Editorial: Laudable unity on energy goals

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Broad long-term agreement on energy matters is a decided plus for a country that has become uncomfortably accustomed to the threat of power shortages. The National Party's support yesterday of the Government's 2007 energy strategy, notably the target of 90 per cent renewable electricity generation by 2025, and an emissions trading scheme is, therefore, welcome. This is not an instance where the National Party should be criticised for saying 'me, too'. Security of supply is too important for that.

National has correctly identified that the major obstacle to such security is the lack of clear and consistent rules to encourage power companies to invest in new water, wind, geothermal, tidal and other renewable generation. Its major remedy is an urgent reworking of the Resource Management Act. It would introduce priority consenting for large power projects, as well as streamlining the working of the act and putting an end to frivolous objections. Priority consenting would mean consents would be "called in" and determined centrally, and a decision would be made within nine months. Other details have not been announced, and National must ensure the balance does not swing too far against community interests.

One way or another, however, big and overdue changes to the act seem inevitable.

As much was indicated by the Ministry for the Environment's proposed national policy statement for renewable energy generation, which was also released yesterday. It found the act did not clearly establish the significance of the benefits of renewable energy projects. This, it said, had not only discouraged and frustrated development but created the risk that not enough renewable capacity would be built to meet growth in demand and the Government's 2025 target. Already, that danger is apparent. Investment in new generation has been too low and the overall price of electricity too high.

If there is variance between National and the Government, it is over the rate of growth in demand. National believes this is being underestimated, thereby threatening security of supply. That has led it to overturn what it called the Government's ban on new base-load thermal power stations. The ban was, however, always qualified. A new thermal station was to be permitted if the Electricity Commission thought it necessary to maintain security of power supply.

National's backing for gas-fired stations is, arguably, prudent, but there is a threat of unintended consequences. First, it scrambles somewhat the clear policy settings in favour of renewable energy generation that the party says it is determined to provide. Secondly, gas supply is becoming problematic as the Maui era ends. If no sizeable local replacement is found, power stations will have to be fuelled by imported liquified natural gas, the price of which is tied to the international oil market. Reliance on that market would mean being hostage to the pricing and exchange rate swings. National would seek to avert that prospect by encouraging more exploration and investing $25 million in seismic work over the next three years. Neither offers any sort of cast-iron guarantee.

The development of wind power and other sources of renewable generation is the more preferable course. Investment will flow that way if power companies have clear and consistent environmental rules. Gas-fired generation may yet be needed as a short-term salve. But it is the likes of Contact Energy's plan for a big windfarm on the Waikato coast that represent the optimum means of achieving security of supply while meeting this country's international obligations. It helps that, finessing aside, both major parties recognise as much.

- NZ Herald

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