12. Hon Dr NICK SMITH (National—Nelson) Link to this
to the Minister of Energy
Why has the price of electricity increased by over 39 percent since Labour became the Government in 1999, and what changes in Government policy, if any, will be made to provide additional renewable energy?
Hon DAVID PARKER (Minister of Energy) Link to this
Because the so-called reforms of the previous National Government have not resulted in the decrease that residential users were promised at the time. In real terms—that is, adjusted for inflation—the increase over the last 7 years has averaged under 3 percent and totalled 18 percent.
No, it is absolutely true—in fact, I will repeat it for the benefit of the member, because it is true. In real terms—that is, adjusted for inflation—the increase over the last 7 years has averaged under 3 percent per annum and totalled 18 percent. Government proposals to improve electricity market arrangements in order to put downward pressure on prices will be announced with the New Zealand Energy Strategy. This strategy will incorporate a range of measures to support the development of additional renewable energy resources, including details of a previously signalled “cap and trade” option.
Hon Dr Nick Smith Link to this
Is the reason that New Zealanders have faced huge power price hikes not that this Government, through its electricity State-owned enterprises—as noted yesterday—has made a profit of over $1.1 billion, so that New Zealanders are being fleeced by this Government not just with high taxes but also with excessive power prices?
Charles ChauvelThe New Zealand Energy Strategy is expected to be released in draft next month, for consultation. I have no doubt that this strategy will provide New Zealand with a cost-effective, reliable, and environmentally sustainable energy system that New Zealanders will be proud of for decades to come.
Metiria TureiWhat is the Minister’s view of today’s High Court decision that the climate change effects of Mighty River Power’s Marsden B coal-fired power station project may be considered in granting its consent—a decision that overturns a previous Environment Court view—and is he pleased that this should spell the end of new fossil fuel - burning energy projects in New Zealand?
I have not read that decision, so I cannot comment upon it. But it has been made clear by the Government for some time that we prefer and promote renewable alternatives over more thermal generation, which produces greenhouse gas emissions.
Peter BrownNoting that previous answer, does the Minister agree that if technology relating to the storage of carbon dioxide was on stream, New Zealand would have the ability to turn our vast coal reserves into enough electricity to power New Zealand for over a thousand years at very reasonable cost; if so, what is the Government doing to assist research into developing carbon storage technology, to help provide for our future needs?
A couple of points there. I agree that if carbon capture and sequestration becomes cost-effective and proven technology, the world needs to look at adopting it. It is more important for the rest of the world than it is for New Zealand. The advice I have received is that our renewable alternatives are likely to be cheaper than the use of coal with carbon capture and sequestration.
Hon Dr Nick Smith Link to this
Does the fact that the electricity companies owned by the Government doubled their profits to over $1.1 billion confirm the statement by Roy Hemmingway that the reason he was sacked was that he was an independent commissioner who was prepared to stand up against the Government State-owned enterprises in the interests of consumers?
Hon Dr Nick Smith Link to this
Has the Minister noted in the annual report yesterday from Meridian Energy that it endorsed National’s idea for a “cap and trade” system for greenhouse gases, endorsed National’s ideas for reform of the Resource Management Act, and endorsed National’s ideas for transferable water permits; and now, having had New Zealand’s largest electricity company endorse those three significant policy proposals from National, why does he not listen to National and accept that we have got it right?
I do note the comments that Dr Turner has made, and I agree with virtually all of them. I disagree with the National Party’s characterisation of them as reflecting long-term National Party policy. Indeed, it is only in the last week that National has at long last signalled support for Government policy relating to price-based measures in the electricity sector.
Hon Dr Nick Smith Link to this
How can the Minister say that Dr Keith Turner is supporting the Government’s policy, when Dr Turner specifically criticises the Resource Management Act in his annual report, saying that delays in the Project West Wind proposal have added $90 million to its costs, and advocating strongly for direct referral to the Environment Court, which National has long promoted?
Again, the member over-simplifies. I also note from that report Dr Turner’s express approval of the changes the Government has made to the National Government’s prior electricity policy settings—namely, the most recent amendments we have made to the Government policy statement, and to the section 26 notice to the Commerce Commission, both of which will encourage renewables.
Hon Dr Nick Smith Link to this
I raise a point of order, Madam Speaker. My question was quite specifically about Dr Turner’s comments in respect of the Government’s resource management policy and direct referral. There has been no comment at all on that, and the fact is that Project West Wind has gone up by $90 million in price as a consequence of delays. I ask the Minister to address Dr Turner’s concern about the Government’s resource management policies.
Madam SPEAKERI am very happy to, because I have the answer for Dr Smith. In respect of the pricing of the Project West Wind proposal, that price increase is caused by changes in exchange rates and steel prices.
No, it is not delays caused by the Resource Management Act processes. The delays that are encountered in consenting New Zealand power stations are no different from those experienced in most developed countries. The Resource Management Act is not the bugbear that the member would like to present it as; it is a necessary part of a developed country where we want to minimise environmental effects.