improvement in energy efficiency, then of course that plant can go ahead. You see, a straw man was set up, and it has been knocked over by black-letter New Zealand law. The Minister needs to forgo that argument in all parts of the Committee stage, and so does Dr Paul Hutchison and anybody else who runs up that particular flag—that under the moratorium it is not possible to build a more efficient fossil fuel station and back off a less efficient one. It is possible. It is a matter, as I say, of black-letter law.

The second reason is even more interesting. The Minister’s mind is in this frame: “Is it going to be gas, or is it going to be coal?”. It could be in another frame altogether, such as “Is it going to be renewable generation, or is it going to be coal?”. I invite the Minister to make the paradigm shift from gas as a source of baseload generation to renewable generation. Of course, he may be thinking “Ha ha! It doesn’t always rain.” and “Ha ha! It doesn’t always blow.” But we have an integrated electricity system, and the Minister knows as well as I do that the spread of the catchments of our hydro facilities and the spread of wind generation—especially in the foreseeable future—is such that there is very good integration across the land. Of course there can be dry years. We have had a few. I hope we do not have any more any time soon, and I am delighted that the lakes are at a state of considerable replenishment right now.

ChadwickHon Steve Chadwick Link to this

Yes, happy Christmas, Minister.

HodgsonHon PETE HODGSON Link to this

Happy Christmas to the Minister. That is where the reserve generation capacity comes from, and that is the future of the Huntly plant. I ask the Minister to take out one of its driveshafts, to take out 250 megawatts—or, indeed, to invite the Electricity Commission to consider doing so, because he does not have the ability to do it; it would have to be done by the commission. Let us see whether that is a future possibility. When National fetches up paper tigers and straw men and runs red herrings up flagpoles, we can pick them out pretty quickly. Fortunately, there is an erudite Opposition here to point out the error of the Government’s ways.

You see, there is no particular need to scrap the existing legislation. Ideology is what is at play here. Government members claim that it is bad legislation because it was introduced by an awful, horrible, bygone Labour Minister in an awful, horrible, bygone Labour Government, and that is why it has to be thrown out. It is actually quite elegant legislation. It gives a market signal in law, it puts exceptions in place where exceptions may be needed, it is time-limited, it is designed to ensure that the base of New Zealand energy will be renewable energy, and it is designed to have New Zealand heading towards 90 percent renewable energy by 2025. And 90 percent by 2025 means no more fossil fuel power stations, thank you very much, between now and then; otherwise, those who build them will have to wreck them in order to meet the target.

The moratorium is simply a way of signalling, in law, that the Government’s intention is serious. If the moratorium is going to be ripped down, it seems to me that, ipso facto, the Government’s target, which is the same—90 percent renewable energy by 2025—is one that it does not intend to keep. I put it to members opposite that I do not think that it is remotely possible for us to achieve the Government’s own target of 90 percent renewable energy by 2025 by allowing more fossil fuel generation. I do not think it is arithmetically possible. Therefore, the Government should be saying: “We have told porkies, and we need to change our target.”, or it should get rid of the legislation before us now. It needs to do one or the other. It should change its target and say it has been telling porkies, or it should get rid of the legislation before the Committee right now.

I think those are the two options. I think they are the only honest options, and the fact that the Government is not prepared to take either of them means that it is designing a future that is based on sophistry. We will catch this Government out within 3 years, and we will replace it at the end of that time.

CurranCLARE CURRAN (Labour—Dunedin South) Link to this

There has been a consistent theme running through the legislation that has been rammed through Parliament in the last week without any public scrutiny, and that theme is a lack of logic. Apart from the absolute outrage of rushing through legislation that does not need to be rushed through uncontested under the cover of Christmas, there is a lack of logic. It runs through every bill that has been passed in the House in the last week, and it does not make sense. It is as if the National-led Government is living in a parallel universe.

National policy says it believes that New Zealand is a responsible international citizen and, as a country that values our clean, green environment, must act to reduce our greenhouse emissions. That is National policy. This week the mantra of John Key and the National Government has been “balance”—balance of environmental issues against economic interests. It sounds more like code to me than balance. But according to National we must have thermal generation, to ensure security of supply and to keep prices down, even though there is enough thermal generation already—and everybody on this side of the Chamber has talked a lot about this tonight—to ensure security of supply.

We already have these new generation projects coming on stream over the next 4 years, and we need about 150 to 200 megawatts built each year to keep up with demand—and we have heard David Parker list them tonight. Our security of supply margins have been improving all the time. So given that this Government claims in its policy that it wants to reduce greenhouse gas emissions—

ParkerHon David Parker Link to this

I raise a point of order, Mr Chairperson. We have a Minister in the chair who never takes a call, who would not defend his biofuel legislation, and who is not taking a call here, yet he abuses his position in the chair in respect of his access to the microphone. He abuses the convention of Parliament that the Minister in the chair will not make interjections whilst in the chair and will instead exercise his right—indeed, his duty—to take calls periodically. I request, Mr Chairperson, that you call the member to order.

RoyThe CHAIRPERSON (Eric Roy) Link to this

I will uphold the point of order. It is in breach of Speaker’s ruling 59/4. It is the convention that the Minister in the chair will not interject when the microphone is on.

SmithHon Dr Nick Smith Link to this

I seek leave to table for the good benefit of the member on her feet the press release by Mr Pete Hodgson announcing Labour’s construction of the Whirinaki diesel-fired power station, noting that—

RoyThe CHAIRPERSON (Eric Roy) Link to this

Leave is sought for that purpose. Is anyone opposed to that course of action? There is no objection. Under the Standing Orders the member will have to table that document today.

Document, by leave, laid on the Table of the House.

CurranCLARE CURRAN Link to this

Why is National ramming through reckless, backward-looking legislation that does not take into account the reality of secure supply and is a kick in the teeth to New Zealand’s reputation as a nation that takes climate change seriously—a nation that is willing to do the right thing?

