Electricity (Renewable Preference) Repeal Bill — First Reading Second Reading In Committee Third Reading 
Electricity (Renewable Preference) Repeal Bill — First Reading Second Reading In Committee Third Reading 
[Volume:651;Page:898] 
Electricity (Renewable Preference) Repeal Bill 
First Reading 
Debate resumed. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 The Government is continuing its assault against progress. It started last week with the removal of the research and development tax credits—that was the opening bid—and we also learnt there will be no action on the emissions trading scheme any time soon. We are sending that legislation off to a so-called high-level select committee. Then earlier today the biofuels industry had its ankles cut from underneath it which will mean a swag of disinvestment in that industry quite apart from the disinvestment that has already occurred in the forestry industry last week. And now the Government is saying it is time we should burn some fossil fuels to make electricity. The Labour Party will strongly oppose this bill because the legislation it repeals has a function to play and its removal will see the possibility of thermal generation being built that is unneeded and unnecessary. Let us be clear that the moratorium is against baseload thermal generation only. If any more peaking plants are needed in this country they can still be built despite the moratorium; it is baseload thermal generation to which the moratorium applies. 
Why does the moratorium apply? It applies for the simple reason that this country has an integrated electricity generation system involving predominantly hydro and thermal energy with increasing amounts of geothermal and wind energy. That integration is secured by a variety of Cook Strait cables and it is in balance now. It used not to be in balance; it used to be wildly out of balance depending on how far back in history one wants to go. I can go back quite a long way but the Max Bradford era will do. Max Bradford took the electricity generation system and turned it on its head. There was in effect a strike by capital for years to come. We had a strike by capital in the early part of this decade. We saw one thermal plant go on then we saw the five new generators/retailers duck and weave to see whether they could avoid capital investment until one of them came forward. Then another came forward but in the meantime we certainly started to run thin on the margins. 
Those margins are now in much better shape than they have ever been—or at least in the last 1½ decades that I can speak of. The degree of new generation coming on is known to be sufficient. The point is that the new generation coming on is renewable. There is now widespread investment in geothermal wind and small-hydro energy. Those investment projects all of which are known because they have been publicly signalled—and one or two of them have not been publicly signalled but have been privately signalled to officials—and many of which have already been consented will come on the book one after another in an orderly sort of queue. The 10-year moratorium on baseload thermal generation was simply to signal that the future of our integrated system needed to be more predominantly based on renewable electricity generation. It was that straightforward. 
It is possible to build—so long as one can secure a long-term gas contract and that does present difficulties—a quite large baseload thermal generation plant quite easily. Such plants are less costly because their capital costs are lower. The running costs are of course higher whereas the running costs for renewable electricity generation plants approach zero. The consent process is simple because the footprint if you will of a non-renewable electricity generator is relatively modest—it might take up only a hectare or so of land. Once the investment in transmission supports a baseload generator the generator will be used. Once the owners have it up and running and the gas contracts are in place they will bid in such a way as to ensure that the generator is used. That is why additional baseload thermal generation is not a good component of our electricity system. 
The opposite needs to happen. As our renewable generation picks up we need to take offline some of our most inefficient thermal generators which happen to be coal-based in the main. We have four big coal driveshafts all of which are in Huntly and all of which are called collectively the Huntly power station. Each of them can produce 250 megawatts but there is no reason why one by one they cannot be taken offline in the future as they come up for major refurbishment or indeed cannot be refurbished and put into the reserve scheme. The Electricity Commission has the say over that and the role to play there not Cabinet or this Parliament. That is what the future of this country looks like. We should take some of our older thermal generation plants progressively offline. Some of them should stay in the reserve generation market in case we get an unusually calm and dry year in our hydro catchments but there is no need for new thermal generation plants to proceed at the moment. 
If this moratorium comes off and a plant goes ahead as a result—because gas contracts that give investors security of supply might be bought or sold on the market—what will the Government do about that? The member who spoke before me was the Hon Dr Nick Smith and he spent his entire 10 minutes saying that thermal generation in New Zealand had increased. He is right. Just to recap briefly why that is the case I tell members that the main reason was a strike by capital straight after the Bradford reforms and only when people finally woke up to the fact that we might start to run out of electricity did we get ourselves a thermal power station in the form of e3p. There is no need for another thermal power station. It is a shame we have that one. There is no need for another. Nick Smith in his logic spent his entire 10 minutes saying that we had increased thermal generation yet his response is to remove a moratorium to allow for more. This guy has a PhD; what does that say about the quality of tertiary education when he says that his position is to be against more thermal generation but his voting position is to vote down a moratorium that would stop it? 
Hon Darren Hughes 
: The “Minister of Inertia” told him to do that. 
Hon PETE HODGSON 
: Oh the “Minister of Inertia” told him to do that. The Hon Dr Nick Smith our brand-new Minister for the Environment gave a 10-minute speech to tell us he wanted no more thermal generation but will vote to allow a moratorium against thermal generation to lapse. That is not good logic; that is dumb logic and one does not have to have a PhD to know that—someone in primer 2 would know that. If one is in favour of something one should act in favour of it. If one is in favour of something then one’s vote should follow one’s voice. But the Hon Dr Nick Smith has voiced in one direction and will vote in another. That just goes to show the pretty pass we have reached in this Parliament; this Government is determined to carry out a 100-day action plan and is determined to do things and to be seen to be doing things but is not concerned about the strategy logic or direction—or anything else—of what it is doing. 
What is more there will be no select committee hearings on this. There will be no select committee hearings on anything that has been passed in the last 2 weeks—no select committee hearings at all. Yet we know that in the Prime Minister’s own electorate Helensville where a thermal generation plant may be built if this legislation is passed the good people have something to say about that. Are they being excluded from the process because the Prime Minister has decided that this legislation will not go to a select committee? Yes they are being excluded. So there we are off to another great start. The Prime Minister the member for Helensville keeps saying to the local newspapers that he wants to be a very good local member and spend as much time in Helensville as he can— 
Hon Clayton Cosgrove 
: Does he live there? 
Hon PETE HODGSON 
: Of course he does not live there; he lives miles away in some mansion or other. He has just decided he will have legislation go through the House that may be damaging to his constituents but they will not have a chance to have any say. In fact he would not even meet them before the election—he was too busy. The person who was the Leader of the Opposition the Prime Minister in waiting back then said that his diary was filled up from July until the election. He would not even meet his constituents but now there is the possibility of a thermal power plant going up in his electorate and he is not prepared to allow the legislation relating to it to go to a select committee. That is the sort of deal he has with his constituents and I just hope that they pay a bit of attention to the man’s words and actions because they operate in contrary directions. 
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. 
Hon RODNEY HIDE (Leader—ACT) 
: 
 It is with much pleasure that I rise on behalf of the ACT Party to support the Electricity (Renewable Preference) Repeal Bill. This bill is a direct consequence of the relationship built up between the National and the ACT parties. I am very pleased that we are going to have some economic sanity and some sanity in energy planning and supply in New Zealand as a consequence. 
Putting a ban on the use of fossil fuels to generate electricity in New Zealand was a mad idea cobbled together at the last minute. It shows that the previous Government’s policy on climate change global warming and the emissions trading scheme was cobbled together and not well thought through. If that Government had been committed to and had believed in an emissions trading scheme—and I have to say I do not believe in it—it would have priced the emission of greenhouse gases and it would have allowed people to get on with it reflecting the price. That is the whole logic of having a tradable scheme. That is the purpose of such a scheme. One does not need to tell people how to do it when to do it and why to do it; one lets them get on with it. But the previous Government being of the meddling variety that knows best and tells people what to do was not content with just jacking up the price of everything to every business and every homeowner in the country; no it wanted to go a step further. 
I listened carefully to Jeanette Fitzsimons’ speech because I am always open to the possibility that we could be wrong and that reversing the ban might be a mistake. I have to say I heard no reason to suggest that the Government is wrong in going with this ban. Jeanette Fitzsimons said—and I remember her saying the same thing at the time the ban came in—that the ban was toothless that it would not achieve any result and that anyone who wanted to could get round it. Well is New Zealand so short of legislation that we should be passing legislation that has no effect? I do not think so. If Jeanette Fitzsimons does not think the ban achieves anything then let us get rid of it. I guess the hallmark of this Government is that it is honest about what it is doing. I think that what we saw previously was a lot of hot air— 
Hon Darren Hughes 
: What about the member’s select committee on climate change? That won’t achieve much either. 
