Key Points:

The third dry winter in a decade has thrown the spotlight on the security of electricity supply this election, where the key difference between the parties is where they stand on allowing new gas-fired power stations.

Labour and the Greens argue that more renewable generating capacity in the pipeline will meet the shortfall and conservation measures will reduce demand. Energy Minister David Parker says generators were able to manage their way through the driest winter in the south for 60 years without the lights going out.

National, though, highlights our dependence on the naturally unstable hydro resource - responsible for nearly two-thirds of our electricity - and points out that the country is hugely reliant on burning coal and gas to get us through winter, so why have a 10-year ban on new gas-fired baseload power stations?

During winter the Electricity Commission's emergency power station at Whirinaki was running almost continuously some weeks.

National's energy spokesman Gerry Brownlee argues that as soon as Whirinaki is feeding the grid, it drags the spot price up to the high cost of running the plant.

Final figures on the cost of the power shortage are not yet available but will run into tens of millions of dollars at least.

Spot market users, including the Tiwai Point aluminium smelter and wood processor PanPac, slashed production for weeks and business groups say investment has been deferred because of recurrent tight winter supply.

"The reality is New Zealand relies on gas for security of electricity supply," said Brownlee when releasing his party's policy. "Gas plants like the highly efficient e3p plant at Huntly can run around the clock. If the wind stops blowing and the water stops flowing, gas just keeps going."

But Parker will not be swayed on the baseload ban as part of the drive for 90 per cent renewable energy by 2025.

"If you built a couple of gas-fired stations, all of a sudden we'd be going down the thermal route rather than renewables ... Let's just commit ourselves to renewables like our forebears did."

The outlook for gas supply has brightened with reassessment of gas reserves but Parker maintains there's now not much between it and the cost of renewable generation, mainly windpower, for which there are applications for power stations already lodged up and down the country.

Under pressure from the Greens, the Government has set up a $1 billion fund to insulate houses after retrofitting 50,000 homes during the past five years.

The Resource Management Act has also been a big target: opponents are angry at the number of unrelated parties slowing the process to a crawl.

Brownlee says the law will be streamlined. Parker says it has, for the most part, worked.

"I'm personally a defender of the RMA, not to say there aren't areas where it could not be run more efficiently, but overall it's a fine piece of principled legislation," Parker says.

Green Party co-leader Jeanette Fitzsimons describes National's energy policy as financial madness. Fitzsimons says it ignores the biggest energy problem - transport fuels and the rising cost of oil - and relies on drill and hope.


Main party policies vary by degrees, with the exception of the thermal generation moratorium and their approach to the Electricity Commission.

The commission was set up five years ago and over the next year will levy consumers around $90 million. National has promised a "review with one possible outcome being disestablishment".