As Stuart Nash said in his maiden statement tonight, Labour always asks: “Is it right?”. Well, unfortunately, I do not think that this Government is concerned about what is right. It is more concerned about having a blind commitment to some other agenda. Hmm, I say to myself! Anyone would think that another agenda is going on here, but I am a bit of an optimist and I always like to think the best of people—I do. I would like to believe that a brilliant new strategy is being developed that is so brilliant it requires a review of the emissions trading legislation, a reconsideration of all the principles of climate change, and disinvestment in the biofuels industry.

I would like to believe that this really brilliant new strategy will somehow magically reduce our emissions, but despite my optimism I have a horrible feeling. We all know that in this time of economic crisis across the world, confidence is the key to dealing with the problem—confidence in the financial system, confidence in the institutions, and confidence in the Government because it knows what it is doing and has a plan.

CurranCLARE CURRAN Link to this

I tell the member that this bill destroys confidence, as have all the bills that have gone through the House in the last week. The repeal of the legislation requiring oil companies to mix petrol and diesel with biofuel undermines confidence in new industry, the 90-day bill undermines confidence amongst workers, the education bill undermines confidence amongst teachers and children, and now this bill undermines confidence in New Zealand’s commitment to addressing climate change.

RobertsonGRANT ROBERTSON (Labour—Wellington Central) Link to this

I am sure my colleague Clare Curran will be able to take another call and carry on with her excellent speech.

I refer us back to Part 1 of the Electricity (Renewable Preference) Repeal Bill. Part 1 repeals Part 6A of the Electricity Act 1992. I think it is worthwhile to take just a moment to reflect on the purpose of the part that we are repealing. The purpose of Part 6A is, in part, to implement a 10-year restriction on new baseload fossil-fuelled thermal electricity generation capacity, except where an exemption is appropriate—for example, to ensure security of supply. I find it difficult to understand why the National Government would want to repeal something like that.

This restriction is part of a wider plan in respect of our sustainability that the Labour-led Government had been working on. Yesterday in the House we heard uncertainty as to whether the emissions trading scheme has been suspended or whether it is continuing in some other form. We also know that as part of our emissions trading scheme Labour and the Greens had agreed on an insulation package, we had the biofuels obligation, and we had brought through this renewable preference focus. That was Labour’s plan to help address our issues of sustainability—a long-term plan to start dealing with a long-term issue like climate change. In Part 1 of this bill we see “short-termism”, whereby National says that it made a promise on this issue and it is going to go through with it. It is short-term logic and it does not follow through on the importance of the issue of climate change. National does not seem to have a plan.

Earlier today we heard the Minister in the chair, the Hon Gerry Brownlee, say we just had to wait—that is what he told us. Well, climate change is a pretty pressing issue. We need a plan, and we need to know what is going on in terms of the National Government’s overall sustainability plan. How will it address those climate change issues? It is not acceptable for National to bring a bill to this House and say that it is getting rid of the renewable preference, but that it does not know what else is happening. It does not know what the rest of the plan is. It is not even sure where we are going on the whole issue of sustainability.

This is a reckless bill. It looks backwards. It takes us backwards. It is a nail in the coffin for New Zealand internationally. I have stood on the world stage and talked about New Zealand’s environmental record, and I have been proud to do that. I was proud to do that under a National Government when I was working at the United Nations in New York because Simon Upton, a former Minister for the Environment, stood up for New Zealand. He stood up and said that New Zealand had a record that we could be proud of. He meant what he said when he talked about sustainability.

The Labour Government came in and tried to carry that on. In Part 1 we see the repeal of one part—one aspect—of that attempt. It repeals a part of legislation that says that we will put a restriction on baseload fossil-fuelled thermal electricity generation. There are exemptions. There will be times when we will allow that to happen. But we want to send a signal out to the world, to New Zealand, and to the environment that we can work with renewable generation. Somehow or other National seems to be telling us that security of supply is incompatible with renewable generation. That seems to be what it is saying. But we have heard time and time again in this debate that that is not true.

ParkerHon David Parker Link to this

New Zealand used to be 90 percent renewable.

RobertsonGRANT ROBERTSON Link to this

That is right. New Zealand used to use 90 percent renewable energy. We are working away, with 1,400 megawatts of new generation projects coming on stream over the next 4 years. David Parker has outlined those projects; they are meeting the demand that we need to meet.

Why does National want to repeal Part 6A? This repeal bill sends a signal to the rest of the world that we do not take seriously our sustainability challenge. The fundamental thing that New Zealand needs to do is show the world that we are taking the sustainability challenge seriously. It is not just about the environment or the future that we want to leave for the next generations; it is about our economy, because it is about how we are seen in the world. We have already seen this with the statements Gordon Brown has made and his policy—which we are looking at—that could restrict people travelling to New Zealand if cost is a factor for them. Now we will see it again and again.

The National Government has to wake up and realise that our reputation internationally is important not just for foreign affairs officials but also for our economy and for getting our goods sold overseas. The image we are sending with this bill is that we do not want to go towards a renewable future. Everyone else in the world might be going towards a renewable future, but we do not want to! We want to go backwards to more coal and more gas, rather than to look ahead to our natural advantages. Part 1 repeals one of the most significant things that we could do. It is a key part of the picture, yet National has decided it wants to go backwards.

SmithHon Dr Nick Smith Link to this

You’ve gone backwards for 9 years.

RobertsonGRANT ROBERTSON Link to this

We have not gone backwards for 9 years.

ChadwickHon STEVE CHADWICK (Labour) Link to this

I rise to take a call to build on the previous speaker’s comments about New Zealand’s international reputation. I have just returned from a climate change conference in Viet Nam that I attended with Dr Paul Hutchison and Sue Kedgley, where we hung our heads down in shame. This conference was about climate change and the effect on population and population demographics. We used to be looked at, in this forum, as leaders in the world.

SmithHon Dr Nick Smith Link to this

Absolute rubbish!