Hon RODNEY HIDE 
: That member Darien Hughes who lost his seat at the last election is calling out that he knows everything he knows all about the select committee that will meet for the first time tomorrow and he knows what the result will be. That is how clever that man is who lost his seat. Mr Darien Hughes was a member of a Government that rammed through the emissions trading scheme without actually considering the options and without doing a regulatory impact statement. I was very very interested to hear Darien Hughes and others call out that the Government is passing stuff to remove unnecessary—[ 
Interruption 
] What did I call him? [ 
Interruption 
] Oh I get confused. I heard Darren Hughes calling out that the Government did not do a regulatory impact statement to remove red tape. Where was the regulatory impact statement from the previous Government on the implementation of the emissions trading scheme? Where was it? It did not happen did it? 
Let me go back to Jeanette Fitzsimons who I was discussing before I was rudely interrupted by the man who lost his seat. Jeanette Fitzsimons wants to ban— 
Hon Darren Hughes 
: How many MPs have you got? 
Hon RODNEY HIDE 
: The member wants to know how many MPs I have. I know that for those in the Labour Party it is tough to count. I have five. 
Hon Darren Hughes 
: How many when you took over as leader? Nine! 
Hon RODNEY HIDE 
: Oh the member is saying I went from nine to five. Yes but here is the interesting transition that occurred. When I took over as leader we were sitting where Darren Hughes is. When he came into the House he was sitting on this side of the House. Now he is sitting over there somehow claiming victory and not able to count. Look I like the member— 
Hon Darren Hughes 
: It took you 12 years. 
Hon RODNEY HIDE 
: Oh yes but good things are worth working towards. I did not have to slip into another party. We actually had the courage the discipline and the focus— 
Hon Darren Hughes 
: To destroy your party. 
Hon RODNEY HIDE 
: —to start a party. Actually the Labour Party has had more success at destroying political parties than any other party here. Let me go through the list. It destroyed the Alliance party it destroyed the New Zealand First Party it destroyed the United party it tried to destroy the Maori Party but did not succeed and it will probably destroy the Green Party. That is how the Labour Party operates. I am sorry— 
Hon Darren Hughes 
: Watch those words it will happen to you! 
Hon RODNEY HIDE 
: I am just explaining it. Darren Hughes calls out that it is going to happen to the ACT Party. Maybe but I tell Darren that that will be up to the voters. I know he does not like the voters having a say but it will be up to the voters just like— 
Chris Hipkins 
: Through the select committee maybe. 
Hon RODNEY HIDE 
: What is that? 
Chris Hipkins 
: Send the bill to a select committee and let the voters have a say. 
Hon RODNEY HIDE 
: I have seen Labour operate select committees. Does the member remember the select committee on the Electoral Finance Bill? The public got to have a say. I tell Mr Hipkins that I remember what the public had to say. I have a memory of what the Law Commission the Law Society and the Human Rights Commission had to say and now that member’s own leader says “Oh we got it wrong.” Well that is what the select committee told Labour. I come back to Ms Fitzsimons. These young pretenders who are not allowed to speak in the House try to get into  
Hansard 
 by interrupting the famous leader of the ACT Party and MP for Epsom. Let me get back to Ms Fitzsimons. I can remember Jeanette Fitzsimons giving a seminar at the University of Canterbury many many years ago. 
Hon Darren Hughes 
: You were at Lincoln. 
Hon RODNEY HIDE 
: I have actually been to more than one university. 
Hon Member 
: Including the university of life. 
Hon RODNEY HIDE 
: Yes. Ms Fitzsimons’ concern was that we were running out of fossil fuels. She even put a date on it—1992. News flash! We did not run out of fossil fuels in 1992. In fact it turns out we have so many fossil fuels to power the future of New Zealand that now Jeanette Fitzsimons wants to ban their use. The Green Party predicted that we would run out of fossil fuels more than 15 years ago. We did not run out of fossil fuels and their having failed to run out the Green Party now wants to ban their use. What is the Green Party and the Labour Party policy? Are we going to run out of fossil fuels or do we have to ban their use? 
I say to the Labour Party and to the Green Party that our concern has to be the cost to New Zealand of powering business of keeping our houses warm and of actually succeeding as a nation. All that these sorts of bans do—and bans are always the response of the Labour Party and the Green Party—is put up the costs of the very people whom they claim to represent and care about. That is why I am so pleased to be standing in this House to support the repeal of a very stupid and very misguided ban. Phil Goff has said that the Electoral Finance Act was a mistake; I am looking forward to the Labour Party members saying that this ban was a mistake too. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Last week Wellington hosted a prestigious event packed full of academic excellence ground-breaking research and creative expertise. I am not talking about the maiden speeches—as outstanding as they all have been—I am thinking of the Realise the Dream event which celebrates our extraordinary young secondary students who are pushing boundaries and taking on the world of science research and technology. The event hosted by Genesis Energy included a project from Jake Martin of Cambridge High School. He explored the possibility of turning biomass energy and waste streams into a usable energy source for transport by experimenting with an engine that runs on wood. His model a gasifier demonstrated not only that the charcoal waste product of his engine was useful for growing plants but that the biochar produced was also magnetic. 
Is it not time for Aotearoa to realise the dream? The question is of course what the nature of that dream is. In the Maori Party our dreams include keeping our natural resources and environment healthy safe and intact for future generations. To do this we know will require this House to exercise as much rigour and expertise in creating innovation and energy efficiency as those students attending Realise the Dream did. For the great challenge facing us all is that while on one hand Genesis Energy was sponsoring an amazing event that was all about inspiring our young people to achieve on the other it was announcing plans for price hikes of up to 9 percent in parts of Auckland. This is our challenge: to meet the growing demand for electricity while at the same time seeking to reduce demand by the energy efficiency strategies we invent. If a group of secondary school students can construct a steam engine that produces electricity surely the members of this House can come up with a good idea or two about renewable energy sources including geothermal hydroelectricity wave wind photovoltaic and solar. Merely continuing to use coal oil and gas to generate electricity is hardly stretching beyond the frontiers of what we know already which is that coal is the fossil fuel that generates the most carbon dioxide per unit of energy generated. 
The coal-fired power station at Huntly—technically known as a baseload fossil-fuelled thermal electricity generation plant—has a direct and immediate impact on climate change yet in this bill we are disregarding our best knowledge and throwing caution to the wind. Is caution or is commercial pressure paramount? The question that must test all of our minds is whether we actually know what problem this bill seeks to address. Is the real issue that we all need to show much greater interest in creating effective energy conservation and efficiency strategies? Is the real issue that our transmission infrastructure is in such a poor state that the surplus capacity in Te Wai Pounamu cannot be carried across to Te Ika-a-Maui because the Cook Strait cable needs urgent repair or replacement? Is the real issue the bizarre fact that in our southern hydro lakes Waitaki and Manapouri the transmission infrastructure is so weak that water is currently being spilled? Or is the real issue the structure of the electricity industry itself? 
I was interested to read the recent statement from Bryan Leyland of the Climate Science Coalition. He suggested that the way the market is structured now rewards generators for keeping us on the edge of a shortage. It is all a matter of perspective. Rushing under urgency to try to meet the growing demand for electricity by increasing thermal generation is at best short-sighted and at worst it simply heaps coals on an ever-burning fire. Repealing the ban on thermal energy generation will have other effects that the Maori Party is concerned about. Maori organisations involved in sustainable energy developments such as geothermal power have spoken to us about their concerns that fossil fuel plants as a result of this bill will be at an unfair advantage that is not conducive to fair competition with renewable energy developments. That is because there is no current economic instrument through which these fossil fuel plants will have to face their carbon costs. 
It is time to be brave to realise the dream and to explore other alternatives. Alternatives such as geothermal energy deserve the support of this House. Geothermal energy is a sustainable energy source. There are no pollutants attached so it is safe for the environment. There is also a significant amount of energy to be harnessed with geothermal power. It is a source that is available 24 hours a day and for which very little land is required. It is a concept the Maori Party is very interested in. We know that Maori organisations have been heavily involved in geothermal energy developments. In fact one of those energy developments Tuaropaki Trust—an amalgamation of landowners from the seven Mokai hapu who affiliate to both Tuwharetoa and Ngati Raukawa—topped the Maori and iwi sector in the  
National Business Review 
’s monthly exciting company series with a rating of 93.1 which is the highest ever recorded. 
