Parker David: Estimates Debate — In Committee 
Parker David: Estimates Debate — In Committee 
[Volume:649;Page:17702] 
Hon DAVID PARKER (Minister of Energy) 
: 
 I rise to respond to some of the comments that have been made about energy policy and its relationship with climate change policy. Of course we hear National again claiming that we had a crisis this year in electricity which was quite the opposite conclusion to the one reached by the  
New Zealand Herald 
 the  
Dominion Post 
 and all of the energy analysts other than Bryan Leyland who is always out there on the fringe with the National Party. In respect of this year in the 3 months to June we had the lowest inflows to our hydro lakes since 1947 and the data going back to 1947 is so old that we have to question whether it would be quite as accurate as the data we have today. By June we had the lowest inflows since 1947 and despite those record low inflows we have maintained higher lake levels than was achieved in the 1992 power crisis under the previous National Government when it had to put out streetlights and things like that. 
Sue Moroney 
: Now that was a crisis. 
Hon DAVID PARKER 
: That was a crisis as was the crisis in Auckland in the late 1990s when the lights went out on the whole of the Auckland central business district for 2 weeks under a National Government. By contrast we have managed our way through this situation very well—and why? It is because security of supply margins have improved under a Labour-led Government. 
The two main aspects that we need to have investment in in electricity in order to achieve security of supply are transmission which is the big lines that are owned by Transpower and sufficient generation build. In the 1990s investment in transmission was running at about $50 million per annum. This year it is $450 million. That is a ninefold increase. Next year it increases further still. We have enormous projects under way consented to under the Resource Management Act throughout the country and paid for without borrowing. In addition to the billions of dollars we have coming in transmission investment which is as I said $450 million this year alone we also have 1400 megawatts of new generation capacity being built in the next 4 years. To put that in perspective 1400 megawatts is something like 10 years’ demand growth. Security margins in that period are increasing substantially and they have improved significantly over the last 2 or 3 years. 
Of that 1400 megawatts more than half is baseload geothermal. Just about all of it is renewable. The way to reduce our greenhouse gas emissions in the electricity sector is to build renewables. That is what this Government is doing. We have an ambition of 90 percent renewables by 2025. In order to achieve it we have to build 170 megawatts of new renewables each year. That enables the increase in demand to be met as well as allowing some existing thermal plant to be retired or to be put into more of a dry year role. 
Phil Heatley 
: Ha ha! It doesn’t do that. 
Hon DAVID PARKER 
: I heard Mr Heatley laughing and calling out that that was not being done. This year alone we are building 400 megawatts. There are 400 megawatts of renewables under construction as we speak. As I said 1400 megawatts is coming on stream in the next 10 years just about all of it renewable. 
In terms of the effect on greenhouse gas emissions of course notwithstanding Dr Nick Smith’s comments he is wrong. The deficit projected for the first commitment period under the Kyoto Protocol which runs from 2008 to 2012 was until this year in the mid - 30 million tonnes. We have trimmed that deficit back to a projected deficit of 14.7 million tonnes because we are on top of our electricity-related emissions. For the first time in our history our transport emissions have plateaued. We are on the way to carbon neutrality in the electricity sector by 2025 and in the whole of the energy sector by 2040. 
An important part of that is energy efficiency. We have for the first time introduced into our energy settings the principle that as a country we should invest in efficiency ahead of extra energy or extra energy capacity where it is cheaper. In that cost-benefit analysis we should include environmental externalities like the cost of carbon emissions which are already a cost to the country. 
How do we do that? We do it through an emissions trading scheme. How do we bring forward renewables? We do it through having a renewables preference through the emissions trading scheme legislation. Notwithstanding the cant we hear from the National Party National members opposed both of those measures and every other measure for sustainability that we have brought forward. Criticisms were made of the earlier projects to reduce emissions. Those too were unfounded. That has brought forward wind and that is why wind is now economic in New Zealand. Under a Labour-led Government we are charging towards sustainability. 
Vote agreed to.