Fitzsimons Jeanette: Electricity (Renewable Preference) Repeal Bill — First Reading Second Reading In Committee Third Reading 
Fitzsimons Jeanette: Electricity (Renewable Preference) Repeal Bill — First Reading Second Reading In Committee Third Reading 
[Volume:651;Page:900] 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 On the face of it it does not matter very much that the Government is repealing the renewable electricity preference in Part 6A of the Electricity Act 1992 because the renewable electricity preference has so many exemptions and loopholes in it that one could drive any power station through those loopholes and have it approved. So I am not really sure why the Government is bothering to repeal something that was always a bit of a fiction. 
Let us look at some of the exemptions. First the preference applies only to baseload power stations. Anything that runs for less than about one-third of full-time is exempt anyway so one does not have to get permission for it. Secondly one can apply for an exemption if there is any kind of security of supply problem. I can imagine a number of situations where people wanting to build power stations might do that. Thirdly one can apply for an exemption if one can show that one’s power station will replace a power station that produces higher emissions. That is true of any gas-fired power station that anybody wants to build and it is true of any new coal-fired power station that anybody wants to build because they will all be more efficient than Huntly power station on coal. It is true that the Minister of Energy and Resources has to sign this off. 
I asked three submitters who made submissions on the Climate Change (Emissions Trading and Renewable Preference) Bill to the Finance and Expenditure Committee about this. I asked whether they could imagine any kind of power station at all that could not be built under one or other of these exemptions. None of the three submitters could. Contact Energy said that it could not but that it is a nuisance having to apply for an exemption even though it would be granted one. So we could argue that renewable electricity preference was always a bit of a wet paint sign. The Minister Gerry Brownlee said he would abolish it and goodness it is important—is it not—to take urgency before Christmas to pass the abolition of a wet paint sign through all its stages! 
However the Minister talked about symbolism. I think the reason this bill matters is its symbolism and the message it sends which is that the Government will burn more fossil fuel it does not believe in renewable generation and it thinks coal is sexy. If the Government is not trying to send that message why would it bother repealing legislation that would never stop a single power station being built? 
The Minister says that putting a price on carbon will encourage renewable electricity rather than fossil-fuelled electricity. But the way in which the electricity market—which was set up by a previous National Government—actually operates means that all electricity whether hydro wind or anything else will be charged at the same price to the consumer as coal-fired electricity. That means there will be large returns to renewable electricity generators but not to consumers. Those returns were to be the source of funding for the billion-dollar Green Homes Fund. We wanted to give this money back to people in a form that was more use to them than just a bit of cash. We wanted to give it back to them in the form of a warm dry healthy home that would be there for ever. That was to be the source of funding. The Government keeps claiming that there was no source of funding for the Green Homes Fund but that is where it was going to come from. 
The Minister says that we need to build more fossil-fuelled plant for security of supply. Well I am sorry but we cannot find any numbers at all to justify that. A lot of geothermal plant is being built at the moment which is— 
Hon Trevor Mallard 
: And a lot more to be built. There’s a big long list. 
JEANETTE FITZSIMONS 
: The member is right: there is a lot more to be built. A huge amount is in the pipeline right now—consented and being built consented and ready to be built or on its way through the consent process. It is enough to last us for years of normal growth and it is all renewable. But the Minister wants to cut off some of that at the knees and allow the building of fossil-fuelled plants that will crowd the renewable generators out of the market. 
You see if we want security of supply we need a diversity of renewable sources. We did not have security of supply when our energy was all hydro. A dry winter was a real problem. We have more security of supply if we have a mix of hydro and wind because they peak at different times. But we have much greater security of supply still if we have geothermal as well as hydro and wind. When the wave and tidal resources that are being developed now—and for which New Zealand has very good resources—are delivering we will have even greater security of supply because security lies in diversity. 
The other thing that will lead to security is looking at the demand side of the equation. Security of supply means that supply is always able to cope with demand. We can deal with that by building more supply which is the expensive and unreliable way of doing it or by making the demand side more efficient which is longer-lasting and cheaper. That is what we have been trying to do for the last 3 years with the Energy Efficiency and Conservation Strategy and all the work that the Energy Efficiency and Conservation Authority has been doing on energy efficiency standards insulation of houses assistance to industry and so forth. So if Gerry Brownlee wants energy security he needs to focus a lot more on the demand side than New Zealand ever has. 
The Minister spoke as though we will be closing all of our gas plants but we need some gas for peaking. We have a large gas plant at Stratford we have a large gas plant at Huntly we have a large gas plant in Otahuhu and we have several smaller gas plants around the place—we have gas for peaking. What we need is some good renewable baseload like geothermal and some more wind which will balance the hydro. That is what is being built. 
The real problem with devoting more gas resources to electricity generation is that it pushes us into a gas shortage to which the answer is imported liquefied natural gas (LNG). The people of New Plymouth do not think that that is a very good idea because LNG plants have the potential to blow up whole cities if anything goes wrong with them. Leaving aside the question of the risks of an LNG plant I say that if we allow Genesis and Contact Energy to build an LNG reception plant in New Plymouth we will link the price of all electricity in New Zealand to the price of oil internationally. That is because all the contracts for the international sale of LNG are linked to the basket of oil prices in Japan. That is the way the market works. If we are to import gas we will pay for that gas the price that we are currently paying for imported oil. New Zealand’s electricity—with a few small exceptions such as coal recently being imported to run Huntly—has always been indigenous. We have controlled our own sources. Going down the gas route will expose us to international oil prices just as they are about to go through the roof again. What could be dafter than that? Is that security of supply? 
The Minister said that he does not expect more coal-fired stations to be built as a result of this bill. Well I am sorry but Don Elder does. Don Elder from Solid Energy is very focused on building coal-fired power stations in Southland and on the West Coast. Without any indication at all that the Government has a preference for renewable generation there will not be anything to stop him. 
The Minister says he is committed to the target of reaching 95 percent renewable energy by 2025 but it seems he is not committed to any action to get there. This is becoming standard with the Government’s new targets. It set the target of a 50 percent reduction in greenhouse gas emissions by 2050 but it is not committed to any ways of getting there. In fact all the ways that would have got us there have now been abolished.