Prime Minister Christopher Luxon, Energy Minister Simeon Brown and RMA Reform Minister Chris Bishop announced today the Government would legislate consents for an LNG terminal.
Luxon said severe shortagesin the past few weeks have pushed energy prices up to some of the highest levels in the western world. He described the previous government’s ban as “reckless” and combined with some of its other policies, including the Lake Onslow proposal, had created the “perfect storm”.
Brown has previously said that LNG could be used to reduce energy supply issues and put a lid on price spikes.
He said there would not be a market study but the government would look at the regulatory regime and ensure retailers were delivering competitive prices.
Brown urged Labour to “back these changes” so the energy section issues would be addressed.
Bishop said recent changes to the Fast-Track Approvals Bill and the RMA were part of the steps the government was taking to address the issue in the energy section.
Information released with the announcement today said that imported LNG would “support flexible generation of electricity, but is unlikely to replace the energy needed from stable, year-round, domestic gas”.
Officials estimate the price for importing LNG to New Zealand using the spot market could be between $17/gigajoule and $24/gigajoule.
That price range is below the current NZ gas spot price which traded at an average of $55.27/GJ on August 14, an all-time high.
Project-specific legislation has been utilised previously, including for projects such as the National War Memorial in Wellington.
Energy Minister Simeon Brown, RMA Reform Minister Chris Bishop and Prime Minister Christopher Luxon attend the post-Cabinet press conference in Wellington. Photo / Mark Mitchell
The Government reiterated its commitment to reverse the offshore oil and gas exploration ban, which they hope will mean more domestic gas.
Other announcements included allowing lines companies to own more generation. Electricity distribution businesses (EDBs) are currently prohibited from owning generation assets of more than 50MW connected to their own network, and are also required not to own assets of more than 250MW connected to Transpower’s network.
The Government has agreed to ease these restrictions to increase electricity generation and bolster regional resilience. Details will be confirmed by Cabinet later this year.
The Government is also receiving advice on whether to allow draw-down of hydro lakes below their consented levels. This would mean giving generators permission to pull even more generation out of hydro lakes. If changes are needed, then they will be progressed through the Energy and Electricity Security Bill ahead of winter 2025.
Brown also said the government will review the performance of the electricity market. Brown has been critical of the amount of investment in generation, telling Q&A over the weekend, “we haven’t seen as much investment back into generation as we should have from the gentailers”.
Bishop announced the Government was delivering on its Electrify New Zealand manifesto commitment.
He said the Government had agreed to legislate to reduce consent and re-consenting processing time for most renewable energy consents to be within 1 year, as well as extending the default lapse periods for renewable energy, transmission and local electricity lines consents from 5 years to 10 years.
The Government will extend the default consent duration for renewable consents to 35 years.
The Government will also introduce a Bill to enable a regime for offshore renewable energy to be in place by mid-2025 with the aim of opening a first feasibility permit round in late 2025.
This regime will give developers greater confidence and certainty to invest and will enable the selection of developments that will deliver the most benefit for New Zealand.
