Donald Rod: Urgent Debates — Electricity Industry 
Donald Rod: Urgent Debates — Electricity Industry 
[Volume:608;Page:5848] 
ROD DONALD (Co-Leader—Green) 
: 
 New Zealand faces two challenges in respect of energy. The first is to get through this winter. The second is to start being a lot smarter about both how we generate and how we use electricity and all forms of energy. This year we see a dry year and the depletion of the Maui gasfield coinciding. Neither of those events is a surprise. The National Institute of Water and Atmospheric Research warned several years ago that rainfalls were likely to be lower in the future than in the recent past. That is in part due to global climate change and to our collective failure as a nation and as a species to take any action to lower carbon dioxide emissions in the last 15 years. The Greens warned 30 years ago that burning Maui gas to generate electricity wasted two-thirds of the energy value of that gas—one-third electricity two-thirds waste heat. An asset that could have lasted a century has been burnt off in less than one-third of that time. It has warmed the planet needlessly and cooked a few fish in the Waikato River in the process. 
Getting through this winter requires a collective effort to conserve electricity. It needs an extra effort by those who are wealthy and are large energy users to reduce their power consumption so that those with little do not freeze in the dark. Squandering energy through conspicuous consumption is obscene at the best of times and in today’s circumstances it is a crime. Either way it is time for everyone to systematically reduce the energy demand through increased energy efficiency—that is doing more with less for longer. Will today’s announcement achieve that goal? No it will not and we are extremely disappointed in the Government for failing to tackle the essential challenge. 
But we welcome the end of a very expensive 2-year experiment that was bound to fail. New Zealand is the only country in the world that has been trying to run an electricity market with no regulation other than an officially sanctioned cartel. That is the type of silliness that emerged from the 1990s when one was either a central planner or a libertarian and rational debate on economic management in different sectors was largely absent. Max Bradford and the previous National Government have a lot to answer for. One reason the Greens supported the Minister’s legislation in 2001—an attempt to fix up Max Bradford’s “more market” reforms—was that it contained the power to create a Crown board to regulate the industry if self-regulation failed. It has failed and that power is now being used to create the Electricity Commission. 
The electricity sector should operate for the public good. It should operate reliably sustainably and cost effectively. The Government issued a very good energy policy statement in 2000 setting out what it expected from the electricity industry: security of supply the minimising of greenhouse gases the minimising of spills of water from the dams the encouragement of new renewable forms of energy and the encouragement of participation from consumers in the market. We had input into that statement and we support it. What we have lacked so far is anyone who is accountable for whether the system is delivering those outcomes. So we welcome the new board which will have that responsibility. The provision that the Greens put in the 2001 legislation will now start to produce results. 
Every year the Auditor-General and the Parliamentary Commissioner for the Environment must report to Parliament on whether the electricity industry is meeting the requirements of the Government’s policy statement and if not what rules need to be changed so that it will. They will have the benefit of the best international expertise to help with that. From today’s announcement there will be a board that can be held responsible for meeting those goals. The jury is still out on whether the new board will achieve those goals but when the audit reports come in we will have the information to judge that. After the ideology and information vacuum in terms of energy policy since 1987 informed and relatively disinterested advice will be welcome. 
That is the end of the good news. Today’s announcement by the Labour Government will not help us to get through this winter. It will not help the climate and it will not help us to be smarter in using energy. For this winter the only solution is to engage every business every Government department every family every school and every New Zealander in making sensible savings to the extent that we can. For the future we need an economy in which greater energy efficiency is seen as a better alternative to a new power station and in which people and businesses are rewarded for saving every year—not just in a dry year—so we do not need large idle power stations that we pay for but rarely use. Our country needs some dry-year capacity—we acknowledge that—but with the proper investment in renewables and energy efficiency that could be provided from existing plant coupled with demand-side bids from the larger users. 
In simple terms buying the right to turn off a potline at Comalco or the equivalent for 3 months in a 1-in-60 dry-year is the equivalent of buying a new power station that can generate 5 percent more electricity in that dry year—and it is much much cheaper. That is the least that Comalco should be asked to do given that it gets its power for a fraction of what householders have to pay and for less than any other business user. Buying from the demand side would make better economic sense than having resources permanently tied up in a power station and everyone paying higher power prices for it. If the Electricity Governance Board is to tender for dry-year capacity it must call for demand-side bids as well. Hopefully innovative generators will join up with their large users and put in bids that combine some new capacity and some demand-side management. Even that would be better than nothing at all from the demand side. 
Some people seem to think that the problem this winter is that we lack enough power stations. They blame the Resource Management Act the occupational health and safety legislation Maori and whomever else they want to take a swipe at. The facts say otherwise. Since the electricity market began in 1996 New Zealand has built over 1300 megawatts of new capacity. That is 1.3 Huntly power stations. That new capacity generates almost 10000 gigawatt hours or around one-quarter of our total electricity use in an average year. Around 120 megawatts of new wind capacity has been announced in the last couple of weeks and two thermal power stations are just waiting for the gas to allow them to be built. The fundamental problem is that we use what we have so inefficiently. If electricity demand grows at 5 percent a year we will have to double the whole system in 14 years and double it again 14 years later. That is four times our current generating capacity in 28 years from now. That is a path to disaster. That path is as predictable as the Maui gasfield’s depletion was 30 years ago. 
Fortunately there is an alternative. New Zealand can have an economy that develops without using more electricity per capita. Many European countries have done that for years and some New Zealand regions are doing so now. For 30 years the Greens have been promoting a whole host of measures including the direct use of gas for heating rather than gas-fired electricity the insulation of homes water-heaters and refrigeration in industry compact fluorescent lights the direct solar heating of homes and water wind generation of electricity properly sizing industrial motors to their loads and wood-waste - fired boilers in the forestry industry. If the Governments of the 1970s the 1980s and the 1990s had done those things we would not be talking about an energy crisis today and old people would not be worried about freezing in the dark this winter. 
Thanks to the Greens we have the Energy Efficiency and Conservation Act an energy efficiency strategy and renewables targets yet the amount that the Government is putting into efficiency and conservation is miniscule—less than 1 percent of the cost of Project Aqua alone and little more than the $7 million largely wasted by the industry governance board led by David Caygill. New Zealand had the opportunity to lead the world yet the answers given in this House at times seem to be that we should dam all the rivers pollute the skies and sacrifice our biosecurity—do anything but turn out the light when one leaves the room. Do people seriously advocate a future in which our precious energy resources continue to be wasted and we build ever more power stations to feed that culture of waste? 
Our children deserve a better legacy than that miserable “business as usual” approach. To borrow a quote from  
The Six Million Dollar Man 
 30 years ago “we have the parts we have the technology” and we can rebuild an energy-efficient sustainable economy. What we have lacked for three decades is the political will to do so. As Labour said in 1972 at around the time that the Maui contracts were signed it is time for a change. That change must be that the Government stops trying to fly on one wing. Instead of excluding demand-side management it must give that more weight than supply-side measures. In fact demand-side management provides both the insurance policy that the Government needs and the means to reduce the possibility of ever needing to make an insurance claim. If Labour will not adopt what 30 years’ experience tells us is the only common-sense solution to this ongoing crisis then it is indeed time for a change.