Energy Minister Megan Woods says the government "won't die in a ditch" if its goal of 100 per cent renewable electricity generation isn't reached by 2035.
The "challenge" of meeting its ambitious target had been well-signalled, she said, adding that the government could be both ambitious and pragmatic.
"We are confident we can get to our 100 per cent renewable ambition, and are confident new technologies will be developed to help us get there affordably," she said.
"But we also want to signal we will be pragmatic about this goal and we won't die in a ditch over the last couple of per cent if it places unreasonable costs on households and puts security of supply at risk," Woods said in a statement.
She was responding to the long-delayed report of the Interim Climate Change Committee, which said having entirely renewable electricity generation would be too expensive without achieving the emission reductions possible from promoting electricity over fossil fuel use in industry and transport.
The ICCC report, which went to the government on April 30, recommends the country prioritise electric transport and the electrification of industrial heat processes rather than pursue the 100 per cent renewable generation goal. It found that under the current system, renewable electricity is on track to rise from 82 per cent of production to about 97 per cent by 2035 without further intervention.
Going from 99 percent to 100 percent renewable electricity by adding battery storage and more wind and solar plants for years when hydro-power is constrained would avoid only 300,00 tonnes of carbon dioxide equivalent emissions at a cost of over $1,200 per tonne, the committee's report said. That was "technically achievable," but "extremely expensive."
The 100 percent renewable goal was a major feature of the Labour-Green confidence and supply agreement but did not feature in the Labour Party's coalition deal with New Zealand First. National's energy spokesman Jonathan Young has said it should be abandoned.
Woods welcomed the committee's recommendations, saying the 100 percent goal was "aspirational" and that the government would put five-yearly reviews in place to manage the "energy trilemma of affordability, sustainability and security."
She said that work lowering process heat emissions and transport emissions was already being prioritised.
The committee's report pre-dated the government's decision last week to introduce a feebate scheme to encourage greater take-up of low-emission cars.
The committee recommended a 2035 target to reduce transport emissions that year by at least 600,000 tonnes against current levels, which the government says it will investigate.
Committee chair David Prentice said the government must act urgently to eliminate fossil fuel emissions, pointing out that kiwis tend to hold onto cars longer than in other countries, so every additional fossil-fueled vehicle imported into the country would be around for the next 10 to 20 years.
The committee also suggested imposing fuel economy standards on imported cars, financial assistance to encourage electric vehicles, the acceleration of charging infrastructure, and an eventual ban on fossil-fueled cars.
On generation, the committee said gas will remain particularly useful for managing dry-year risk, but that it cannot be relied on indefinitely.
Hydrogen may play a role, but is currently inefficient and expensive as a back-up fuel for dry years.
The committee recommended the government investigate pumped hydro as an option for managing dry-year risk.