Fitzsimons Jeanette: Questions for Oral Answer — Questions to Ministers 
Fitzsimons Jeanette: Questions for Oral Answer — Questions to Ministers 
[Volume:615;Page:10954] 
9.  
JEANETTE FITZSIMONS (Co-Leader—Green) 
 to the  
Minister of Energy 
: Does he agree with the Prime Minister’s statement on Tuesday that “the second electricity supply shortage in 3 years proved beyond doubt that there were fundamental flaws in the 1990s market model.”; if so what are those flaws? 
Hon PETE HODGSON (Minister of Energy) 
: 
 Yes. The key flaw highlighted by the 2003 power shortage was the market’s failure to encourage generators to retain stand-by generation that is needed only in very dry years. The Government addressed that failing with its electricity supply security policies announced last May. 
Jeanette Fitzsimons 
: Does he expect Project Aqua to contribute to dry-year security or does he accept that in a very dry winter there will be little or no available water to take out of the river and pass through the six power stations? 
Hon PETE HODGSON 
: I understand the argument about more eggs in the same basket in respect of Project Aqua. The fact is that this country needs to have a variety of generation. Nearly all the generation that has gone in over the last 10 years has been in the North Island and has been non-hydro. 
Lynne Pillay 
: Is he confident that the electricity system is now in better shape to cope with very dry years? 
Hon PETE HODGSON 
: Yes. The first 150 megawatts of reserve generation at Whirinaki will be ready before this winter. 
John Key 
: Will the Government approve future thermal generation plants along the lines suggested by Don Elder chief executive of Solid Energy; and does he agree that harnessing an energy resource to quote Mr Elder equal to 50 Maui gasfields should rank ahead of cuddling up to the Greens; if not why not? 
Hon PETE HODGSON 
: I draw to the member’s attention that the Government does not approve power stations. That is done through the resource management process. 
Peter Brown 
: Does the Minister not accept that with the Caygill review and the Electricity Amendment Act of 2000 he could well have addressed this problem very very easily and that if it had not been for the Greens rolling over with support he probably would have done? 
Hon PETE HODGSON 
: I am not sure which problem the member refers to but the Caygill report certainly did not suggest reserve generation. 
Jeanette Fitzsimons 
: Does the Minister agree with Professor Gerry Carrington of Otago University that Project Aqua will inhibit the building of wind generation by lowering summer prices and encourage the building of more fossil fuel – fired plant by raising the need for dry-year stand-by plant; if so how does that square with our Kyoto obligations? 
Hon PETE HODGSON 
: I do not actually. I think that the range of generation that is coming forward in New Zealand substantially—perhaps entirely but certainly substantially—mitigates that argument though I understand it and believe it has some validity. 
Jeanette Fitzsimons 
: Does he agree with the chairman of the new Electricity Commission Roy Hemmingway quoted in the  
Otago Daily Times 
 this morning that: “In New Zealand there are many many investments in energy efficiency that could be made that are much less expensive than new generation.”; if so what work is being done to investigate how much energy efficiency could be purchased with the $1.2 billion going into Project Aqua? 
Hon PETE HODGSON 
: I strongly agree with Mr Hemmingway’s comments and indeed would say to the member that she will be well aware of the National Energy Efficiency and Conservation Strategy which seeks to improve our nation’s efficiency by 20 percent by 2012. I am pleased to report that to date implementation of that strategy is bang on target. I think the question raised is whether the target itself needs to be reviewed.