Hudson Brett: Electricity Industry (Small-Scale Renewable Distributed Generation) Amendment Bill — First ReadingText is incorporated into the Bound VolumeHudson Brett: Electricity Industry (Small-Scale Renewable Distributed Generation) Amendment Bill — First Reading[Sitting date: 11 November 2015. Volume:710;Page:7910. Text is incorporated into the Bound Volume.]BRETT HUDSON (National): I rise in opposition to the Electricity Industry (Small-Scale Renewable Distributed Generation) Amendment Bill. In doing so we reflect on this member’s bill. First I ask myself will the bill deliver the purpose that it claims and is it actually seeking to address a real issue—so is there any point to it and will it do it?In this case let us first look because the purpose of the bill says—and I will just quote a portion of it—that it is to “break down existing barriers and provide a fair regime … to encourage greater renewable distributed generation.” So the claim is that there are barriers and that the situation is not fair.Let us first turn our attention to the so-called barriers. Solar photovoltaic energy doubled between 2013 and 2014 and the trend has remained upwards. So if we look at the number of installed control points around the country that are photovoltaic on 31 August 2013 there were 1205 of those. On 30 June 2015 there were 6161. For the member’s benefit I will just point out that that is a 500 percent growth. So to claim that somehow there are inherent barriers is to go against what is actually happening and what people are choosing of their own volition to undertake across New Zealand.Secondly let us look at an issue of fairness. If there is not such a great barrier what is the fairness to be addressed? Our point would be that if the member is going to subsidise generation for one form which is in an otherwise competitive market then we are actually just interfering unnecessarily in that market and creating distortions. Because what the member is seeking to do is to set not only terms and conditions of contract but a price for the buy-back of excess generation into the grid for a period of 10 years. Unfortunately that will require retailers to purchase electricity often at a price that is greater than the wholesale price they could otherwise pay. In other words the marginal cost of electricity will be higher under their model than it would be on the open competitive market that we have today. You see New Zealand has already got 80 percent renewable energy. The additional megawatt kilowatt or watt that is provided at the moment is most likely to be provided from a renewable source.So in fact all the member’s bill would do is two things: one it would displace other renewable generation—that other renewable generation that is cheaper than the cost that the member would demand retailers pay for these small-scale generators—but it would also undermine the competitiveness that we already see in the market today. Because today there is amongst the retailers a range a mix of prices on offer for excess generation. Some it is true might pay less than the wholesale price as they would see it but there are some that would offer more. So really what that tells us is that people should be focused on looking at the options that are available to them and choosing the best one for them.So what I would say in conclusion is that although at a semantic or theoretical level the idea of encouraging additional photovoltaic energy generation and helping to incentivise people to do it through a fixed price might sound good if you actually look at the way the market has been working and the growth that we have seen in the installation of such generation all it would do—all it would achieve—is to negatively distort a market that is working and has been growing on its own.I simply think and I would say to the sponsoring member that if the bill were to succeed and go ahead this idea that the bill would give certainty to small-scale generators of a certain amount of price for them would come merely at the cost of every other consumer of electricity. They would have to pay more for the generation of those small-scale generators rather than the marginal cost on the next watt the next kilowatt the next megawatt through what are almost certainly otherwise renewable sources. I oppose this bill and I call for members across the House to do likewise.