ChadwickHon STEVE CHADWICK Link to this

And I will build on another conference I went to in Chile where I was asked with Ministers of Conservation—I say to Dr Nick Smith—to also give a paper on conservation and climate change. People at these conferences were looking to New Zealand to be a leader, and to take keys and intuition from the way that New Zealand was going.

I think that the trifecta the Government has plonked in the House under urgency brings shame on this Government. What did we see? We saw the gutting of the emissions trading scheme and that Dr Paul Hutchison now has to chair a select committee—with no gender perspective on the terms of reference, I note. Women are hugely affected by the effects of climate change and we will make sure that we fix that. The emissions trading scheme special select committee is going to waggle on for some time, giving no clues to the market about the investment signals that the previous Minister of Energy had been very clear on, with our energy strategy stating that we would have 20 percent renewable generation by 2025.

ChadwickHon STEVE CHADWICK Link to this

It is 90 percent. What a line in the sand that was.

SmithHon Dr Nick Smith Link to this

20 percent! That’s about right. That’s where it was heading.

ChadwickHon STEVE CHADWICK Link to this

I will correct that, I say to Dr Smith. It was 90 percent renewable generation by 2025. What a wonderful signal that was by the previous Minister of Energy. We also had the biofuels target. Shame on the Government now for the damage it has done to the biofuels obligation and to investor signals in what was a lofty goal for New Zealand.

Now tonight there is the trifecta: this ridiculous Electricity (Renewable Preference) Repeal Bill. I am ashamed that after all the work we did, led by the then Prime Minister Helen Clark, we are now looking at a cumulative effect that is not going to let New Zealand hold up its head in international fora and say we are leaders on climate change.

So what do we have? We now have a Prime Minister who has also made himself—and I thought it was very clever at the time—the Minister of Tourism. As well as looking at footballs for the World Cup, he will also go around the world as Minister of Tourism touting the brand of clean, green New Zealand. I think our Prime Minister needs to look very closely at this trifecta, which signals a slipping and sliding back to the times before Labour came into Government in 1999. It is a sad day for us.

I think the other thing about all of these signals is that these are deemed to be “urgent” measures—lifting a 10-year moratorium on baseload thermal energy. It is absolute rubbish that we have to be doing this in urgency, and that it will not go to a select committee to allow the Major Energy Users Group, the small energy-developers, and the consumers to come before that select committee to give their view. I am ashamed of the process that this legislation is going through now; it is absolutely shaming. The country is noticing it and soon it will wake up to realise that this was the genesis—as Jeanette Fitzsimons said—for allowing the production at e3p and Kaipara. Of course this was what this was all about—opening up the way to gas—

ChadwickHon STEVE CHADWICK Link to this

—no, at Huntly—and opening up other thermal baseload generation. The spokesperson, when he was in Opposition, kept asking David Parker why he was so risk-averse about lifting the 10-year ban. I also want to mention the first role of the Minister of Energy, which was to come into what was my old electorate, which I love dearly, to open the Kawerau power station. And how did that happen for Mighty River?

GuyNATHAN GUY (Senior Whip—National) Link to this

I move, That the question be now put.

ArdernJACINDA ARDERN (Labour) Link to this

I am grateful for the opportunity to speak on the Electricity (Renewable Preference) Repeal Bill. Another hour passes and another Act is repealed by the National Government, another round of select committee hearings is bypassed, and another regulatory impact statement fails to be produced to this House.

I find that part quite amazing, I have to say, given the rhetoric from that side of the Chamber about the importance of regulatory impact statements.

Hon Member

They have a Minister.

ArdernJACINDA ARDERN Link to this

Absolutely! Those members think the issue is so important that they have a Minister for Regulatory Reform, yet the House has not seen one adequate regulatory impact statement.

We are speaking on Part 1, which repeals Part 6A of the Electricity Act 1992. Given the brevity of the bill before us, for the edification of members I would like to read from section 62A, which gives the purpose of Part 6A: “The purpose of this Part is to reduce the impact of fossil-fuelled thermal electricity generation on climate change by creating a preference for renewable electricity generation through the implementation of a 10-year restriction”—I highlight that part, for the edification of members—“on new baseload fossil-fuelled thermal electricity generation capacity, except when an exemption is appropriate (for example, to ensure security of supply).” That last part is particularly interesting, and I would like to dwell on it, if I may.

ArdernJACINDA ARDERN Link to this

I will; thank you, colleagues. We have heard that one of the reasons for the existence of this bill is to give that all-important security of supply. No one is doubting the importance of security of supply. That is why Labour legislated for it; that is why we pointed out its importance in the purpose section of Part 6A of the Act. Now we see it being used as an excuse for Part 6A in its entirety to be repealed. I see that the Minister in the chair, Gerry Brownlee, has a picture book in front of him at the moment, so perhaps he is not concentrating fully on the happenings of the Committee. I have a question for him: what is the point? If this bill is all about security of supply, and Labour has already set out provisions for that, what is the point? In fact, the Minister has heard speakers on this side of the Chamber point out that plenty of new generation is coming on stream over the next 4 years. In fact, we need much less generation than we have coming on stream. We are prepared, so what is the point?

All I see on that side of the Chamber is a complete lack of aspiration. I know that National members would like to patent that word. It is their favourite. It is the word of the hour: “We are going to turbocharge aspiration.” In fact, as far as I can see, turbocharging aspiration is code for ramming legislation through the House. Their turbocharged aspiration has brought us the repeal of Labour’s biofuels legislation and, now, the repeal of Part 6A of the Act. What does this tell us? If we might actually have to build a new industry, we might actually have to bring forward entrepreneurial Kiwis to create jobs, and we might actually have to be a bit creative in the work we do, the National Government believes that it is too hard and we should get rid of it. That is what aspiration means to the National Government, and that is all that we have seen.

There is a lack of aspiration for our environment, and that is the critical part for me. I am standing here proudly as a child of the 1980s, but with some shame at what members from the 1970s, 1960s, 1950s, and beyond, have brought forward for us. What does this bill say to the next generation of Kiwis?

