9. CHARLES CHAUVEL (Labour) Link to this
to the Minister of Energy
Is he confident that there will be sufficient renewable energy to meet New Zealand’s demand for electricity over the next 10 years?
Hon DAVID PARKER (Minister of Energy) Link to this
Yes. We know our renewables are affordable. The Energy Strategy confirms the Government’s view that all new generation should be renewable except to the extent necessary to ensure security of supply. We already have 633 megawatts of geothermal electricity announced, consented, or in process. Geothermal energy provides great baseload electricity. To put that in context, demand grows by about 150 megawatts a year. Contact Energy today has announced 650 megawatts of wind power in the North Island and a 100-megawatt gas peaking plant. If we add up the number of renewable projects that have been announced or are in the consenting process, we see that it comes to a staggering 3,311 megawatts. That is more than enough for 10 years. New Zealand does have a competitive advantage in renewables, and we will seize that opportunity.
Can the Minister tell the House what measures the Government is taking to support its target of 90 percent renewable electricity generation?
To aid the transition to more renewables, we have sent a message to State-owned enterprises that we do not want more baseload thermal, and, also to that effect, we are considering an amendment to the Electricity Act. Together with this, we have a national policy statement coming on renewables under the Resource Management Act, and we have said we are going to use the call-in powers under the Act. Through this we will achieve our target of 90 percent renewables by 2025. I repeat, I have no doubt that with good Government leadership here, we will achieve this, and New Zealand will take advantage of what is our natural endowment.
Gerry BrownleeWhy, in justifying the Government’s moratorium on new thermal generation, did the Minister tell the New Zealand Herald that “It’s a fiction that building more thermal power stations reduces your long-term emissions,”, when only 2 months ago he defended the construction of Genesis Energy’s new thermal E3P plant by saying: “In fact, E3P is likely to back off Huntly and reduce and lower emissions.”; why would that not be the case for the proposals in Rodney that Genesis had, and would that not have meant that Huntly would have backed off even further, meaning our emissions from electrical generation would have been further lowered?
I have never, ever said that building more thermal reduces one’s total emissions long term; it does not. New—
Hon Dr Nick SmithI did not, Dr Smith. I was very careful about what I said. What it does do is, year on year, decrease our emissions, because of course in the short term we replace coal with gas. But if we build more thermal, it lasts for decades. It actually results in higher emissions than if we build renewables instead—
Peter BrownWith the advent of a “cap and trade” emissions system, and in order to encourage renewable energy, is it possible that customers of Genesis Energy in the future will pay more for their power, simply because Genesis Energy generates a significant percentage of its power from coal and gas?
No, it is not, because the market works to dispatch all energy at the same price. The market price is set by the marginal cost of electricity generation; so Genesis Energy customers, or, indeed, customers of any company, will not be disadvantaged in particular.
Why did the Minister ignore the advice of the Ministry for Economic Development’s energy division, which said in the analysis document that accompanied the New Zealand Energy Strategy that prolonged deferment or prohibition on the development of thermal energy plants could see existing, very, very dirty plants have a prolonged life with refits that otherwise would not have happened, thus failing to mitigate the very heavy emission we have from the electricity sector?
The ministry and the member do make a valid point. That is one of the issues we have to take into account—whether if we have a ban on more baseload thermal, our old thermal runs longer. There is an argument that it does, but that argument is outweighed by the reality that in the case of New Zealand, we have abundant sources of renewables that are available at an affordable price that will reduce emissions more by replacing old thermal with renewables, rather than with more efficient thermal.