Hipkins Chris: Electricity (Renewable Preference) Amendment Bill — First Reading 
Hipkins Chris: Electricity (Renewable Preference) Amendment Bill — First Reading 
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CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I move  
That the Electricity (Renewable Preference) Amendment Bill be now read a first time. 
 At the appropriate time I hope to move that the bill be referred to the Local Government and Environment Committee for consideration. This bill creates a preference for renewable electricity generation. It reintroduces a 10-year restriction on new baseload fossil fuel thermal electricity generation capacity except where an exemption may be appropriate—for example to ensure security of supply. The bill reflects New Zealand’s commitment to addressing climate change. 
Renewable energy is integral to New Zealand’s future it is integral to our international reputation and it is integral to our own sense of national identity. Throughout the world New Zealanders can be proud that a large proportion of our electricity already comes from renewable sources. However we need to acknowledge that in recent decades New Zealand’s proportion of electricity from renewable sources has diminished relative to that from non-renewable sources. In 1974 83 percent of our electricity was generated through renewable sources. In 2008 that figure had reduced to only 65 percent and in times of peak demand it is even lower. Growth in demand for electricity has largely been met by tapping into non-renewable thermal sources such as coal and gas and that is unsustainable for our future. During the Labour-led Government’s term in office it took a number of steps to address these issues including the introduction of an emissions trading scheme the establishment of the Electricity Commission and a number of energy-efficiency initiatives. However much more still needs to be done. 
Towards the end of the Labour Government’s term in office it introduced a restriction on new thermal baseload power stations which was unfortunately repealed when the National Government took office. This bill reinstates that restriction and sends a very clear message to New Zealanders and to the world. It sends a message that New Zealand is indeed a clean and green country that lives up to its “100% Pure New Zealand” brand and does not just talk about it. It sends a message that New Zealand is committed to being a world leader in the development of newer and cleaner energy sources. It sends a message that New Zealand is committed to the future and that we are not interested in just exploiting the planet’s resources for our immediate gratification without a thought for the needs of future generations. Most important it sends a message that when New Zealanders stand on the world stage and talk about our commitment to addressing climate change we actually mean it. 
This bill addresses New Zealand’s essential commitment to tackling climate change by increasing renewable generation leading to lower carbon emission rates. Contrary to some claims this bill does not jeopardise the security of New Zealand’s electricity supply. It provides several exemptions including new non-renewable plants in the event of a power crisis generation plants that produce recyclable heat through the process of co-generation plants using a combination of renewable and non-renewable energy sources and thermal plants that temporarily replace all of or part of another thermal plant so that security of supply is not threatened. 
The bill also allows more efficient thermal generators to be developed in order to retire less efficient ones. It stops thermal power companies from undercutting renewable generators and closing out future renewable generation options. Finally it will help to address the issue of rising household electricity prices because renewable power is cheaper to run—much cheaper to run than gas coal and oil—and is likely to become significantly more so as the price for those non-renewable energy sources continues to increase. 
In the debate about emissions trading and climate change much attention has been focused on the impact of Government policies on household prices—and quite rightly so. A commitment to renewable energy demonstrates that we are committed to keeping power prices down in the medium to longer term. Renewable energy is cheaper; even if it takes a bit longer to get off the ground in the long term it is cheaper. Reliance on gas and coal enables non-renewable energy providers to set a high market price and encouraging more renewable electricity generation will help us to bring prices down or at the very least keep them at a stable level. 
We need look no further than at the Maui field for an example of how price increases in the past have occurred as a result of the running down of thermal energy sources. When the price cap on the Maui gas field was lifted the price of electricity in New Zealand went up substantially. The depletion of the Maui gas field has been one of the major drivers in the significant increase in electricity costs that New Zealanders have faced over the past decade. If New Zealand had addressed its reliance on thermal power a decade ago power prices might not have risen quite as dramatically or steeply as they have. It is time for us to get serious about reducing our reliance on non-renewable energy sources and about placing a much heavier emphasis on renewable electricity. 
It is happening around the world already. New Zealand prides itself around the world as being “100% Pure New Zealand” yet the brand we are so proud of risks being tarnished as we are left behind by other countries. Denmark started to address this issue more than a decade ago. In 1990 the Danish Government set out to address its carbon emission rate and to establish more efficient ways to use energy. The Government did that by converting many of its coal and natural gas-fired plants into co-generators during the 1990s. It moved towards converting the remaining district heating plants to being fuelled by other sources such as straw woodchips and other biofuels. Today Denmark has one of the most extensive co-generation systems in Europe. What is more by 2030 Denmark’s reliance on coal will have decreased from 54 percent to only 6 percent. That country has gotten serious about addressing the challenge of renewable energy. 
As a result of this scheme Denmark is now considered a world leader in renewable energy—a massive transformation. In 1991 only 3 percent of Denmark’s electricity supply was renewable; by 2004 that figure had already risen to 25 percent which shows the difference that can be made if a country is really serious about addressing this issue. Other Governments have caught wind of this and have also been adopting similar initiatives including the Governments of many American states. Participating states and provinces include California Montana New Mexico Oregon Utah Washington British Columbia Ontario and Quebec. 
The purpose of the Western Climate Initiative is to identify evaluate and implement ways to collectively reduce greenhouse gas emissions in that region. It requires partners to set an overall regional goal to reduce emissions and to develop market-based multi-sector mechanisms to help achieve that goal. California has enshrined similar legislation to that which is proposed in this bill. In 2006 Senate Bill 1368 was introduced to limit long-term investment in baseload generation by the state’s utilities. Power plants must now meet an emissions performance standard. Washington has followed with the same approach as California prohibiting coal plants whose emissions would exceed those of natural gas plants. In 2007 Ontario’s Government committed to phasing out all coal generation in that province by 2014. 
New Zealand trades on its “clean green” brand. We attract thousands of tourists here every year because of it. Our export dairy and agricultural industries rely on our “clean green” brand for access to their markets overseas. That brand is reinforced or undermined by the decisions that we take in this Parliament. As I have demonstrated other countries and other Governments around the world—be they at local or national level—are dealing with this issue systematically and in quite a significant way. New Zealand simply cannot afford to be following other countries; we need to be at the forefront of this debate. 
This bill does not remove incentives for exploration in the oil and gas industry; it recognises that New Zealand needs to move to a much greater focus on renewables for our future energy supply and that we cannot continue to rely on non-renewable sources for our energy future. I urge all parties in Parliament to give this bill the opportunity of consideration by a select committee. I am aware that when a similar measure was passed by the previous Government one of the National Party’s criticisms was that people did not have the opportunity to have a say or have their submissions heard. National members have an opportunity to remedy that concern right now by voting for this bill to go to a select committee so that everyone can have a say—so the public can have a say and yes so the industry and those who will be affected by this legislation can have a say. I look forward to the debate; I look forward to the contributions that other parties will make to this debate. 
The time for us to get serious about renewable energy is well and truly here. We cannot continue to rely on thermal electricity generation for all of our future demand; we need to place a much greater focus on renewable energy. I commend this bill to the House.