The government will invest $27 million to establish a new energy centre in Taranaki as a gesture towards assisting the region's transition from a multi-billion dollar oil and gas industry to a low-carbon economy.

Prime Minister Jacinda Ardern announced the long-anticipated initiative as she opened the Just Transitions Summit in New Plymouth – a two-day event organised in direct response to the backlash created by the government's decision in April last year to ban further offshore oil and gas exploration.

"The National New Energy Development centre will help create new business and jobs in Taranaki while helping New Zealand move towards clean, affordable, renewable energy and away from fossil fuels," Ardern said.

"The centre will look at the full range of emerging clean energy options such as offshore wind, solar batteries, hydrogen and new forms of energy storage."


However, the centre will not itself conduct research. Rather, it will "coordinate and support opportunities for new energy technologies to be tested and further developed for commercial or larger-scale use," notes accompanying today's announcement say.

Its leadership and exact location have yet to be established for an initiative suggested by local economic development agency, Venture Taranaki, in a region with no university-level educational or research facilities and local heavy industry heavily skewed towards hydrocarbons and agriculture.

Funding for the centre is part of the government's first Well-being Budget, to be unveiled in full on May 30.

The Budget will also commit $20 million over four years to establish a new science research fund "for cutting edge energy technology so that we can look into the likes of organic photovoltaics, superconductors, nanotechnologies and inductive power," Ardern said.

Among projects understood to be under consideration for funding, possibly through the Provincial Growth Fund, are two wave power projects. While wave-generated electricity technology is currently very expensive, New Zealand may become a centre for investigating the engineering and physics challenges posed by harnessing the energy in the ocean in the longer term.

Also before the Cabinet at present is a proposal for the PGF to back with up to $20 million of funding a natural gas-based proposal using new technology from the US-based Eight Rivers company to produce urea and hydrogen. It faces hurdles as ministers weigh up the technology's low-carbon characteristics against the fact that it nonetheless is based on the ongoing use of Taranaki-sourced natural gas.

No representative of Eight Rivers is presenting at the Just Transitions summit, although the chief executive of New Zealand's largest oil and gas producer, Todd Energy, will participate in a panel discussion.

However, the new energy centre's doors are not completely closed to new technologies that use hydrocarbons.


"While the centre and its future project partners will predominately support a wide range of renewable energy options, there may also be opportunities to explore how existing petroleum infrastructure and technologies could be repurposed to support new energy initiatives," notes to the announcement say.

Ardern said the centre will operate on "pledges of collaboration and support from the energy sector, research organisations and supply chain businesses – both local to Taranaki and from around the world."

"This centre will complement our investments in hydrogen, Green Finance Ltd, the Zero Carbon Bill and our upcoming renewable energy strategy to help New Zealand create new jobs in new industries while moving away from fossil fuels that cause climate change," she said.

- BusinessDesk