Hodgson Pete: Electricity (Renewable Preference) Repeal Bill — First Reading Second Reading In Committee Third Reading 
Hodgson Pete: Electricity (Renewable Preference) Repeal Bill — First Reading Second Reading In Committee Third Reading 
[Volume:651;Page:898] 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 The Government is continuing its assault against progress. It started last week with the removal of the research and development tax credits—that was the opening bid—and we also learnt there will be no action on the emissions trading scheme any time soon. We are sending that legislation off to a so-called high-level select committee. Then earlier today the biofuels industry had its ankles cut from underneath it which will mean a swag of disinvestment in that industry quite apart from the disinvestment that has already occurred in the forestry industry last week. And now the Government is saying it is time we should burn some fossil fuels to make electricity. The Labour Party will strongly oppose this bill because the legislation it repeals has a function to play and its removal will see the possibility of thermal generation being built that is unneeded and unnecessary. Let us be clear that the moratorium is against baseload thermal generation only. If any more peaking plants are needed in this country they can still be built despite the moratorium; it is baseload thermal generation to which the moratorium applies. 
Why does the moratorium apply? It applies for the simple reason that this country has an integrated electricity generation system involving predominantly hydro and thermal energy with increasing amounts of geothermal and wind energy. That integration is secured by a variety of Cook Strait cables and it is in balance now. It used not to be in balance; it used to be wildly out of balance depending on how far back in history one wants to go. I can go back quite a long way but the Max Bradford era will do. Max Bradford took the electricity generation system and turned it on its head. There was in effect a strike by capital for years to come. We had a strike by capital in the early part of this decade. We saw one thermal plant go on then we saw the five new generators/retailers duck and weave to see whether they could avoid capital investment until one of them came forward. Then another came forward but in the meantime we certainly started to run thin on the margins. 
Those margins are now in much better shape than they have ever been—or at least in the last 1½ decades that I can speak of. The degree of new generation coming on is known to be sufficient. The point is that the new generation coming on is renewable. There is now widespread investment in geothermal wind and small-hydro energy. Those investment projects all of which are known because they have been publicly signalled—and one or two of them have not been publicly signalled but have been privately signalled to officials—and many of which have already been consented will come on the book one after another in an orderly sort of queue. The 10-year moratorium on baseload thermal generation was simply to signal that the future of our integrated system needed to be more predominantly based on renewable electricity generation. It was that straightforward. 
It is possible to build—so long as one can secure a long-term gas contract and that does present difficulties—a quite large baseload thermal generation plant quite easily. Such plants are less costly because their capital costs are lower. The running costs are of course higher whereas the running costs for renewable electricity generation plants approach zero. The consent process is simple because the footprint if you will of a non-renewable electricity generator is relatively modest—it might take up only a hectare or so of land. Once the investment in transmission supports a baseload generator the generator will be used. Once the owners have it up and running and the gas contracts are in place they will bid in such a way as to ensure that the generator is used. That is why additional baseload thermal generation is not a good component of our electricity system. 
The opposite needs to happen. As our renewable generation picks up we need to take offline some of our most inefficient thermal generators which happen to be coal-based in the main. We have four big coal driveshafts all of which are in Huntly and all of which are called collectively the Huntly power station. Each of them can produce 250 megawatts but there is no reason why one by one they cannot be taken offline in the future as they come up for major refurbishment or indeed cannot be refurbished and put into the reserve scheme. The Electricity Commission has the say over that and the role to play there not Cabinet or this Parliament. That is what the future of this country looks like. We should take some of our older thermal generation plants progressively offline. Some of them should stay in the reserve generation market in case we get an unusually calm and dry year in our hydro catchments but there is no need for new thermal generation plants to proceed at the moment. 
If this moratorium comes off and a plant goes ahead as a result—because gas contracts that give investors security of supply might be bought or sold on the market—what will the Government do about that? The member who spoke before me was the Hon Dr Nick Smith and he spent his entire 10 minutes saying that thermal generation in New Zealand had increased. He is right. Just to recap briefly why that is the case I tell members that the main reason was a strike by capital straight after the Bradford reforms and only when people finally woke up to the fact that we might start to run out of electricity did we get ourselves a thermal power station in the form of e3p. There is no need for another thermal power station. It is a shame we have that one. There is no need for another. Nick Smith in his logic spent his entire 10 minutes saying that we had increased thermal generation yet his response is to remove a moratorium to allow for more. This guy has a PhD; what does that say about the quality of tertiary education when he says that his position is to be against more thermal generation but his voting position is to vote down a moratorium that would stop it? 
Hon Darren Hughes 
: The “Minister of Inertia” told him to do that. 
Hon PETE HODGSON 
: Oh the “Minister of Inertia” told him to do that. The Hon Dr Nick Smith our brand-new Minister for the Environment gave a 10-minute speech to tell us he wanted no more thermal generation but will vote to allow a moratorium against thermal generation to lapse. That is not good logic; that is dumb logic and one does not have to have a PhD to know that—someone in primer 2 would know that. If one is in favour of something one should act in favour of it. If one is in favour of something then one’s vote should follow one’s voice. But the Hon Dr Nick Smith has voiced in one direction and will vote in another. That just goes to show the pretty pass we have reached in this Parliament; this Government is determined to carry out a 100-day action plan and is determined to do things and to be seen to be doing things but is not concerned about the strategy logic or direction—or anything else—of what it is doing. 
What is more there will be no select committee hearings on this. There will be no select committee hearings on anything that has been passed in the last 2 weeks—no select committee hearings at all. Yet we know that in the Prime Minister’s own electorate Helensville where a thermal generation plant may be built if this legislation is passed the good people have something to say about that. Are they being excluded from the process because the Prime Minister has decided that this legislation will not go to a select committee? Yes they are being excluded. So there we are off to another great start. The Prime Minister the member for Helensville keeps saying to the local newspapers that he wants to be a very good local member and spend as much time in Helensville as he can— 
Hon Clayton Cosgrove 
: Does he live there? 
Hon PETE HODGSON 
: Of course he does not live there; he lives miles away in some mansion or other. He has just decided he will have legislation go through the House that may be damaging to his constituents but they will not have a chance to have any say. In fact he would not even meet them before the election—he was too busy. The person who was the Leader of the Opposition the Prime Minister in waiting back then said that his diary was filled up from July until the election. He would not even meet his constituents but now there is the possibility of a thermal power plant going up in his electorate and he is not prepared to allow the legislation relating to it to go to a select committee. That is the sort of deal he has with his constituents and I just hope that they pay a bit of attention to the man’s words and actions because they operate in contrary directions.