Key Points:

The new Government has scrapped another Labour climate change measure - passing legislation today that repeals restrictions on the building of new coal and gas-fired power plants.

But Greens co-leader Jeanette Fitzsimons today labelled the move a retrograde step, which shuts off one of the easiest ways New Zealand could reduce its carbon emissions.

The two-page Electricity (Renewable Preference) Repeal Bill passed its third reading by 63 votes to 58. It was opposed by Labour, the Greens, the Maori Party and the Progressives.

If follows legislation yesterday removing the obligation on fuel companies to include a biofuel component in petrol and diesel.

The previous Labour government put a 10-year ban on new coal or gas-fired baseload power generation, under most circumstances, through its emissions trading scheme (ETS) legislation.

But National campaigned on repealing the ban, which it said would reduce the security of New Zealand's power supply. It passed the new law under urgency.

Energy Minister Gerry Brownlee said the ETS put a price on pollution, providing adequate incentives for power companies to invest in renewable generation.

But Ms Fitzsimons said New Zealand's per capita emissions were about five times the global average and electricity generation and urgent measures were needed to reduce them.

Power generation contributed about 10 per cent of the country's emissions and was one of the easiest things to clean up because of the abundance of renewable options.

"Let's tackle what's easy first. Let's tackle the emissions that you can reduce at virtually no cost and with virtually no other downside."

She said gas-fired power stations were built to use gas from the Maui field, which was now almost completely used up.

That would result in a rise in the price of gas, while at the same time the cost of geothermal and wind power was dropping.

She said officials had told the previous government a target of 90 per cent renewable energy could be reached - up from about 70 per cent at the moment - with "negligible cost".

However, that target would only be reached if new gas power stations were only used to generate electricity at peak times rather than used for "baseload" 24 hours a day.

But Mr Brownlee said in recent winters during rainfall shortages in the hydro lake areas, coal and gas had produced over half of the country's power.

"Without those two fuels the lights would not stay on."

He said power generators and lobby groups including the Business Council for Sustainable Development had opposed the ban.

He said modern gas-fired stations gave off few emissions and could run around the clock generating large amounts of electricity.

The ban also disincentivised gas and oil exploration in New Zealand as there were fewer outlets for gas sales.

He said the Government remained committed to an overall 90 per cent renewable electricity target.

But Labour's former climate change minister, David Parker, said Mr Brownlee's reliance on the ETS to incentivise renewable electricity was ridiculous because the new government was reviewing it - removing any certainty about its future provisions.

He also attacked Mr Brownlee's claims about security of supply, saying there were already exemptions in the moratorium if a new power station was needed for security of supply or if it replaced older more polluting generation.