Fitzsimons Jeanette: Climate Change (Emissions Trading and Renewable Preference) Bill — In Committee 
Fitzsimons Jeanette: Climate Change (Emissions Trading and Renewable Preference) Bill — In Committee 
[Volume:649;Page:18174] 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 The member says that if we put a moratorium on generation people do not know where they stand. Actually the reason we do that is precisely so people do know where they stand and we have some clarity about the future. There are three issues that we need to deal with here and I want to cover all of them briefly. Firstly can we maintain security of supply while building only renewable power stations? Secondly why will just putting a price on carbon not achieve that all by itself without any further action? Thirdly if we do want to do it will this legislation achieve that purpose? 
I will start with the question of security. The Energy Efficiency and Conservation Authority and the Ministry for Economic Development modelled very carefully how far we could get with renewable energy before price and security started to be compromised. The clear end point was 90 percent. We could do 90 percent with very little effect on the electricity price because there are a lot of low-cost renewables available and we could do 90 percent without compromising security of supply. If we simply look at what is being built at the moment we see that we have 4000 megawatts of electricity capacity under construction consented to and about to start or in the consenting process. That is a huge amount of new capacity and all of it is renewable. Large parts of it are geothermal which are baseload and are more reliable than any of the other technologies including gas and a considerable part of it is wind which is backed up by our very reliable old hydro. Security of supply once the Cook Strait cable is fully operating again is simply not an issue. Actually to the extent that the Cook Strait cable compromises security at the moment that is not a matter that we can fix by building thermal power stations. 
When we look at why we need this part at all we have heard people say—and I know that Treasury is also of this view—that as long as there is a price on carbon we do not need any restriction. People will simply do what is cost-effective. Let us have a look at this. There are hundreds of millions if not billions of dollars of opportunity in the New Zealand economy to reduce energy consumption at less cost than the cost of buying it. But it does not happen. If a price is all we needed to incentivise action why is it that for the whole of my lifetime—and still—there have been huge opportunities for saving energy that cost nothing but people still do not take them? In fact it is well known in the international literature that a price on carbon is part of the equation and the rest of it is what are called complementary measures which in my view are the majority of the measures that we need. It is a mixture of information regulation codes standards and all the rest of it. Clearly if we have an interest in building gas-fired power stations and we do not have a lot of expertise in geothermal deployment and we happen also to be involved in drilling for gas and there is a gas supply and gas consumption issue to resolve then we are going to build gas-fired power stations even if they are not the most economical thing to build. It might pay one’s company personally if it has interests in gas but it will not be the most economical thing for the country. That is the sort of reason why we need a clear policy direction that from now on until we get to 90 percent we want to build only renewable electricity. 
The real question though is whether Part 2 of this bill will achieve that. With that I must say I have some problems. Part 2 states that we cannot connect a new baseload power station unless we meet one of this very long list of exemptions. I asked three different submitters at the select committee—two of them were power station owners—whether there is anything we could not build under Part 2. They said: “No that’s not the issue. The issue is it’s a nuisance to have to go and get consent to do it.” Three different submitters admitted that the exemptions in Part 2 are so great that we can actually build anything we like. So the Green Party tried to get them tightened up a little bit. We did have some success at least around defining what is baseload and what is a peaking plant. We now have in the bill as reported back issues around the amount that a plant would run its efficiency and its start-up time which define a peaking plant. 
The section we could not make any progress with and which is the out clause for Genesis is new section 62G(1)(e) which says that if one is retiring some other fossil-fuelled plant then one can build a new one. Well everybody knows that Huntly is a very old plant. Huntly is the biggest greenhouse gas emitter. Huntly will eventually be phased out probably one unit at a time. It will probably be providing back-up or reserve capacity for quite a while but hardly running and it will eventually be phased out all together. We have already built two gas-fired plants in this country on the promise that they would replace Huntly. The first one was the  
Taranaki combined-cycle power station 
 and everybody said it would improve greenhouse gas emissions because we would run efficient gas in Taranaki instead of coal at Huntly. Of course we ran both. The next one was e3p on the same Huntly site. We were told that that would reduce emissions from the Huntly site because we would run the gas plant instead of the coal plant. What are we doing? We are running both—and flat out too I must say. So let us not pretend if Genesis builds a 500 megawatt plant—which would be the largest gas-fired plant in the country—up on the Kaipara in Rodney that it will be doing it to back up Huntly on coal. It will only back up Huntly on coal either when it is told to or when coal gets so expensive that we cannot afford to run it any longer. 
The section that says that as long as one is retiring some other plant one can build a new one—new section 62G(1)(e)—will not take us to 90 percent renewable because to get to 90 percent renewable we actually need to close down both Huntly and another existing gas-fired plant and not replace them assuming the normal projections of growth and demand up to 2025. We can do it—the renewables are there the renewables are cost-effective and the renewables are being built. But if we let people come in and build thermal plants in the meantime they will crowd those renewables out of the market. If there is a great big ugly gas-fired plant just sitting there waiting to run nobody will build wind power plants and nobody will build geothermal power plants. We need to intervene in the market from time to time to make sure we send it in a direction that is economic for the country—secure for the country—but not necessarily in the private financial interests of whoever wants to build power stations. 
The Green Party supports the renewable preference provisions. We are very sad that we were not able to tighten them up a great deal more than what is here now. We are sad that Genesis when it came to the select committee expressed an obvious intention to just go ahead and build the thing and run it anyway and we hope that its shareholding Ministers will put the brakes on when it gets to that point.