The Tuaropaki Trust was described by trust chairman Tumanako Wereta as giving his people a beacon of hope and prosperity. That hope and prosperity has emerged from annual revenues that have almost doubled to around $50 million in the past 4 years. The trust combines farming and horticulture business with geothermal power generation and satellite communications. It has come a long way since 2000 when the trust commissioned its first generator Mokai I powered from geothermal steam under the land. A second plant has since opened up and now a total of 110 megawatts of electricity is being produced. Tuaropaki Trust is not just about providing a beacon of hope and prosperity to the descendants of seven hapu of Mokai; it provides Aotearoa with inspiration about a bright future—a future when renewable energy allows us to be sustainable while at the same time protecting and preserving the limited resources of oil gas and coal. 
We are so fortunate in Aotearoa that we have so many renewable options. We must place faith and trust in those organisations that can produce renewable energy and reduce carbon emissions as a result. We need to find new post-carbon ways of living to contribute to solutions that address the global issues of peak oil and to find sustainable energy alternatives without indulging in further finite and exploitative gas and oil exploration. The security and demand of supply the infrastructural problems the price hikes and the structure of the electricity industry are all challenges that face us. But they are not insurmountable. Windflow Technology in Christchurch has become a world leader in the design of smaller but highly efficient wind turbines. We can accelerate the development of new technology by making a commitment to using renewable energy. That commitment creates a market for electricity from renewable energy and supports private investment which in turn brings down the relative cost of renewable electricity. We need a forward-looking policy to kick-start a new industry and to create a competitive market in which new players can compete with established operators. 
With the Electricity (Renewable Preference) Repeal Bill we have a solution that misses the mark in terms of addressing the wider scope of these problems. Furthermore it is of course of note when one of our country’s biggest energy companies Contact Energy said last night that it had no plans to build fossil fuel power stations despite this bill being on the books today—a view that is apparently shared by Genesis Energy as well. The Maori Party policy is to support the development of renewable energy as a key response to both climate change and peak oil. We cannot support this bill. Thank you. 
Hon PANSY WONG (Associate Minister of Energy and Resources) 
: 
 I think the Green Party co-leader Jeanette Fitzsimons actually provided the reason why Parliament should support the repeal of the last Labour Government’s legislation in terms of the emissions trading scheme—the part relating to banning thermal generation. She correctly pointed out that the legislation relating to the thermal ban had so many loopholes that one could drive a bus right through it—it was completely useless. So why should Parliament embrace the retention of part of a piece of legislation when apparently nobody—even the parties that supported it—has confidence in its being effective? In fact it is useless so why should we retain that part of it? 
 The other issue is that Labour—the Opposition—has made much of the fact that this bill has not been sent to a select committee. Let me share with members of Parliament the way that Labour respects the select committee process. When the emissions trading scheme bill was sent to be examined at the select committee the part of the legislation banning thermal generation was actually added in the last very minute despite all the submitters including the Business Council for Sustainable Development which opposed the inclusion at the last minute of the thermal ban. That is not to mention the major sector groups such as the Major Electricity Users Group and the generator group. So Labour did not pay much respect to the select committee process. A bill was sent to a select committee new additions were made and the committee completely ignored the feedback on the legislation from the submitters. 
I am glad once again to be able to take a call in this House to support the legislation that National has been campaigning on—we have made our position very clear. We believe the way to incentivise renewable resources is that thermal generation will eventually be subject to carbon charges and renewable generation will not through the emissions trading scheme that we will develop. That is a very sensible way forward rather than retaining the part of the legislation that even the Green Party says is not workable and is sending all the wrong signals. Of course I hasten to point out that I have not seen Pete Hodgson—who goes on and on about what the Hon Max Bradford did to the electricity industry—in his time as Minister of Energy ever come up with a plan. Even now every winter New Zealanders are still subject to the threat of either a power cut or increases in power prices. I believe that our Minister of Energy the Hon Gerry Brownlee has once again sensibly brought in legislation that sends a clear signal that we support renewable preferences. Once again we believe that to retain a part of a piece of legislation that is not workable and puts our energy supply at risk is not the way to go. I am very happy to support the passage of this legislation. 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
: 
 Members on this side of the House treat the challenge of tackling climate change very seriously because if anyone heard the contribution by the Hon Nick Smith Minister for the Environment they would have had their strongest inclination confirmed that a National-led Government does not believe in a coherent approach to tackle the defining issue of this generation—climate change. We have heard members from all over this House say how important climate change is. We have heard members from across this House say we need to do more for future generations of young New Zealanders. But what we hear from the Government is something that should concern young New Zealanders. It is a signal that I think does not provide leadership and does not lift aspiration to the possibilities of how this country could operate in terms of where it sources its energy. 
The mere fact that we are speaking to the Electricity (Renewable Preference) Repeal Bill shows that the Government will do anything to get energy no matter where it comes from. That is a real concern because the Minister for the Environment made light of the serious challenge confronting our country to reduce greenhouse emissions to better regulate our reliance on new thermal generation and provide and incentivise the landscape to explore and realise renewable energy generation. Instead the Minister claims that by lifting the moratorium on new thermal electricity generation the National-led Government’s commitment to tackle the effects of climate change remains on track. 
I say no. In support of the earlier contribution of my colleague David Parker I say that this bill will do nothing to encourage a coherent step towards a sustainable future. I absolutely agree with statements made by the Maori Party on Maori wanting to take leadership on this issue. The example that she raises with Tuaropaki—and I have talked to the people there and I have seen that they have an absolute commitment in renewable energy—reinforces the view that I present in this House. I know too that in the area of wind generation across the west coast from the north down to the south there are iwi who are looking at how they can better engage in renewable energy generation. 
In the first 2 weeks of this Government we have seen a delay in the introduction of the emissions trading scheme by establishing a special select committee that serves no other purpose than to placate the confidence and supply agreement with ACT. I again draw members’ attention to the contribution made by the leader of the ACT Party. A good 50 percent of his speech was a distraction to many members of the House and to those who were listening to the debate in a very serious way. 
We have also seen the dismissal of the intent of the biofuels sales obligation—putting at risk private sector investment and local jobs in small communities. If this is the Government’s leadership in this area then I will have nothing of it. I know that many more people feel the same way. 
The third thing we have seen in the last 2 weeks is the ramping up of thermal generation; a message that says we should be ramping up thermal generation through the introduction of this bill. There has been much talk in this House about great leadership a brighter future and lifting aspiration. For those words to have real meaning courageous steps in climate change have to be taken; action has to take place. Instead the National-led Government wants to be a fast follower. That is right—a fast follower. Surely we should do more to encourage investment in renewable energy to ramp up our effort in energy conservation and to promote new technology to reduce carbon emissions. There is no sign of this happening under the Government. Instead it chooses to walk quickly into the past forgetting about a sustainable future forgetting about what people think and how this bill might affect them. After all we are here under urgency limiting opportunities for members of the public to hold this Government to account. 
Comments were made earlier—again by the ACT leader—about the issue of the regulatory impact statement. There is nothing of that nature with this bill. The public have had no opportunity for this bill to be heard at a select committee where they can raise their concerns. More important people in the Prime Minister’s own electorate have taken to writing letters to the editor to be able to express their very serious concern of not being able to present this issue to their local member of Parliament. We should be concerned. A local resident in Helensville says: “Local residents and lobby groups like my own have had the brush-off from Mr Key’s electorate office when requesting a meeting to discuss local issues before the election. These include energy and climate change policy relating to the Genesis energy proposal to build a non-renewable energy gas-fired power station at Kaukapakapa. After the election it is too late; the hearing is next month.” His own residents have taken to writing letters to the editor when a simple hearing would do. 
So we should not be surprised that this bill is being put forward under urgency not going to a select committee not enabling local people to have their say not enabling those people whom we purport to represent to share their view on what I think is part of a range of measures that the members of the public deserve to have a say on. Surely a bill with such an impact on the Government’s overall approach to reducing greenhouse emissions should go to a select committee but sadly it will not. That will be the legacy and track record of this National-led Government’s attempt to meet its sustainability challenge. That will be a very sad face. 
