Parker David: Electricity (Renewable Preference) Amendment Bill — First Reading 
Parker David: Electricity (Renewable Preference) Amendment Bill — First Reading 
[Volume:664;Page:11790] 
Hon DAVID PARKER (Labour) 
: 
 I rise to speak in support of the Electricity (Renewable Preference) Amendment Bill. There is no doubt that the world has a problem with climate change. It is caused primarily by the burning of fossil fuels. The two biggest sources of fossil-fuel burning in the world are burning fossil fuels for electricity generation and the use of oil in cars. If we want to reduce greenhouse gas emissions in the world then we have to reduce them from those two sources. If a country like New Zealand cannot do well in respect of reducing the source from our electricity generation then I ask who can. We are one of the most richly endowed countries in the world with regard to renewable electricity. Indeed there was a phase in New Zealand’s history when we already had 90 percent of our electricity coming from renewables. We went backwards after that because we did not understand back then the threat of climate change and we had discovered an enormous pool of gas in the Maui gasfield. As a consequence of that in the years following the development of Maui Gas our percentage of renewables went back to under 60 percent of renewables when it was at it lowest. 
The Labour Government turned that situation round. We turned the energy settings of this country round and we set the country on a course heading back to having 90 percent renewables by 2025. It was the Labour-led Government that did that; it was the National-led Government that opposed every meaningful step that we took along that path. It opposed having proper emissions pricing in electricity and other sectors of the economy; it is still wavering on having proper emissions pricing in agriculture despite the sound economic theory behind that; and now it is refusing to ensure that we reach the target of 90 percent renewables in electricity by 2025. 
Why is this important? It is important for exactly the reasons that were enunciated by the previous speaker Jonathan Young but they were misunderstood by him. The price point difference between gas and renewables is very close. The New Zealand gas market is a closed gas market. It is not connected to other markets. If we do not burn the gas that fuel companies find or explore for in New Zealand we do not sell it. The sellers of gas will price their gas at below the cost of renewables and they will forestall the development of renewables if they are not prevented from doing so. Gas is increasingly a by-product of oil exploration and it will be priced lower than renewables. New Zealand needs to build between 115 and 130 megawatts of new renewable generation capacity every year between now and 2025 in order to reach that 90 percent target. It is not a big ask. But if a 400 megawatt gas-fired power station is built and it has a lifetime of 30 to 50 years that is 3 years of demand growth that is not there for renewables. 
We know that our renewables are cost-competitive. We know that geothermal and wind are already cost-competitive because they are being built. But they could be undercut marginally by gas and what is National’s response to that? Well Gerry Brownlee the Minister of Energy and Resources said this week that the big development in energy this year is the gasification of coal in the Waikato. Does that not show to National members that there is a very real risk that that gas will be priced at marginally below the cost of geothermal energy and that it will close out renewables? Our greenhouse gas emissions will go up. We will be further exposed to the cost of those emissions as a country. We will then have an even more difficult choice as to how much of the cost of emissions should be faced in the agriculture sector which is another area that has been avoided by the Government. 
Charles Chauvel 
: 19th century solutions. 
Hon DAVID PARKER 
: That is right. You know this is so simple for New Zealand if we get it right. If we do not get it right then I am depressed for the world. If New Zealand cannot get it right on one of the two major sources of greenhouse gas emissions in the world and if we cannot get it right with the bounty of renewable resources that we have from existing technologies then I ask who can. 
I heard the ACT Party talk about tides. Well tidal energy generation is way off in the distance. It is uneconomic at the moment. Other than experimenting on it as we are to bring it forward as another technology—another initiative of Labour when in Government—it will not be here for probably a decade or two. But at the moment we have lots of geothermal and wind. We should stop them being closed out by the building of thermal in the form of gas-fired generation.