Parker David: Electricity (Renewable Preference) Repeal Bill — First Reading Second Reading In Committee Third Reading 
Parker David: Electricity (Renewable Preference) Repeal Bill — First Reading Second Reading In Committee Third Reading 
[Volume:651;Page:958] 
Hon DAVID PARKER (Labour) 
: 
 It will not be lost upon listeners to this debate and listeners to the debate in this House over the last 2 weeks that Gerry Brownlee who accused the Labour Opposition of arrogance for doing the job of the Opposition—in terms of trying to show the weaknesses in legislation and the poor processes—was the very member who under urgency has pushed through legislation that has not had the benefit of select committee consideration. That member sat in the chair like a stuffed dummy and did not take one call in the Committee on the Electricity (Renewable Preference) Repeal Bill—not one call. And we are accused of arrogance! He abused his position in the chair. He made the occasional interjection but did not take one call—not one call. His answer to curbing emissions growth in the electricity sector is to make it easier to build more fossil-fuelled thermal plants. When we boil it down we see that it is as simple as that. The Government is pretending to want 90 percent renewable generation but its answer is to make it easier to build more fossil-fuelled electricity plants. 
The Government claimed earlier that the legislation as it is currently drafted stops the retirement of inefficient thermal plants but that has been shown to be wrong. It is an issue that Mr Brownlee has not responded to either as the Minister in the chair or in his third reading speech. We showed that the legislation currently allows an exemption to the restrictions on new more efficient thermal electricity generation that retires old less efficient thermal electricity generation—a new gas-fired station to retire part of the coal-fired Huntly power station perhaps. But of course the ability to exert that sort of control is lost because of this repeal legislation and in future we will see more gas-fired power stations as well as coal-fired power stations. 
Mr Brownlee makes a lot of the fact that the e3p power station was built. Actually e3p was the only significant thermal power station added during the period of the Labour Government and it was necessary for the security of supply. That is why it was done. That is one of the reasons why we have security of supply exemptions under the legislation as it currently stands—they are occasionally necessary—but we have got to the point where it is less likely that they would be necessary in the future because we have brought forward wind power through good projects to reduce emissions. That makes it affordable and helps some of those projects through the consent process and in the last year we have built only renewable generation. Indeed against a background where we need to build additional capacity of about 150 megawatts a year to meet demand growth this year we have 426 megawatts of additional capacity under construction and it is all renewable electricity generation. 
So what we did turned the corner; it worked. We had geothermal and wind electricity generation coming forward and we also had some hydroelectricity generation coming forward. I am on record as saying that I do not think we should need much more hydroelectricity generation. It has too much of an adverse consequence on our rivers. But some hydroelectricity generation has been consented to and it will be built. That is another point where there is a lack of logic behind the Government’s plans and this has been disclosed by the Opposition speeches. Mr Brownlee has the temerity to call the Opposition arrogant because we were doing our job even though he did not take one call during his time in the chair. 
Mr Brownlee makes a lot of the Whirinaki power station. I think he referred to 70 million litres of fuel—I cannot recall the exact figure. It sounds like a big number and it is not small but he talks in litres. If we convert that figure to greenhouse gas emissions assuming 1 litre of fuel is roughly 1 kilogram of fuel we find that that is 70000 tonnes of carbon dioxide times two. So that is about 150000 tonnes of carbon dioxide. It is not insignificant but it is not enormous either. That is because although the Whirinaki power station has quite a capacity it does not run very much. It only runs about 1 percent of the time and when we need it we need it. We build thermal plants in that sort of situation rather than renewable plants because the capital costs are a lot lower and the running costs although they are higher are incurred only when we are really short and we need it for a short burst. 
This legislation is typical of the legislation that is now being promoted by the National Government. The Government says it wants to reduce emissions or to control emissions growth and it pretends that it wants to meet the goal of 90 percent renewable generation by 2025 but it will not take the steps that it needs to take in order to get there. National criticises any regulatory intervention saying that we should leave it all to market prices. It ignores the reality that in most of the market economies of the world there are regulatory interventions to lift the percentage of renewable electricity generation. The only real difference between New Zealand and Australia in that regard is that Australia is trying to lift from a very low percentage to something around 20 percent—I forget the exact number—and similar increases are being proposed in other countries. In New Zealand because we are already at around 66 percent to get to 90 percent we have to lift it by about 24 percent. So this regulatory intervention to lift it by 24 percent is not very different to the regulatory interventions taking place in other parts of the world. 
The last point I re-emphasise is that we cannot rely on a carbon price when we do not have a carbon price. How can we rely on a carbon price to stop new thermal electricity when we do not have one? How can you credibly stand up in this House and say that when you have a select committee set up to look at whether you should ever have a carbon price. We do not have one yet and the select committee will be considering whether we should ever have a carbon price or whether we should just adapt to climate change rather than trying to reduce emissions. How can you credibly say that you have a carbon price that will forestall extra thermal generation when the Government is not yet clear as to what the price of carbon will be? 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Please keep the Chair out of the debate. The member keeps referring to “you”. Please keep the Chair out of it. 
Hon DAVID PARKER 
: I am sorry Mr Assistant Speaker. 
The Government’s acolytes at the Business Roundtable—themselves fossils—are promoting fossil fuel use and a carbon tax and they say it should be $5 to $10 a tonne. We know that when push comes to shove they will be saying $5 a tonne. We know that $5 a tonne which is but 20 percent of the market price of carbon— 
Hon David Cunliffe 
: What’s the international market price? 
Hon DAVID PARKER 
: The international price is around $25 a tonne at the moment. Four-fifths of the cost would be left with taxpayers and the Government would expose the participants in the electricity market to only 20 percent of the cost. That $5 a tonne would not be sufficient to forestall investment in thermal generation. It just would not work. So how can we pretend that we can control the growth in fossil fuel electricity emissions by putting a price on carbon when first we do not have it and secondly if we did have it it might be at an artificially low price that would not work? 
In terms of the projects that we already have consents for the details of these have been listed and provided to those who are now members of the Government on many occasions. Those members made Official Information Act requests and asked questions in the House and the details of the projects have been provided to them many many times. They know like we know that our cheap sources of generation that are readily available from renewable sources include geothermal generation. There has been a renaissance in geothermal generation in New Zealand and we are very very lucky to have it because were it not for that geothermal generation it would be quite difficult for us to meet that 90 percent target whilst maintaining the security of supply. That geothermal generation provides baseload generation. We have substantial quantities available and we already know that it is economically sound because Mighty River Power and Contact Energy are both heavily investing in geothermal generation in order to bring those renewable projects to market. 
I also refer to some of the confusion that the Minister of Energy and Resources referred to in his criticisms of the Electricity Commission. What does the Electricity Commission do and why did we need it? Well one of the reasons was that after Max Bradford’s reforms New Zealand was the least-regulated electricity market in the world. We had completely unregulated lines businesses; we now have regulated lines businesses. At the time of the previous National Government we had about $50 million per annum being spent on capital investment in the transmission grid. That is now up to half a billion dollars per annum—a tenfold increase. So there is that level of investment which is improving the security of supply. The Minister says security of supply is so parlous after 9 years of a Labour Government but the reality is the opposite. Security margins in transmission have been improving year by year.