Earlier this year in the Prime Minister’s own electorate in Helensville a number of members in his local community just wanted to meet him and that did not happen. Even during the election campaign Mr Key took a balanced approach by sitting on the fence saying one thing to residents and possibly another to his caucus who were busy dealing with the detail of this policy after the election—only after the election. We can only surmise that because this bill is being rushed through in urgency at a time when it deserves public scrutiny. 
MPs come to this House and have the privilege of representing their constituencies and their communities. Sadly for his own constituency the Prime Minister cannot do this; this is the legacy of how the National Government will run the Treasury benches over the next 3 years. We will be back here revisiting National legislation because it has failed this country and the challenge to seriously deal with climate change. 
We cannot have leadership that denies some inevitability about the state of our environment. We cannot be fast followers; we have to be leaders. We cannot be deniers; we have to take responsibility and action. I am a Huntly girl at heart and I was raised there for most of my life. We used to jokingly say that we had the largest light bulb in the country: the Huntly power station. In this House there is no one who would like more than me to see the retiring of the Huntly power station in favour of renewable energy but that decision would need to ensure that communities are better prepared to absorb the impact of meeting new employment opportunities and I hope that that may come through the clean-up of the Waikato River. 
I think this bill does very little to lift aspiration in our country’s efforts and it requires a whole-of-Parliament approach to say that we accept that climate change is an urgent matter that we all must agree to do something on. The lack of leadership provided by the Government is of concern and we need only look to the changes that have been achieved over the last 2 weeks. Gains under Labour were more than aspirational. We took active steps to tackle climate change through recognising the important contribution of renewable energy to supply the energy sector strengthening an energy-efficiency campaign and supporting Green Party initiatives like retrofitting homes and encouraging solar water heating greater investment in public transport introducing a biofuels sales obligation supporting smart procurement initiatives introducing market tools like the emissions trading scheme and encouraging support for new technologies through research and development tax credits. These are just a few of the real steps taken by the Labour-led approach and sadly in only 2 weeks all of them have been abolished and reversed by the National-led Government. Its members are not offering leadership when it matters most to the future of New Zealand. 
CHRIS AUCHINVOLE (National—West Coast-Tasman) 
: 
 I guess anyone listening to the discussion we have been having would wonder what the fuss is about. Earlier we heard from Jeanette Fitzsimons who I thought spoke extremely well when she described the original legislation as toothless from the very beginning. She thought that it would never work and that it was pointless to have it. In that case surely we are meeting the requirements for getting rid of it. The previous speaker Nanaia Mahuta whom I have considerable respect for talked about how important it was to have that legislation. But it does not actually do anything. The reality is that the costs of thermal generation are quite high. I cannot imagine a generator thinking “Oh goody let’s rush into it.” That is not the way it works. 
This is a Government that keeps its word and delivers on its promises. The Opposition sadly needs to get used to that; we will give those members a little bit of time. 
Hon Darren Hughes 
: 2 years 10 months 2½ weeks! 
CHRIS AUCHINVOLE 
: I was thinking more of a 5-year term. I can understand the Opposition being upset at seeing legislation being reversed but let us face it: the fact is that it is mostly rhetoric that is being reversed. The last two bills are good examples of that. As Jeanette Fitzsimons said they are “a bit of fiction” “a bit of a wet paint sign” and “symbolism”. Those were the expressions she used. 
One of the features of the Labour Government was the astonishing increases not only in carbon emissions and the use of thermal power that occurred during those 9 years but also in the prices of domestic power—I believe those price increases were 48 percent. What does the renewable preference that is being repealed actually do? It provides a political cover for a situation that I think the Labour Government did not really wish to admit to. The renewable preference has produced confused public policy. There has been a 180 percent increase in greenhouse gas in the electricity sector during the 9 years of the Labour Government. The right approach surely is to have a policy that provides security of supply. 
Let us look at the ban from a number of points of view: the ban was an unnecessary intervention from the very beginning and it was unnecessary for the electricity market; command and control systems do not work well and have not worked well; this ban puts security of supply at risk; it is thermal generation that New Zealand is reliant on; gas plants like the efficient e3p plant at Huntly can run round the clock and National will leave investment in those plants up to the industry; this legislation does not lead to environmentally sound outcomes because the ban blocks investment in new generation that could potentially be more efficient and emit less carbon than the current one; and the ban is a disincentive for oil and gas exploration because explorers will have less opportunity to offset exploration risks and costs against gas sales if New Zealand bans sales to power stations. Oil exploration is a sensitive activity and it will not take too much before we see explorers and investors going elsewhere. 
The thermal ban provisions were part of the legislation that was introduced as part of the emissions trading scheme and the ban was added at the very last minute which makes it interesting that those members talk about a lack of consultation. The provisions had not been singled out in advance and the industry was taken completely by surprise. The Government is today repealing this legislation which is an intrusion into the electricity market. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 To take up the point of the previous member when he asked what all the fuss was about I thought I would go back to the purpose of the Electricity Act 1992 we are repealing here today and talk a little about that. The purpose of Part 6A of the Act as stated in section 62A “is to reduce the impact of fossil-fuelled thermal electricity generation on climate change by creating a preference for renewable electricity generation through the implementation of a 10-year restriction on new baseload fossil-fuelled thermal electricity generation capacity except where an exemption is appropriate (for example to ensure security of supply).” 
Let us run through that for a moment and just consider some of those things: “to reduce the impact … on climate change”; well I think surely members on this side think that that is a good idea. We have always believed in human-induced climate change. We do not take the “balanced” approach of National members who believe that it is a hoax one day and believable the next and who then come back and repeal all of the climate change legislation. They have a balanced approach on the same day in fact; they change their minds as they go along. 
Hon Gerry Brownlee 
: Same speech different day. 
CHRIS HIPKINS 
: It is a different day—that is right. Mr Brownlee says it is a different day a different position. 
The Act created a preference for renewable electricity generation; I am staggered as to know what the problem with that is. What is the problem with creating a preference for renewable electricity generation? Surely that is something that we must agree on. What on earth is wrong with a preference for renewable electricity generation? But the Minister does not seem to be all that interested in engaging in this kind of discussion or argument. 
The Act also put in a restriction on baseload fossil-fuelled thermal electricity generation. It was saying that our core energy suppliers were expanding our core energy supply. This was not the peak stuff. This was not the stuff we need only in times of really high demand. This was the stuff that basically added to the baseload and the Act was saying that that should not come from thermal electricity except when it was needed to secure supply. What is wrong with that? There does not seem to be anything wrong with that. But no—the Government is going to railroad this repeal bill through without allowing members of the public to have any say on it. 
I take up two other points that Mr Auchinvole raised in his speech. First of all he said that thermal generation was expensive and there would be no clamour to build more thermal generators. It was a very interesting point because then he went on to say that the removal of this restriction would lower power prices. With that kind of logic I am staggered he is not in the new National Cabinet. I am absolutely staggered. 
Hon Darren Hughes 
: Didn’t Max Bradford say the same thing about power prices? 
CHRIS HIPKINS 
: That is right; Max Bradford said a very similar thing did he not? He said that the reforms were going to lower power prices for consumers. Did they result in lower power prices for consumers? No they did not—not in any way. So once again it is another day and there is another bill from this Government denying that climate change is a reality. Government members think that it will all be OK if we just stick our heads in the sand for a little longer. Everything will be fine; ignorance is bliss. 
The Government has failed to answer some of the most basic questions. Do those members actually believe in human-induced climate change? Because anybody listening to this will be totally confused about what the Government’s position is. Do they support renewable energy or not? 
Paul Quinn 
: Yes. 
CHRIS HIPKINS 
: They do! But with the second bill in a row they are doing away with provisions in legislation that support renewable— 
Hon Gerry Brownlee 
: So wrong! 
CHRIS HIPKINS 
: It is so wrong! That is right I say to Mr Brownlee; it is so wrong. So why is the Government doing it? If it is so wrong why is the Government doing it? Renewable energy is integral to New Zealand’s future. It is part of our international reputation as a clean green country. It is something we are all proud of when we go overseas. We come from a clean green country where most of our electricity is produced from renewable sources. That is something I was incredibly proud of when I went around the world. But how on earth can New Zealanders be proud of their country when they are out in the world talking about their clean green status when the Government back home is doing away with all the legislation that has been put in place to really enhance that? 