ArdernJACINDA ARDERN Link to this

Where is the can-do attitude, I ask Dr Smith. Where is the can-do attitude? I can tell members that the Labour Government had aspiration for this country. We saw what was possible, we combined it with our absolute dedication and commitment to improving the environment of New Zealand, and we put forward legislation, which the National Government is now busily repealing. I would also add—to look forward a little—that I know that the National Government is also very keen to get to work on the Resource Management Act.

QuinnPAUL QUINN (National) Link to this

I move, That the question be now put.

Link to this

A party vote was called for on the question,

That the question be now put.

Ayes 63

Noes 58

Motion agreed to.

Link to this

A party vote was called for on the question,

That Part 1 be agreed to.

Ayes 63

Noes 58

Part 1 agreed to.

Part 2 Consequential amendments to principal Act

HodgsonHon PETE HODGSON (Labour—Dunedin North) Link to this

I will talk to Part 2, which is a relatively small part with some consequential amendments to other parts of the principal Act, beyond the repealing of Part 3. I want to address my remarks on this part to rebut some of the logic—actually, logic is far too strong a word—some of the commentary that the Hon Dr Nick Smith has made throughout the debate, in the first reading and in the second reading. Actually, he was active during the biofuels bill, too, but I should not talk about that at length when we are dealing with the Committee stage of this. He was active, also, last week, when we were setting up a select committee to look into climate change. But I really should not talk about that at great length, because we must contain ourselves to the purposes of the Committee stage. But the consistent theme has been, in the words of the Hon Dr Nick Smith—

SmithHon Dr Nick Smith Link to this

I raise a point of order, Mr Chairperson. We are debating Part 2 of the Electricity (Renewable Preference) Repeal Bill. This part deals with only the consequential amendments, such as the powers of the Electricity Commission to investigate issues in respect of the electricity renewable preference provisions that are being repealed. I think you should require the member to speak on that part.

RoyThe CHAIRPERSON (Eric Roy) Link to this

That is right; you have made a fair point. Thank you. I think the member on his feet knows that. I just say that when it comes to closures, repetition and relevance are a matter that the Chair considers.

HodgsonHon PETE HODGSON Link to this

I thank the Hon Dr Nick Smith for repeating the very words I had used. This is like being in an echo chamber, not in the Chamber of the House of Representatives. The point I was about to make, and now will make, which is relevant to this part because this part makes some consequential amendments and therefore makes the abolition of the energy renewable preference bill complete—without it, it would not be complete—is that the Hon Dr Nick Smith has throughout this debate said, for a day and a half now, that Labour’s record on climate change was shocking, and that Labour’s record on building fossil-fuelled plants has been shocking. He has been listing figures and listing power stations. He has been not taking his tablets, and all the while he has been voting against any improvement.

SmithHon Dr Nick Smith Link to this

I raise a point of order, Mr Chairperson. You can always tell when Labour members are in trouble with the debate; they get personal and nasty. I do not think that those sorts of statements do anything for the Committee, and I take offence.

RoyThe CHAIRPERSON (Eric Roy) Link to this

Let me just say that we are going to have to change our habits, in terms of points of order. I will make a general point first, then I will respond. Members raising points of order should adhere to what the Standing Orders and Speakers’ rulings say—that they should be terse. The presiding officers will not tolerate barbs, innuendos, or imputations in points of order. We will deal with points of order in a fair and just way, in the House in general. The member has just offended in that way—not in a particularly bad way, but it is symptomatic of what is going on. I want to make that point very clear. We are going to change our habits, as a House, about that. That is the first thing. The second thing is that the member did breach what is accepted.

HodgsonHon PETE HODGSON Link to this

Very good, Mr Chairman. Dr Nick Smith has, all this while, said that the progress this country has made—

SmithHon Dr Nick Smith Link to this

I raise a point of order, Mr Chairperson. I think the statement that was made by Mr Hodgson was offensive, and I take offence. I think the member should be required to withdraw and apologise, Mr Chairman.

RoyThe CHAIRPERSON (Eric Roy) Link to this

I ask the member to withdraw and apologise.

HodgsonHon PETE HODGSON Link to this

I withdraw and apologise. Right through the debate the Hon Dr Nick Smith has railed against this country’s poor record, but voted to make it worse. I want him to get to his feet to explain what is logical about a member apparently caring a great deal about our progress on climate change, and apparently caring a great deal about emissions that occur in our electricity sector, but then voting to make them worse—voting to get rid of biofuels, and in the case of this legislation and this part, which completes the abolition of the moratorium, voting to allow the building of baseload fossil-fuelled generation. He speaks in one direction and votes in another. I want the honourable gentleman to take the call and explain himself, because he has not got any logic to his logic. The gentleman says one thing and votes in the other direction. I am getting sick of it. I reckon—

SmithHon Dr Nick Smith Link to this

I raise a point of order, Mr Chairperson. We are meant to be debating Part 2. It is a very narrow part, and it changes, very narrowly, the investigative powers of the Electricity Commission. The Standing Order around the Committee stage debate is that the member needs to narrowly reflect on those issues in Part 2. I ask that he be required to comply with the Standing Orders.

RoyThe CHAIRPERSON (Eric Roy) Link to this

I uphold that point of order.

HodgsonHon PETE HODGSON Link to this

Very good, Mr Chairperson. I was simply making the point that Part 2 completes the abolition of the moratorium. Therefore, by completing the abolition of the moratorium, Part 2 allows the moratorium to be lifted; therefore, it being lifted allows for the development of further fossil-fuelled electricity generation, and, therefore, is not consistent with anyone who argues against that.

