The Green Party's new energy policy has won a cautious vote of support from the business community.

Business New Zealand said it was delighted the party had dropped its policy of creating a single electricity buyer and replaced it with more thoughtful proposals.

The Greens announced the policy in Wellington today. It reiterated the party's goal of 100 per cent renewable electricity, laid out plans to phase out fossil fuel generation, and would require power and lines companies to be more accountable and innovative.

It marked a change of direction from the joint Labour-Greens policy announced in 2013, which would have abolished the wholesale electricity market and replaced it with a single buyer charged with deciding how much power companies would be paid for their electricity.


Green co-leader James Shaw today denied the NZ Power policy was scrapped because it was unpopular. He said technology had changed so much since in the past four years that it was no longer necessary.

"The economics of renewables are changing dramatically. The price of batteries in particular has come down.

"You're seeing companies like Vector in Auckland which are investing significantly in rooftop solar and battery technology rather than poles and wires."

The Greens still plan to place new scrutiny on the wholesale electricity market by launching an independent investigation into the sector. This would look into barriers for smaller, innovative players entering or competing in the electricity market.

The party also wants to shake up lines companies, saying transmission and distribution charges have risen twice as fast as generation costs and make up a disproportionate amount of power bills.

It says 29 lines companies is a lot for a small country, and it wants them to consider mergers if this will save costs. However, energy spokesman Gareth Hughes said companies will not be forcibly merged.

Lines companies will also be required to consider new technologies such as battery storage as an alternative to traditional "poles and wires" distribution.

Business New Zealand head of energy policy John Carnegie said the new policy was a "thoughtful reassessment of the NZ Power proposal".


"They're working with us and the rest of the sector to get their views on board. We think it's a steady, solid return."

He was less certain about proposals to ban new fossil fuel generation in a bid to reach the 100 per cent renewable goal, which he said "pushed the edges a wee bit".

Hughes said the goal did not necessarily spell the end for the coal-fired Huntly Power Station or other fossil fuel plants.

Thermal power stations would still be used as a back-stop, he said.

"If there is a drought year, we may need to rely on some fossil fuel generation. The Green Party is okay with that."



The Greens will also require larger electricity retailers to reduce peak demand for electricity, partly by making them offer "time of use" pricing to customers.

"Currently, the vast majority of consumers are on flat tariffs, which do not vary throughout the day to reflect the underlying costs of the system," a policy document said.

Companies will instead have to offer different prices for different times of day, to better reflect the costs of generation.

The Greens will make power companies clearly spell out what each dollar of a power bill is paying for; a move which it believes will encourage people to adopt energy-saving technology.


Households earning less than $50,000 would get a discount on their winter power bills under the Green Party's energy policy.


Aucklanders would get subsidies worth $52 a month between May to August, while people in colder regions such as Christchurch would get payments of up to $82 a month.

The initiative would extend to 520,000 households and cost around $112 million, which the party says could be covered by dividends from state-owned power companies.

Public health expert Philippa Howden-Chapman, from the University of Otago, said a quarter of New Zealanders could not heat their house for less than 10 per cent of their income.

At the same time, electricity prices were rising faster than any other country in the OECD, she said.

There was a "very, very sad causal chain" between people being unable to afford electricity and hospitalisations for illnesses related to cold, damp homes.

"There is no reason in a country which such renewable energy resources we can't do something about this and quickly."