Our international delegations when they go off to climate change conferences overseas are not up the front any more talking about all of the wonderful things that New Zealand is doing. They are down the back hiding behind the conference sign and hoping that no one will notice them because they are so embarrassed to be representing New Zealand and this Government. The international community has noticed. Has it not noticed? What did Gordon Brown do on John Key’s very first visit to the UK? He introduced a departure charge on flights coming to New Zealand. John Key popped in to visit and oh up popped that departure charge which will penalise and punish the New Zealand tourism industry. It will have a major impact on the Kiwi economy and a major impact on our own airline of course—which we own thanks to the good previous Labour Government. That charge was John Key’s “reward”; I bet that a lot of businesses in New Zealand are hoping that John Key stays home a little more. If that is the kind of response we get when John Key goes off overseas then I think they will be hoping he stays home a little more do members not think? I do not think we need any more of that. 
If Labour had been in Government and Helen Clark had been Prime Minister she could have gone to the UK sat down with Gordon Brown talked about all the wonderful things we are doing and put forward a very compelling case for that departure charge not to be raised. Can John Key do that? No he cannot. He will stand there and say that the Government is not really sure about this climate change thing and that his Government is going to repeal all of the legislation put in place by the previous Government to deal with it but that he does not want that tax to be put on us. But who on earth will take any notice of that? Perhaps he would be better off staying at home and coming to grips with the real issues here. Perhaps Mr Key and his Government would be better off letting the public of New Zealand have a say on this bill rather than trying to ram it through under parliamentary urgency. 
Moana Mackey 
: It’s not going to a select committee. 
CHRIS HIPKINS 
: No apparently it is not going to a select committee. 
Hon Member 
: Another one? 
CHRIS HIPKINS 
: Another one—I know. How many of those have we been dealing with in this House? 
Moana Mackey 
: Doesn’t that make it all of them? 
CHRIS HIPKINS 
: I think that would make it all of the bills we have been dealing with. This Government has not sent a single bill to a select committee—not one single bill. What have we had? We have had the “Ninety-day Fire at Will Bill” and there was an inadequate regulatory impact statement on that bill so the ACT Party is doing very well. There was an education bill that said in the regulatory impact statement that the bill was unnecessary there was a biofuel bill with no regulatory impact statement and now we have this bill with no regulatory impact statement. So we are really really good with our regulatory responsibilities! I think the Government has a Minister for regulatory responsibilities. He is doing pretty well so far is he not? 
Hon Darren Hughes 
: Where is he? 
CHRIS HIPKINS 
: Where is he? He is doing a very good job so far. 
Obviously the public of New Zealand have not had a chance to have a say on this bill so I thought maybe we should give voice to some of the people who have concerns about this legislation because they will not get to come to this Parliament and have a say on it. The Environment and Conservation Organisations of New Zealand—ECO—said: “It is a surprise that National is putting the ETS on hold when it claimed it was their idea to have an emission trading system and that they take climate change seriously.” But I think that that was before the election though was it not? That was one of the things National said before it became the Government. It has changed its mind now. That organisation went on to say: “New Zealand has had reviews nearly every year on climate change policy from 1992 to 1997 until the emissions trading regime was decided on. The ETS combined with the moratorium on large new thermal generation would have for the first time placed a price on carbon and have provided investors in cleaner technology with some degree of certainty.” I thought National was in favour of certainty for business. 
Moana Mackey 
: In theory. 
CHRIS HIPKINS 
: Oh that is another one of the things that National said before the election. It all sounded very good before the election but it is not so good once National got into Government. It is very inconvenient is it not? 
What about the Bluegreens? Whatever happened to the Bluegreens? I am sure they had some views on this. In fact they got Greenpeace to come along and speak to their conference on it. 
Hon Darren Hughes 
: The Bluegreens are dead! 
CHRIS HIPKINS 
: Oh they have disappeared. But what did Greenpeace tell them? It said: “the fact is the ETS will not be enough in itself to prevent inappropriate thermal projects at least in the medium term so we need the disincentive of the Renewables Preference to prevent new emitting investment from being ‘locked in’.” That statement came from the Bluegreens’ conference. Oh but that is another thing; that was before the election. I forgot—how foolish of me to forget. That was one of those things National said before the election; then it became the Government and now it is just doing whatever it likes. It does not have to worry about those pesky members of the public anymore because it can just ram legislation through under urgency without having to worry about any of that public consultation stuff. That is not so important to this Government; it really does not mind about that. 
Hon Darren Hughes 
: That’s the Tolley principle. 
CHRIS HIPKINS 
: That is right—that is the Tolley principle. 
This bill will not lower power prices regardless of the Government’s rhetoric on the issue. It will result in an increased reliance on thermal power which will push up power prices because as Mr Auchinvole said thermal power is expensive. Let us be honest about it—this bill will result in higher power prices. The era of cheap non-renewable energy sources is gone. 
Moana Mackey 
: It’s been a great couple of weeks for the planet. 
CHRIS HIPKINS 
: That is right. Has it not been a great couple of weeks for the planet thanks to this Government here—the climate-change deniers on the opposite side of the House? That is why National is trying to ram this through under urgency and why it does not want the public to have a say because then the public would know that National really does not care about New Zealand’s clean green image it really does not care about renewable energy and it does not care about the state of the planet. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 The ban on new thermal baseload generators is part of the emissions trading scheme as members know and it has the intention of reducing carbon dioxide emissions in New Zealand. This ban has created a scenario that the designers of the policy may not have foreseen and had they foreseen it they may have thought twice. 
Members might quickly disregard the following statement because it comes from a stakeholder in the oil and gas industry: “The Government’s planned 10-year ban on gas-fired base-load power stations is ‘ill-conceived’ posing risks of much higher power prices and risks for the oil and gas sectors power security and the economy.” Todd Energy said that in March this year. Members might quickly disregard that statement but I believe that this policy has led not just to those weaknesses and concerns but also to an environmentally unsound outcome as well. I will explain this to members because they may find that to be a bewildering statement as well. I will tell members why it delivers a worse situation environmentally and socially and why it is an ill-conceived policy. 
The moratorium essentially says to those companies that explore and mine for oil and gas that there is now a diminishing market for their gas. Daily costs to explore for oil and gas are moving upwards towards $1 million per day. That is $1 million a day for helicopters support crews platform costs etc. If one suddenly finds oneself with a swiftly diminishing market then one has lost the serious motivation to invest that sort of money. So exploration and subsequently the supply of gas to the New Zealand market begin to be threatened. 
This of course is OK if one wants to stop the increase of thermal generation. But the problem is that around 50 percent of the plants built since 2000—plants built under the last Government’s oversight—are gas-fired thermal plants. The major players that this affects are Genesis and Contact Energy which have embarked on a project to now import liquefied natural gas (LNG) in order to secure their security of supply for electricity because nearly all of their power stations run on gas. 
The managing director of Todd Energy commented: “Damage to the gas sector will increase gas prices in the long term. Ironically this upward pressure could actually lead to a switch back to coal or other more GHG intensive sources of energy.” Such a greenhouse gas - intensive source of energy is LNG. The Contact Energy and Genesis consortium called Gasbridge is proposing to import LNG to New Plymouth to fuel its gas-fired plants as an insurance policy in case gas supplies run out. 
To produce LNG one has to refrigerate it to minus 162 degrees Celsius ship it in specifically designed tankers from a LNG production plant located in a different place on the planet offload it and through a heat process convert it to gas so that it expands to a volume 600 times greater than what it was stored at. Then one can use it to fire a power generation plant. This process creates a carbon footprint that is far higher than that of natural gas which we source from our own reserves. Indigenous natural gas produces 52 kilograms of carbon dioxide per gigajoule of energy. A full fuel cycle using coal produces 99 kilograms of carbon dioxide. The full fuel cycle analysis on gas through the LNG process showed that the overall emission was 73 kilograms of carbon dioxide per gigajoule of energy. That is a 40 percent increase in greenhouse gas emissions due to the process of production transportation and conversion to gas. This is what is happening in New Plymouth where a consortium wants to establish an LNG terminal because it cannot trust the gas supply as a result of the proposed ban on thermal base generation. 
This moratorium seeks to decrease greenhouse gas emissions but it is actually serving to create the need and opportunity for LNG to come to New Zealand and this will increase greenhouse gas emissions. Although it might not increase them from here it will increase them overseas at production plants and as tankers carry LNG across the planet. Thank you. 
