Mackey Moana: Electricity (Renewable Preference) Amendment Bill — First ReadingText is incorporated into the Bound VolumeMackey Moana: Electricity (Renewable Preference) Amendment Bill — First Reading[Sitting date: 10 July 2013. Volume:692;Page:11921. Text is incorporated into the Bound Volume.]MOANA MACKEY (Labour):I moveThat the Electricity (Renewable Preference) Amendment Bill be now read a first time. I nominate the Commerce Committee to consider the bill. First of all I want to thank my former colleague and friend Charles Chauvel whose name this bill was in originally. Apparently I am completely incapable of having bills drawn from the ballot. In my entire time inParliament I have never had one drawn so I am reliant on my very kind colleagues to draw bills from the ballot in my portfolio areas and to then very kindly hand them over to me. That is what Charles Chauvel did and I am happy to take this bill through its first reading.This bill creates a preference for renewable electricity generation through the reintroduction of a 10-year restriction on new baseload fossil-fuelled thermal electricity generation capacity except where exemptions may be appropriate. I will be honest. I have very low expectations that this bill will progress beyond its first reading but I sincerely hope that members will give it due consideration.This bill is an important first step to meeting two current Government targets: firstly that 90 percent of electricity generation be from renewable sources by 2025 and secondly the National Government’s target of a 50 percent reduction in greenhouse gas emissions by 2050. I am very pleased that the National Government has kept the Labour Government’s 90 percent renewable target and I want to commend it for that. But both targets are meaningless without a plan or a strategy or any policy to get us there and on current policy settings we will not achieve either target. The 90 percent renewable energy target should be easy for New Zealand. We are blessed with an abundance of renewable energy resources. I do hope that I do not hear claims from members who oppose this bill that we are doing OK because 2012 was a record year for renewable electricity generation. It was but only because it rained a lot. That is the only reason—our hydro lakes were at full capacity. I do not believe that hoping for wet weather is a plan or a strategy to get us towards a 90 percent target by 2025.When it comes to the National Government’s 50 percent target for greenhouse gas reductions by 2050 again we have no plan. We have a collapsed carbon price we have foresters deforesting and exiting the emissions trading scheme we have no new plantings and all the complementary measures introduced by the previous Labour Government have been removed except for the road-user charge exemption for electric vehicles. That is all that remains.Broader than that on the international stage New Zealand is the only country to have not tabled an unconditional single-number target for greenhouse gas emission targets for the 2013-20 period. This is something the National Government needs to rectify urgently. It was due in October last year. We are the only country that has failed to deliver and that has been noticed on the international stage. My point is that we need a plan and this bill could be an admittedly small but a very important first step.I want to say that this bill recognises that possibly the most crucial first step towards supporting renewable energy and towards meeting these targets is to have an effective price on carbon. This is a point that has been driven home by the Wind Energy Association which points out continually that an effective price on carbon is the best move that we can have for supporting renewable energy in New Zealand. The reason I say that my bill recognises that is that it has a 10-year restriction on this baseload fossil-fuelled thermal generation moratorium—a 10-year restriction—and that is in recognition of the fact that once we do have an effective price on carbon this measure will no longer be needed. But until that effective price on carbon is there the renewable energy sector is in a vulnerable position. The history of that is that we put that 10-year limit on when we first introduced the emissions trading scheme and when we recognised that it might take a number of years for the scheme to bed in for all the sectors to come in and for there to be a price on carbon that actually drives the behavioural change that all members of this House claim they support but very few put their votes behind. We are in exactly the same situation now unfortunately where the measures that were introduced under the emissions trading scheme as well as the complementary measures have all been wound back. We do not have any price oncarbon. Currently the price on carbon on the spot market is around 15c so again this bill is very timely—very timely. It would put in place a moratorium that would take us through to a time when we do have an effective price on carbon and when this measure is no longer needed.When it comes to the issue of the price on carbon I want to read out a couple of quotes from when the National Government voted against this measure in 2008 when it repealed it. Then Minister of Energy and Resources Gerry Brownlee said: “Reducing carbon emissions in the electricity sector remains a goal and renewable technology will be encouraged through the Emissions Trading Scheme.”