The most vociferous arguments against those things have come from the Hon Dr Nick Smith, who, none the less, votes in the other direction. I do not understand it, and there are a bunch of words I cannot use to describe it, so I shall not. But I do think that, in the course of this part of the Committee stage of the bill, the Hon Dr Nick Smith, Minister for the Environment, should get on his pins and describe what it is about his contribution that is remotely logical. So far, it appears to me to be bereft of logic. The good gentleman has got himself a PhD from somewhere and therefore has to have a couple of brains to rub together, and I would like to see that exposed. I would like to see the gentleman get to his feet and see whether he can make something resembling a coherent argument in favour of fewer emissions but somehow against a moratorium that would stop them. Thank you, Mr Chairperson.

ParkerHon DAVID PARKER (Labour) Link to this

Part 2 amends the principal legislation by removing the inquiry powers of the Electricity Commission. I will discuss those inquiry powers and describe to the Committee how those powers currently work under the existing legislation and why it is important that they not be repealed. One reason I want to explore this is that when the existing legislation was passed, one of the principal objections raised in the debate by National Party members was that, essentially, the decision as to whether an exemption should be given from the restrictions was a ministerial discretion, which effectively enabled the future shape of the electricity market to be determined by ministerial fiat. That was never the case, and it is interesting that in this debate National members are no longer using that justification; they have moved to different grounds. I make that point because it shows that the underlying purpose now is political, not principled.

The existing legislation states that the Minister of Energy can grant exemptions in a number of categories, and that it is for the Electricity Commission to do an inquiry on an application by someone who wants to come within the ambit of one of those exemptions, in order to see whether the exemption should be granted. The commission then makes a recommendation to the Minister of Energy, and the Minister has the authority to do only one of two things: the Minister can either accept the recommendation or reject the recommendation. The Minister of Energy cannot replace the recommendation of the commission with some different decision. The Minister cannot replace the recommendation with his or her own decision, but can accept or reject the recommendation.

The exceptions that are allowed for under the legislation, which the Electricity Commission has the duty to consider, are set out in section 62G in Part 6A of the Electricity Act. The first is that the Minister of Energy can grant an exemption—again, on the recommendation of the Electricity Commission—if the specified generation plant will be non-baseload plant that will have an average load factor less than a prescribed limit, will emit greenhouse gases less than a prescribed limit, or will have a start-up time of less than a prescribed limit.

The second exemption is where there is a combination of renewable or other non - fossil-fuelled plant, together with fossil fuels. That cogeneration process can be a sensible way to generate electricity.

The third exemption is one that I have mentioned in previous contributions in response to the National Government’s assertion that the country could not build new, more efficient thermal plant to retire less efficient coal plant, for example. That category exemption is found in section 62G(1)(e). It states that the specified generation plant that could be allowed will be connected and operated in circumstances where an existing thermal electricity generation plant will be retired in whole or in part, and that the specified generation plant, together with any part of the existing thermal electricity generation plant that is not retired, will be operated in a manner that will reduce greenhouse gas emissions by at least 20 percent, based on emissions of the existing thermal electricity generation plant and the projected emissions assessed in the prescribed manner. It also requires the Electricity Commission not to reduce the security of supply.

So what would happen in practice under the legislation as it stands will not be able to happen if Part 2 of this bill passes in its current form—that is, the Electricity Commission will lose its ability to make that inquiry. If, as National members say, they are concerned about being able to replace inefficient thermal plant with efficient thermal plant, then the Electricity Commission is the body that would listen to those applications, and it would have the expertise to assess the security requirements of the system. For example, we do not want to lose the whole of the Huntly power station to some interruptible gas-peaking plant, because that would not be good for the security of supply, but we might be willing to have that replaced by a more fuel-efficient gas plant that has lower emissions than a gas-fired plant. It would be for the Electricity Commission—

GuyNATHAN GUY (Senior Whip—National) Link to this

I move, That the question be now put.

RobertsonGRANT ROBERTSON (Labour—Wellington Central) Link to this

I just want to build on the comments of my colleague David Parker about the powers of the Electricity Commission, which are covered under Part 2 of the bill, because, as was kindly pointed out to us by members opposite, we are debating the investigation powers of the commission, which are being removed as a consequence of what we have already done with Part 1. Really, we have to ask what the commission would be investigating. We have already heard from David Parker that some of that is around the question of exemptions; and in listening to the debate, it seems to me that a number of members opposite do not seem to realise that there was an exemption part of the Act. It does not even seem as though they want to know that. The very reason it was there was to allow, as we know, the Electricity Commission to investigate situations where there was a more efficient thermal option that could be brought on board. That was an important part of the Act, because although we wanted to ensure that renewable generation was preferenced, and we wanted to make sure that New Zealand goes forward into the future with renewable energy, we also wanted to make sure that we continued to develop efficient options where they are. So that is what the commission would have been investigating, but it will not be able to do that now, as we go to repeal that legislation.

What else would the commission be investigating? It would potentially be investigating other areas where people perhaps were going to breach the moratorium. We do not know that there was a lot of that going on, because what we do know is that there was a large amount of renewable generation coming on stream—1,400 megawatts. So it would have been unlikely that the Electricity Commission would have been investigating this kind of breach of the moratorium, but it is possible. Once again, we will not be going down that path because we are here trying to repeal that under Part 2.

Another part of what the Electricity Commission would have been looking into around the grounds, terms, and conditions of exemption was under section 62H of the Act. The Minister of Energy would have had to specify in the exemption the ground or the purpose under which the exemption was going to be granted. It then went on to state what conditions would be imposed upon that, and if the person was granted an exemption, he or she then had to specify the kind of generation plant that would be operated and how it fitted with the rest of the Act. So that is the kind of work that the Electricity Commission would have been investigating. It was an important thing. But a really critical part that we have not discussed yet is section 62I, which is actually the public consultation process.

MackeyMoana Mackey Link to this

National doesn’t believe in that.

RobertsonGRANT ROBERTSON Link to this

I know that National would find that a difficult subject to discuss, because we have seen throughout this week that public consultation is not something it is interested in, but that was the role that the Electricity Commission was going to do—to make sure the voice of the public would be heard if there was a case for an exemption or, indeed, if there was a case for someone being prosecuted.