A party vote was called for on the question  
That the Electricity (Renewable Preference) Repeal Bill be now read a first time. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Bill read a first time. 
Second Reading 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 I move  
That the Electricity (Renewable Preference) Repeal Bill be now read a second time 
. It has been very interesting listening to the speeches this evening from those who are opposed to this bill. I would have thought that the real effort that New Zealand should be making in the energy sector was to lower emissions. That is what the game should be all about. The thermal energy ban introduced by the Labour Government is a large and pretty obvious impediment to achieving that particular result. 
I will explain that in a minute but first I want to challenge some of the statements made earlier suggesting that the ban while it was in place was about protecting New Zealand’s clean green image and about making sure that when New Zealanders in the climate change sphere attend international conferences we can tell a so-called good story. A little bit of a look behind the scenes tells a pretty ugly story. In the time that the Labour Government was in office the extent of production of energy from renewable sources fell from about 72 percent to about 66 percent. That is the record of the people who say they care about New Zealand’s clean green image and about being able to say the right sort of rhetoric at international conferences. They simply saw the extent of renewable energy fall. The image that was supposed to be created was that they had great care for the environment but the record shows quite the opposite. 
It is also interesting to note that as this policy has been in place and as the Labour Government struggled with the whole concept of having a vibrant energy policy the retail price for electricity paid by New Zealanders when they turned on the light turned on the heater washed the clothes made the toast boiled the kettle or whatever rose from 1 November 2001 through to 1 November 2008 by a staggering 63 percent; it rose by 63 percent through those 8 years during which Labour was saying it was about protecting our clean green image and about having the right story to tell when we attend international fora on climate change. What is worse is that when that price rise of 63 percent is broken down it works out that electricity prices for consumers rose each year—each of those 8 years—2½ times the rate of inflation. 
Clearly something has been going wrong. The price has been going through the roof and we can also see that the extent of energy generated from renewable sources has fallen. Worse than that the emissions profile of the energy sector has massively increased. 
I know that the opponents of this bill tonight will say that all of that is just because we had a few years of bad hydrology. Well those same years that saw the 63 percent price rise—2½ times the rate of inflation each year—included 4 years when we had a supposedly one-in-60-year scenario to deal with. That indicates gross neglect of the generating capacity of this country. 
What this Government is saying in removing the thermal ban is simply this: what is the elephant in the room— 
Hon Darren Hughes 
: Ha ha! 
Hon GERRY BROWNLEE 
:—and I use that term somewhat advisedly I might say and I say “what” not “who”—in the energy sector? It has to be the large coal-belching plant at Huntly. I can tell members that when that plant was commissioned in 1987 it was to be a peaking plant; it was to come on whenever we needed it. But it has been a baseload plant for some years now running for 7 8 9 10 or more hours a day burning coal as it goes. That plant alone contributes the largest part of the emissions from the energy sector. 
 If we wanted to do something about it the smart thing to do would be to say that that plant would be retired that plant would be stood down and we would meet the costs of replacing it with an e3p plant or some such other plant—a combined-cycle plant. If that were to happen if the megawatt capacity of Huntly coal were replaced by gas New Zealand’s emissions from energy in this year when thermal power has run at extraordinary rates would fall by over 3000 tonnes. Why would we want to have a policy in place that prevents that? That is what the ban does and that is why we are going to repeal it. 
Hon Trevor Mallard 
: Because it would take it down to nothing you fool. 
Hon GERRY BROWNLEE 
: The member over there says that the ban would take the emissions down to nothing. Tell me where the projects are! I ask Mr Mallard to tell me where this country is going to get megawatt capacity in the time that we need it—in the next 5 or 6 years—that is able to be fired up to give electricity to the grid at very short notice. It simply is not there. So the Government is saying that we reject Labour’s idea of belching out lots of carbon dioxide through coal burning over successive years and we are saying to the industry that it should look at some alternatives. 
It gets worse. When we start to consider the response of the Labour Party in Government to emergency generation we might have thought it would say: “Why don’t we build one of those highly efficient combined-cycle gas plants that we could fire up very very quickly”— 
Hon David Parker 
: It’s very expensive when you don’t use them much. 
Hon GERRY BROWNLEE 
: The previous Minister of Energy says it is expensive so let us not put a price on carbon dioxide emission. He does not care; he says it is acceptable to use the solution that his Government came up with. Here is how it works. New Zealand consumers through the levies on their power bills have paid some $230 million over the last 5 years to the Electricity Commission. The Electricity Commission’s response to a requirement that it have generation in reserve was to build a diesel-fired plant at Whirinaki. 
Chris Auchinvole 
: Diesel? 
Hon GERRY BROWNLEE 
: A diesel-fired plant. The “We don’t like thermal energy and let’s clean up the emissions from energy” Labour Government built a diesel-fired plant at Whirinaki. And what did it burn this year? Well it was not 10 million litres of diesel. 
Chris Auchinvole 
: Was it 12? 
Hon GERRY BROWNLEE 
: It was not 12 million; it was closer to 70 million litres. One has to ask what sort of argument against this bill there can be from people who have such a shoddy record. 
We have a determination that the emissions profile from energy will change. We believe that part of that is rapid fuel substitution. We also believe that backing up some of those renewable projects with the speed of thermal generation is going to be very very important because this country cannot go on having power price rises 2½ times the rate of inflation. That is the Labour Government’s record. 
Hon DAVID PARKER (Labour) 
: 
 We heard the last speaker the Hon Gerry Brownlee and the Hon Dr Nick Smith saying that National believed in the 90 percent renewable generation target by 2025 set by the previous Government but that it is going to build more thermal generation. How does that work? How does one increase the percentage from currently two-thirds renewable generation to 90 percent by building more thermal generation? That is what the Electricity (Renewable Preference) Repeal Bill is about. It is about building more thermal generation. Those two propositions are just irreconcilable. Members opposite cannot say they want to get to 90 percent renewable generation but they are going to build more thermal generation too. They cannot do both. The two are absolutely irreconcilable. 
I want to deal with one of the other propositions put by the Hon Gerry Brownlee. He said that the legislation currently prevented retiring old inefficient thermal plant and replacing it with more efficient gas-fired plant. 
Hon Darren Hughes 
: Rubbish! 
Hon DAVID PARKER 
: That is rubbish. The legislation currently expressly allows that as one of the exemptions to the restriction. It expressly deals with it. Repeal the legislation I say to Mr Brownlee and what we get is the new gas-fired power station but not the retirement of Huntly. We get both—that is the problem you see. The problem is that if extra thermal generation is built and the old stuff is not retired we get extra thermal generation. We get increasing not decreasing greenhouse emissions because we have both. 
Hon Gerry Brownlee 
: Rubbish! 
Hon DAVID PARKER 
: “Rubbish!” he says. Well where is the control on Huntly staying when someone else builds a new gas-fired power station? 
Hon Gerry Brownlee 
: Price. 
Hon DAVID PARKER 
: Oh it is price. So why has price not already retired Huntly? The Minister of Energy and Resources cannot answer. 
Hon Gerry Brownlee 
: There’s nothing to replace it silly fellow. 
Hon DAVID PARKER 
: Goodness me! 
The other thing he says is that nowhere else in the world is doing this sort of thing. Again he is wrong. Lots of countries have virtually no renewable generation and have set legislated targets to increase from nothing or close to nothing to 20 or 30 percent. That is a 20 percent increase in renewable generation from nothing. What was the legislation doing? It was effectively legislating to go from our current two-thirds 66 percent renewable generation to 90 percent. That is a 24 percent increase which is not much different from the increase that has been legislated for in other countries when they use renewable preference methodologies to bring forward renewable generation that would not otherwise happen and to avoid increases in thermal-related greenhouse gas emissions. So again the Minister I am afraid will have to take responsibility for increases in thermal-related emissions. 