—through the emissions trading scheme. Well that is no longer the case. It is no long the case at all. The second quote from Minister Brownlee again in the first reading of the bill that repealed this measure in 2008 is: “National believes that investment decisions in the electricity sector should be made on the basis of sound economics with environmental effects taken into account through a price on carbon”. So the main reason given for not supporting this measure back when the National Government repealed it was that it was going to have an effective price on carbon. Well we do not have one. We have a collapsed carbon price—15c. So what is the National Government’s response to that given that this was the main reason it gave for opposing this moratorium back in 2008? I look forward to hearing that answer.I want to address some of the concerns that are going to be raised about this bill. This bill does not threaten security of supply. Can I repeat that—this bill does not in any way threaten security of supply. The bill in fact recognises the importance of security of supply and as such it provides exemptions for use of non-renewable energy during a power crisis. It allows for the running of plants that combine non-renewable and renewable sources. It allows for the running of non-renewable plants that recycle heat and thermal plants that temporarily replace the whole or part of another thermal plant so that security of supply is not threatened. We could not have done more to guarantee security of supply. I suspect that we are going to hear the same old excuses but there is actually no basis to that threat that I am anticipating will come from National members.Of course this moratorium applies only to new baseload generation. It does not apply to peaking generation which is what we need when we get those spikes at peak demand time. That is not affected at all by this piece of legislation. It is only new baseload generation that is affected.If I can come to another reason that was given at the time as to why the National Government did not support the thermal generation moratorium—and I believe that this is actually a key reason and back in 2008 I do not think that we were quite as cognisant of the National Government’s intentions in this area as we are now—that reason is that it would discourage oil and gas exploration. I want to quote again from the first reading with Gerry Brownlee where he said: “The fourth reason why the Government is repealing the ban is that it disincentivises oil and gas exploration in New Zealand. Already the ban in the short time it has been in existence is seeing some explorers and investors shy away from New Zealand.” Well I do not know whether that is true but I suspect that that is really at the guts of what we are talking about here. Look I understand that this National Government likes fossil fuel exploration. It goes giddy for it. I get it. That is fine. It is the National Government. That is what it does—that is what it does. But my question to those members is why you would not do both. Why would you not support the renewable—Hon Chris Tremain: We are.MOANA MACKEY: No you are not Mr Tremain. Oh my dear! Why would you not support the renewable—Hon Chris Tremain: We have got the highest amount of renewable—MOANA MACKEY: Because it rained a lot Mr Tremain. That is why we had a record year in 2012 because the weather Gods smiled on the National Government and it rained a lot in the hydro lakes. Dear Lord is that the basis upon which the National Government is voting against this bill—because in 2012 it rained a lot? That is so scary in its logic that it beggars belief. Even the current Minister of Energy and Resources’ own officials have told him that on current policy settings we will not get to that 90 percent renewable target.My message to the Government is that this bill provides investment certainty for the renewable energy sector especially when we have a collapsed carbon price. There is nothing else driving that behaviour change. It provides security that a big oil or gas find particularly gas is not going to change the current economics of electricity baseload generation which actually are very very favourable for renewables at the moment. But a big gas find and a National-led Government that will not rule out that that gas will be generated into electricity baseload electricity generation—and I would love to hear a National member rule that out—provide enormous uncertainty for this sector. This piece of legislation takes that uncertainty away until we get an effective carbon price which is ultimately what is really going to drive the kind of progress and renewables that we want.Again I say to the National Government that this is not about stopping oil and gas exploration. It is not about turning off fossil fuels. It is about asking why you would not provide the same level of support and enthusiasm for the renewable energy sector which is creating a huge number of high-skilled jobs as you are for the oil and gas sector. The oil and gas sector does get subsidies. It gets tax rebates. It gets assistance with seismic surveying and the costs around that. All the renewable energy sector is asking for is a fair go. This bill is a step towards that fair go and I urge all members of the House to support it.