Section 62I of the Electricity Act states: “Before making a recommendation to the Minister of Energy to grant an exemption, the Commission must—(a) publish its intention to do so … and (b) give a reasonable opportunity to those persons to give those views; and (c) have regard to those views.” So that is what the commission was going to be doing. It was going to be operating a public forum in which people could put forward their views. That is a very, very good thing and it is not something we have had an opportunity to do under this bill.

This bill makes a significant change to the way we look at our sustainability challenge going forward, and there is no opportunity for public consultation. Obviously the Electricity Commission had that role and that is now gone. The select committee would have been a great venue at which to have a debate about the mixture of New Zealand’s energy generation that we want going forward. But, no, National has come to this Parliament for the past 2 weeks to show us that it does not really want to listen to the public’s concerns. It does not want a body like the Electricity Commission to have the opportunity to hear public concerns.

It simply wants to ride roughshod over New Zealand’s global and local interests. It is sort of like a perverse version of the “think global, act local” approach that the National Government is taking. On a global level it wants to take us backwards by ensuring that we will not only be made a laughing stock on the world stage but also be told here in New Zealand that we will not look forward and we will not try to protect our environment. What we see in Part 2 is the enabling of the repeal of an important part of the make-up of our sustainability going forward. We want renewable energy because it is good for the environment. That is also good for jobs and employment, and we can see that right around the world—in the European Union, and in Germany in particular where a lot of jobs have been created in the renewable energy industry. That is not what the National Government wants. It does not want to see any jobs created in this area; it wants to take us backwards to a time that realistically is not where we want to go.

WoodhouseMICHAEL WOODHOUSE (National) Link to this

I move, That the question be now put.

JonesHon SHANE JONES (Labour) Link to this

I will take a short call—a skimpy, small contribution inversely related to the problems that will follow—on Part 2. I follow on from what Mr Robertson has said. The stripping away of these institutional powers worsens the capacity for ordinary, garden-variety Kiwis. Whether they be firms and users of energy, investors, or communities, they will have their rights to engage in participatory democracy stripped away from them.

BrownleeHon Gerry Brownlee Link to this

This is very good.

JonesHon SHANE JONES Link to this

I say to Mr Brownlee that the bill is inversely related to a certain girth, but I will say more on that at another time. It is a very mean-spirited approach to people having a stake, an opportunity, to participate in, and influence the outcome of investments in, the energy sector. It might suit some narrow sectional interests that have been driving, for a whole host of reasons and for a long time, to change the character of energy investment and the range of sources from which we derive energy or the resources we use to create energy. In that sense it is a very blinkered approach. Others have spoken about how it will have ruinous consequences on our international reputation.

SmithHon Dr Nick Smith Link to this

I raise a point of order, Mr Chairperson. We are meant to be debating Part 2 of the Electricity (Renewable Preference) Repeal Bill. It is a very narrow part, dealing only with the deletion of the words “Commission” from the investigating powers of the Electricity Commission. I have listened carefully to the member. He has been well outside the Standing Orders, and you should require him to speak to the part.

JonesHon SHANE JONES Link to this

Speaking to the point of order, I say that it is quite simple. This strips away institutional powers, and it will have an effect in terms of how the full legislation is implemented.

RoyThe CHAIRPERSON (Eric Roy) Link to this

No, the member is getting into the debate. Several cautions have been given to Committee members to stay on target, to stay on message, and to keep within the realms of Part 2. I invite the member to continue.

JonesHon SHANE JONES Link to this

For fear of spurring another avian contribution from Dr Smith, I say fair enough. Dr Smith may laugh, but as I have said before, there is a famous Māori proverb: “He pīpīwharauroa atu i konei, ki konā—when the cuckoo leaves one nest, it goes over there, still a cuckoo, so kaua koe e katakata. [ do not laugh]

To go back to Part 2, I say that it is an egregious slur that Dr Smith puts upon the ability of a parliamentarian to contribute to such an important matter. National has brought forth a set of ideas and is hiding them as narrow, technical amendments. But, in actual fact, it is a circuitous attempt to erode our ability to act in a sustainable and very wise fashion and uphold our international integrity in the eyes of our competitors. Also, it worsens the prospects of moving towards a broad, sustainable approach in relation to energy. This is a very worrisome, negative, and mean-spirited attempt to strip away a fantastic set of changes that was brought forward by my colleague here. The Government refused to allow them—[Interruption] Ah, there is noise from the cuckoo’s nest, and it is now being joined by chirps and trills from the back of the Chamber. Of course, those members fear the accuracy of what we are saying. One cannot reduce people’s rights to participate, and one cannot force industry to pay higher costs as a consequence of stripping away the institution’s ability to investigate and to test the worthiness of various energy proposals. For that reason this will be only a short contribution to the statutory landscape, until such time power returns to where it belongs. Kia ora tātou katoa.

MacindoeTIM MACINDOE (National—Hamilton West) Link to this

I move, That the question be now put.

Link to this

A party vote was called for on the question,

That the question be now put.

Ayes 63

Noes 53

Motion agreed to.

Link to this

A party vote was called for on the question,

That Part 2 be agreed to.

Ayes 63

Noes 58

Part 2 agreed to.

Clauses 1 to 3

ParkerHon DAVID PARKER (Labour) Link to this

I rise to take a call in the debate on clauses 1, 2, and 3. I focus for a start on the date that this legislation comes into force, which is the day after the date on which the bill receives the Royal assent. We can take it from that that the Government intends, having passed this legislation in urgency, to take it as soon as it can to the Governor-General to get its Royal assent, and thereafter it intends this legislation to take effect.