He said that somehow renewable generation is responsible for the increase in power prices in the last few years. I tell him that what has caused the increase in prices is the rising price of gas. The price at which electricity is dispatched sets the market price in New Zealand. Under our auction system the bid that is the highest of those for electricity that is dispatched is paid to everyone. What sets the price? It is never renewable generation that sets the market price because we all know that once a renewable power station is built its fuel is free. Whether it is water air or geothermal the fuel is free. Once those power stations are built they cost very little to run. Gas-fired and coal-fired power stations always have a fuel cost they have to recover so the gas and coal-fired bids into the market are always the bids that set the market price. It is because the price of gas has doubled following the lifting of price controls following the Maui gas running out. It is still a lot less than average prices for gas overseas. That is why even now New Zealand electricity prices are substantially lower than world averages. Indeed even now our industrial tariff is as cheap as Australia’s although our residential tariff has crept higher. So the idea that it is renewable generation that has bumped up the price of electricity is again wrong; it is the price of gas. Yet the Minister wants us to build more gas-fired power stations. 
The other thing the Minister mentioned was the risk of liquefied natural gas (LNG) importation. How does using more gas decrease the risk of reliance on LNG imports in the future? Is that not twisted logic? I think it is. It cannot be right. If we do not want to run out of gas we should use less not more. If we use more gas we are more likely to run out and to have to import LNG and if New Zealand imports LNG then its electricity prices will for the first time in our history be pegged to international fossil fuel prices. New Zealand’s electricity prices would go up by about double. They would probably be close to double if we had to import LNG. That would be the worst of all futures for New Zealand. Going to renewable generation of course avoids—or minimises—the risk of that being a future reality. 
In terms of constraints and where renewable generation is going to be built I tell members that there are already plans on the books of the major generators to build 1400 megawatts of new renewable generation over the next 5 years and the Minister knows that. 
Hon Gerry Brownlee 
: Where is it? Where are the pegs in the ground? 
Hon DAVID PARKER 
: The geothermal energy which is the biggest source of that new-load growth is in the central North Island. We had a 130-megawatt geothermal facility completed this year bearing in mind that demand growth in New Zealand is about 150 megawatts per annum. If we want to retire the likes of some of the Huntly generators we have to build about 175 megawatts per annum on average for the next period until 2025 to meet that 90 percent renewable figure. A big slice of it will be geothermal. It is already economic because that is what the major generators are investing in. 
Hon Gerry Brownlee 
: Why are they building it? 
Hon DAVID PARKER 
: They are building it. They have just finished one—130 megawatts—this year. There is another one of 200 megawatts already under construction by Mighty River Power. That is next year’s demand growth. Contact Energy has also committed to another large facility at Te Mihi. That is about 600 megawatts that I have just given you. That is 4 years’ demand growth at the rate of 150 megawatts per annum. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Keep the Speaker out of it please. 
Hon DAVID PARKER 
: I apologise Mr Assistant Speaker. In addition we have large amounts of wind power consented. That was one of the successes of the Labour Party’s climate change policy. We brought forward wind power through the projects to reduce emissions. We made it economic before it would otherwise have been economic. It now stands on its own feet. It is economic. Where is it being built? I do not know whether Mr Brownlee has been to Palmerston North recently but if he had a look around there he would see some big wind farms on the horizon. That is one of the places they are being built. 
Hon Gerry Brownlee 
: They were there a long time before you were ever a Minister. 
Hon DAVID PARKER 
: They have been extended within the last year and if the member did not know that then he really needs to do his homework. Makara is the biggest wind farm built in New Zealand so far. It is under construction at the moment. I think its first windmills are due to be producing power early next year and it is set to be completed by the end of next year. 
David Garrett 
: What do the locals think about the Makara wind farm? 
Hon DAVID PARKER 
: Some of the locals did not like the idea but that is true of any project. Some of them did not like it. The wind farm got a consent though and from memory 150 megawatts is being built—but it might be bigger. There are consented sites throughout the South Island. Consents are being sought by Contact Energy for about 500 megawatts of wind power in the North Island. 
There is oodles of renewable generation. But do members know what the biggest risk is to that? The biggest risk is if Todd Energy or one of the other big owners of gas decides: “We’re better off turning that into electricity. We’re going to invest in a gas-fired power station.” If the Government is silly enough to let Genesis proceed with Rodney—it never came to the previous Government for shareholder approval and probably would not have got it; it never got to that point—and it builds a 400 megawatt gas-fired power station then it will close out renewable generation. It is that simple. We are at a fork in the road. If New Zealand goes down the path of more thermal generation we will close out the renewable sources. We will never get to the target National says it has adopted to have 90 percent renewable generation by 2025. There will be rising emissions from electricity when we could have emissions starting to go down from electricity. 
Again I say that if New Zealand cannot get this right there really is no hope that the world will. I find it very depressing to know that the National Government is once again as it was on biofuels the canary in the cage on these issues. If New Zealand does not get it right we have to conclude that there is very little hope that the world will. Our Labour Government was not ready to reach that conclusion. We knew it could be done we had the policy in place to do it and that member’s Government is irresponsibly reversing it. 
Hon PANSY WONG (Associate Minister of Energy and Resources) 
: 
 There was a lot of wind and hot air blowing from the Labour Opposition. If it could be turned into energy we might not need to build any more renewable generation or whatever. After 9 long years the Hon David Parker has said that everything is under control; New Zealand is leading the world. I am sure that New Zealanders will be so glad that Labour is no longer the Government. Mr Parker was trying to tell them that they are lucky that New Zealand’s power prices are very reasonable. Tell that to our senior citizens and the households that year on year are facing the threat of power price increases and power cuts. 
The Labour Party’s mate the Green Party pointed out that the thermal ban in the emissions trading scheme legislation was nothing but a sham so why should it continue to defend the indefensible? I think at least the Green Party’s credential on renewable energy is slightly superior to that of the Labour Opposition. Government members are pleased to say that we do not have to once again support banning or mandating alternatives that will not be viable because the Green Party has already said that the thermal ban is not workable. So why not be honest and remove it from the legislation? The Minister of Energy and Resources the Hon Gerry Brownlee has already pointed out that the emissions trading scheme that National supports will be the pricing signal because thermal generation will attract carbon charges while renewable generation will not. I also hasten to point out that during the 9 years of Labour’s rule we found that a hydro scheme was not able to go ahead— 
Hon Gerry Brownlee 
: Not one. 
Hon PANSY WONG 
: No not one. That was because the Resource Management Act was the legislation that was acting as much as a barrier to renewable generation as to any— 
Hon Gerry Brownlee 
: The Minister was very excited about ferns and things like that. 
Hon PANSY WONG 
: Exactly. Obviously the Minister of Energy and Resources the Hon Gerry Brownlee felt very strongly about that. Not only will National remove this dishonest legislation the thermal ban that the Green Party says will not work but we will advance changes to the Resource Management Act. That will do a lot more to lead to more renewable generation being built. Members on this side of the House are about practical solutions not about slogans and action about leading the world. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I think that was a 3-minute contribution of a possible 10-minute speech and it is fair to say that the member said almost nothing that was intelligible or intelligent during her contribution. 
It is important for the House to realise what we are doing here today. We are taking New Zealand from a position of international leadership first in the biofuels area then in the emissions trading scheme and now in the thermal generation ban which we are removing. We are moving from a position of international leadership and the possibility of having cheaper power prices to having a system where we become more and more reliant on gas. Gas prices of course are dictated very much by oil prices. The thing that we know is that in the future oil prices will go up. They have been up and they have come down but we know that over a 20-year time-scale they will go up. The thing that we also know about gas prices is that they tend to track oil on the way up but they do not fall away in quite the same way afterwards. 
What is happening is that the National Government has chosen to let power prices go up in New Zealand at the rate that they have gone up in recent years. The reason that they went up so fast in recent years was that there was effectively a strike of capital a very small amount of building of power projects as a result of the Bradford reforms of the 1990s. I might ask why we would build extra plants. If the companies knew that they could sit tight with their already established generation and as a result of a shortage of generation have prices go up that means they could get an increased return without risking any investment at all. 
But after the legislation was passed we had quite a rush towards increased generation. Contact Energy one of the companies I was not responsible for announced plans to invest about $3 billion in 1400 megawatts of increased generation over a period of 10 years. It included 500 megawatts of geothermal power. Just to let people know I can tell the House that we need about 175 to 200 megawatts of increased generation each year to keep up with growth. The Greens will disagree; they would probably say that we do not need any or that we should be running down the supply. But with the sort of economic growth that we were averaging under a Labour Government that was roughly what was needed. 
What will happen now because of the removal of this ban is that people will build the plants that are cheapest to build and most expensive to run. It is much much cheaper to build a gas-fired thermal plant than it is to build a geothermal plant for pretty obvious reasons. Companies do not have to drill 5 kilometres down in order to get the steam coming out. But the difference is— 
Chris Tremain 
: Where do you think the gas comes from? 