I ask the Minister what the rush is and why the Government thinks there is a need to repeal the existing legislation—which is the effect of this bill—so soon, when it does not yet have the price of carbon in the economy that it says it will rely upon as the alternative in order to discourage thermal-based electricity and instead prefer renewable sources of electricity. We have heard from the National Government that it has adopted the Labour Government target of 90 percent renewable generation by 2025. But in order for there to be a meaningful prospect of that target being achieved, we have to build renewable generation in the future rather than more thermal generation, and that, of course, was what the existing legislation did. It placed restrictions on additional thermal generation, thereby encouraging New Zealand to go for renewable generation.

The great thing about renewable generators, as we all know, is that once we have built them the fuel is free. We do not have to buy more gas and more coal for ever. But when Government members spoke during earlier stages in this debate, they said that they would achieve that effect through having a price on carbon. But, of course, we do not yet have a price on carbon in the electricity sector; we have a price of carbon in the forestry sector only and, indeed, that has already been undermined by the National Government saying that it will suspend the emissions trading scheme.

We have a select committee being set up by a motion and taken through this Parliament by the Leader of the House, who is also the Minister of Energy and Resources. This new select committee has been created to look at, amongst other things, whether we should have something other than an emissions trading scheme or whether we should, perhaps, have a carbon tax.

JonesHon Shane Jones Link to this

Rodney Hide made them do it.

ParkerHon DAVID PARKER Link to this

Rodney Hide made them do it; that is right. Amongst other things, those members were weak, and they thought that they should open up the ambit and extend the inquiry into matters relating to whether climate change is real. In the meantime we do not have a price on carbon. We have uncertainty as to when we will have a price on carbon, whether we will have a price on carbon, and whether the price of carbon will be anything near the real market price of carbon or will be at a low figure such as the figure proposed by the Business Roundtable, which would have little environmental effect and would not act to discourage more fossil-fuelled thermal electricity in any meaningful way.

I ask the Minister to take a call and explain why it is necessary to have such an early date for this legislation to come into effect, and to say whether he has considered having an assent date that is after the date when the select committee reports back on whether we should have an emissions trading scheme, or after the date on which we have certainty as to whether we will have a market price on carbon. As the Minister has said in his remarks at an earlier stage, he and his Government are relying on that price of carbon to discourage more fossil fuel - based generation and to instead have renewable generation. I just cannot understand, unless I have some explanation from the Minister, how it can be that we can rely on a price of carbon that does not yet exist.

This also links back to the date on which the Electricity Commission loses its investigatory powers. Allied to those investigatory powers is the public right of participation in these decisions, because under the current law the commission has to publish notice of its intention to do something and to give a reasonable opportunity to let people express their views, and then it must have regard to those views. It seems inappropriate that those rights are being taken away.

HodgsonHon PETE HODGSON (Labour—Dunedin North) Link to this

Right through this debate there has been one argument that the National Government could have put in favour of the Electricity (Renewable Preference) Repeal Bill, but has not. The idea came up in this stage of the debate: the former Minister of Energy, the Hon David Parker, put his finger on it. One way of describing the argument that the Government should have come up with in support of this legislation, but has failed to, goes like this: why would one bother to have a moratorium on fossil fuel generation when the emissions trading scheme is coming? Why would one do that when the electricity system is to face a marginal charge for carbon dioxide? What would be the point of having a moratorium in addition to that?

Right through this debate the National Government has not adduced that argument; it has simply not thought it through. If I were in the Government I would argue in favour of the legislation that is before members by saying that it is belt and braces. Why would one need both? When it comes to the commencement clause, we need the belt at one point and braces thereafter—or, if you like, braces at one point and the belt thereafter. Sooner or later, the stationary engine sector will come into the emissions trading scheme; it is scheduled to come in on—

HodgsonHon PETE HODGSON Link to this

—1 January 2010. That is 12½ months from now. Maybe the commencement date should be 1 January 2010 or—just to be a little more careful, because a high-level select committee is going on and some people in this Chamber think that that means there is a lot of time to do not very much at all—we could have a commencement date of “1 January 2010, or at the inclusion of the stationary engine sector into the emissions trading scheme, whichever comes later”. One could do it that way.

I wonder whether the Minister would like to take a call and pick up the thoroughly good bit of logic put forward by my colleague the Hon David Parker. I wonder whether he would like to take a bit of help from the Opposition—which has finally come up with a good reason why one might want this legislation—and use the belt and braces argument. He could use the commencement clause to ensure that we have one and then the other, but never both. I wonder whether the Minister is tempted to rise from the chair and take a call to explain whether he thinks that logic has any fault in it.

It seems to me that there is no intellectual grunt behind the Government’s position. We are offering it some. I will do so again. One does not need both belt and braces. Let us have the belt for the moment and braces thereafter. Why do we not do that through the commencement clause? Why cannot the commencement clause read: “will come into law on 1 January 2010, or at the arrival of the stationary engine sector into the emissions trading scheme, whichever comes later.”? Then, if the Government needs a bit of extra time with its high-level select committee, nothing is lost—the moratorium remains in place until it is replaced by the marginal cost of electricity generation inclusive of the cost of carbon dioxide.

There is a certain magic to that idea—certainly we think there is—and we wonder whether the Minister, if he can stop yawning long enough, would like to get to his feet and tell us what he thinks might be wrong with it. Did he get it or shall I go though it a third time?

CunliffeHon DAVID CUNLIFFE (Labour—New Lynn) Link to this

It is appropriate to be debating the title clause of the Electricity (Renewable Preference) Repeal Bill. It is hard to understand how anybody could not have a preference for renewable energy, as opposed to the counterfactual—that is, energy that is not renewable and energy that will not be available for our grandchildren.

I am not a paid-up member of the Green Party, but I agree with its members that we face peak oil prices at some point. Even foreshadowing constraint, we live in a time when oil prices have reached US$150 a barrel. How long will it be before it is US$200 a barrel or US$400 a barrel? The long-run average trend is up, and against that background that will, of course, drag up the price of other fossil fuels, such as coal and other substitutes—

CunliffeHon DAVID CUNLIFFE Link to this

Gas. In that kind of world, what is really important is that New Zealand, as an energy-dependent country, is well stocked with alternative energy sources. So it is absolutely vital that we create the incentives now, because of the long lead times that are required to bring in this production.

It is also the case that because of the good work of the Hon David Parker and the outgoing Government, there are enough megawatts of capacity and renewable energy in store in the next few years to provide for the growth in baseload and peaking demand. That means that the renewable energy preference policy is working as it was planned and foreseen to do. But it worked only because the Labour Government had the fortitude to send a clear signal to the market, and the market cannot internalise that which the participants do not personally bear. The market cannot internalise the benefit to society of having a long-term plan for energy that is sustainable and protects our security. The market can only take to book the benefits that are relevant to each individual company.

Therefore it follows that clear Government leadership is required, and therefore in a fossil fuel - constrained world it follows that that policy was good, which brings us to the reason why we are here. Why on earth would we do this? Why on earth would we remove a preference that makes all the sense in the world? Nick Smith is smirking. I wonder why Dr Smith is smirking. He has a PhD, and he should be able to work out that this legislation is a giant act of shooting oneself in the fossil fuel foot.

This policy does not actually have any relevance to the language in the explanatory note of the bill, which conveys that the legislation is somehow related to the emissions trading scheme. Let us just stand back and think for a second about why we have an emissions trading scheme. The emissions trading scheme allows our economy to adjust at a least-cost price path for any given level of carbon emission constraint. So at whatever level at which the Government would like to see us pumping soot into the atmosphere—whatever level Rodney Hide thinks would be OK—the cost of adjustment will be lower under tradable emissions. David Carter may laugh. The member represents the agricultural community, I believe.

ChadwickHon Steve Chadwick Link to this

I raise a point of order, Mr Chairperson. I noted that the Minister in the chair, David Carter, was very keen to take a call as he interjected on the previous speaker. We are very happy for him to take a call. We note that he has not yet done so in the Committee stage.

BarkerThe CHAIRPERSON (Hon Rick Barker) Link to this

That is not a point of order; the member knows that. I would remind the Minister that it is accepted practice not to interject from the Minister’s chair, because he or she has access to a live microphone. I ask the Minister to restrain himself.

CunliffeHon DAVID CUNLIFFE Link to this

It is therefore very hard to imagine why the National Party in Government would want to impose change on New Zealand that at any given level of emission reduction would cost our economy more, when tomorrow it will announce significant increases to Government debt, a forecast track for higher unemployment, a forecast track for more difficult—

SmithHon Dr Nick Smith Link to this

That’s your legacy.

CunliffeHon DAVID CUNLIFFE Link to this

No, no. [ Interruption] I raise a point of order, Mr Chairperson. You are doing a great job as the Chair. I do not believe that anything the previous Government has done is “your” legacy.

BarkerThe CHAIRPERSON (Hon Rick Barker) Link to this

I respond to the member by saying that that is not a point of order, because the interjector does not have the call. It is the speaker with the call who should not bring the Chair into the debate. The only reason that that interjector is now in the debate is that the member has made mention of him. Had the member ignored the interjection, the person would not be in the record. The member has 59 seconds to continue.

CunliffeHon DAVID CUNLIFFE Link to this

Is it not interesting that that member is still smirking? He is smirking about an international environment that is getting worse by the day. I understand the latest projections are for Chinese growth in the coming year to fall as low as 2 percent. And David Carter smirks. That member purports to represent agricultural producers, whose livelihoods will be negatively affected.

I ask Mr Carter whether this is just the arrogance of new-found office—is that what it is about? He is a member from a sector that is characterised by high emissions of methane, of nitrous oxide, and of other greenhouse gases that will be hugely affected if this bill goes through.

HutchisonDr Paul Hutchison Link to this

Have you got any solutions?

CunliffeHon DAVID CUNLIFFE Link to this

Yes, we have solutions. One of those solutions is to ensure that we are able to have renewable energy flows, which means that we can adjust with the least disruption to our economy.

CarterHon DAVID CARTER (Minister of Agriculture) Link to this

I move, That the question be now put.

HipkinsCHRIS HIPKINS (Labour—Rimutaka) Link to this

It is somewhat ironic to be rising to speak on the Electricity (Renewable Preference) Repeal Bill when we have had such a lack of energy from the Minister in charge of it, Gerry Brownlee. In fact, I do not think he has taken a single call on this bill, which is in his name—not a single call to speak on this bill. He got an exemption! Do members think he would be eligible for an exemption—

Hon Member

Thermal generation!

HipkinsCHRIS HIPKINS Link to this

—for thermal generation?

I am very happy to rise and speak on the title clause of this bill and to offer other potential titles. I thought maybe we could call it the “Climate Change Denial Bill”. But then I thought maybe we could call it the “Climate Change Denial Bill No. 2”.

HipkinsCHRIS HIPKINS Link to this

Maybe even No. 3. The bill that we were debating immediately before this one, the Energy (Fuels, Levies, and References) Biofuel Obligation Repeal Bill, would be “Climate Change Denial Bill No. 1”; this bill would be “Climate Change Denial Bill No. 2”.

I am a bit confused as to where Government members stand on climate change. I know that they are taking a balanced approach: on one day they say it is a hoax, and on another day they say that of course they have always believed in climate change. Then they seem to come back again and say that it is a hoax. So I am a bit confused, and I imagine that anybody listening at home would be a little bit confused as to the Government’s actual views on climate change.

I notice that the Minister for the Environment, Nick Smith, is suddenly very quiet. Clearly he has been railroaded by the other members of his party. Maybe that is another potential title for the bill: it could be the “What Happened to the Bluegreens Bill”.

SmithHon Dr Nick Smith Link to this

It was in the Bluegreens policy.

HipkinsCHRIS HIPKINS Link to this

Was it in the Bluegreens policy?

HipkinsCHRIS HIPKINS Link to this

Is that right? So how is that possibly—in any way, shape, or form—green?

Hon Member

It’s blue.

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