Hon TREVOR MALLARD 
: Pardon? 
Chris Tremain 
: Where do you think the gas comes from? 
Hon TREVOR MALLARD 
: No no. There is a lot of drilling for gas but for the next few years there is quite an available gas supply. I think in fact the member will know that the problem is somewhat the opposite: some people for a while thought they had some gas they could not get rid of. Notwithstanding the fact that we had an oversupply of gas for a period of time the oil companies managed as they generally can do—and as Todds are experts at doing—to screw the system and get some pretty good returns on it. 
Mighty River Power is probably New Zealand’s most expert company at building geothermal plants. It managed to get its latest project at Kawerau going about I think 5 months early. It is a very very good plant at Kawerau running at peak capacity and it is probably now the cheapest plant in the country to run. The company has a new site that has received consent near Taupo. People were complaining about the Resource Management Act. Do members opposite know how long that one took to go through? 
Hon Gerry Brownlee 
: It was very very fast because there was a limited number of objectors. 
Hon TREVOR MALLARD 
: Six months! It took 6 months to go totally through the Resource Management Act process and there was a limited number of objectors— 
Paul Quinn 
: That’s because all of the landowners had an interest in the plant anyway. 
Hon TREVOR MALLARD 
: That is exactly right; it is exactly the point. Paul Quinn has got it! That is the first time he has got anything in this House. The vast majority of geothermal energy in New Zealand is under Maori land in the Tuwharetoa area mainly—heading through to Waiariki—and those people are desperate to use their resources. But Paul Quinn who has never done a thing for those people in his life objects to that. He thinks that Tuwharetoa should not be allowed to develop their geothermal resources; he is going to block them by having a thermal plant built in John Key’s electorate. That is what he wants; he wants an expensive thermal plant built in John Key’s electorate. That is his preference. He wants to block Tuwharetoa. There might be some local jealousies involved; I do not know about the iwi relationships up there but why that member is so against the people around Turangi and Taupo having some more geothermal power—things that are jointly owned by iwi—I do not understand. It is a system that works very very well. It is working well in Kawerau it is working well in the Resource Management Act consent— 
Paul Quinn 
: Why would I be against it Trevor; I’m part of it. 
Hon TREVOR MALLARD 
: Hey the member will have a heart attack or start crying if he keeps going like that. It is hard to tell with that member what he is going to do. [ 
Interruption 
] Oh he has to be on his feet to cry. 
We know that as at 1 July this year 426 megawatts were under construction and it did not include the Contact plants. So that is enough for 2 or 3 years—189 megawatts of wind power and 237 of geothermal power. Those that were under construction and due by December 2009—that is those due to start in the next period—were for another 188.6 megawatts of wind power and 105 megawatts of geothermal power. There are also another 665 megawatts - worth of consented projects and consent has been applied for in respect of 2875 megawatts. 
The point I am making to the House is that an enormous amount of renewable energy is coming downstream but it will be killed by this legislation because it is cheaper to build a gas-fired plant. These companies are not stupid. If they can get a plant with a lower capital cost with almost a guarantee of the price going up—the price will go up because they are relying on gas and it is inevitable that the price of gas will go up—then these companies will go down that route. 
I find it just amazing that in this House the priority for the Government is to shift away from the things that we can give international leadership in. John Key has asked to have another meeting with Gordon Brown but whether he will get it after calling Gordon Brown a hypocrite yesterday in the House I am not sure. When John Key goes to the UK to see Prime Minister Gordon Brown to say: “Please do not put your tax for environmental reasons on people coming to New Zealand.” he has to go there in good faith. But he will have to disclose that we have removed the emissions trading scheme that we have effectively stopped people from using biodegradable fuel in New Zealand by killing the tallow plant and that at the same time we have switched our production from geothermal to dirty thermal products. I just ask how we can ask the Brits to keep our tourism industry going when we are heading in exactly the opposite direction from what everyone knows has to happen around the world. 
Dr KENNEDY GRAHAM (Green) 
: 
 I rise following the intervention of my co-leader Jeanette Fitzsimons to oppose the Electricity (Renewable Preference) Repeal Bill. I do so in the knowledge that the reasons that have been advanced by this Government have not been found to be convincing. The Minister has indicated his view that the legislation that banned thermal generation amounted to pure symbolism that it put the electricity supply at risk and that it therefore was required to be repealed. The Minister Gerry Brownlee and others among his National colleagues took it upon themselves to criticise Jeanette Fitzsimons’ intervention on the grounds that if the original bill was toothless then it should never have been put in place and that it should be immediately repealed. That is a rather thin point of logic and when I weigh it up in the context of the broader issue of the contribution of this current bill and others to the daunting challenge of combating climate change I find that it is found wanting. 
What I would like to do to try to place a constructive interpretation on both the Government’s position and that of the Opposition is to ask the Minister some questions and to put those questions in the broader context of the wider issue of climate change itself. If we look at the basic facts of climate change—an anthropogenically induced phenomenon that is recognised as a fact through scientific consensus by it seems everybody in this House except for possibly five members—we find that the prognostication is that sea-level rise will occur to the extent of at least 0.5 metres over the next 50 years and that in the event of a more drastic phenomenon of ice-melt in the Arctic in Greenland and in the West Antarctic sea-level rise could possibly occur to the level of anything between 6 metres and 15 metres without any of us knowing the precise probability of that. 
 That possibility is not discounted and it is not discounted in the Intergovernmental Panel on Climate Change recognition—it has not been included in the fourth assessment report simply because it was not yet reflected in the peer-reviewed literature. So we have to recognise that that possibility cannot be discounted. In that event the implications for the physical integrity of the planet and certainly for the integrity of human society as we know it are extraordinarily grave. 
That is all based on an expected global warming of somewhere between 2 and 3 degrees. From that basic point we proceed to the Kyoto Protocol whose binding legal obligations we have assumed. Let nobody in this House be in any way over-impressed by the limited effect the Kyoto Protocol will have on combating climate change. I am happy to be corrected on my facts by experts—other than perhaps those sitting in this House—but my understanding is that of the anticipated 2 to 3 degree increase in temperature the Kyoto Protocol if fully implemented would result in a diminution of somewhere around 0.2 degrees. It follows that the Kyoto Protocol if fully implemented would have a very very modest effect on global warming. 
Because of that every Government and State that is party to the Kyoto Protocol has not only a binding legal obligation but an overwhelming moral obligation to do everything in its power to cut greenhouse gas emissions. Is New Zealand doing that? Let us look at the previous Government’s track record. In the last recorded year there was an increase in greenhouse gas emissions over and above the 1990 level of somewhere around 24 percent. It is projected that that increase will double to somewhere around 47 percent by 2012. So the previous Government has a rather uninspiring record. 
Now we turn to the present Government with its aspirations to meet its recognised Kyoto obligations. Will it meet its aspirations? The Minister of Energy and Resources Gerry Brownlee tells us that the Government is committed in principle to 90 percent renewable electricity generation by 2025. Do the Minister and his Government have a well-thought-through strategy articulated clearly before us to attain 90 percent by 2025? Personally I am less interested in the niceties of precisely what will happen to power generation whether or not this bill is repealed than I am to hear from the Minister on whether he has a credible strategy to attain the goal of 90 percent renewable energy generation by 2025. Are we about to see a strategy that perhaps puts in benchmarks or milestones every 5 years: in 2010 2015 and 2020? I propose to the Minister in a constructive spirit that he take it upon himself to table in the House a proposal by which we can monitor the progress towards 90 percent renewable energy generation by 2025 using 5-year benchmarks. If that were forthcoming then we would be able to take the Government at its word and put faith in the credibility of its stated intent to switch to 90 percent renewable energy generation. I hope that such a proposal is forthcoming; I will genuinely in good faith look to see whether it comes. Thank you. 
DAVID GARRETT (ACT) 
: 
 I am one of the two people in this House who will be directly affected by the lifting of the so-called thermal ban. The other person is the Prime Minister Mr Key who as we all know is the member for Helensville. I live in the Helensville electorate and regularly have a beer at the Kaukapakapa pub where I have to say the so-called Helensville thermal power station is not a popular cause. Both Mr Key and I will have some problems with the repeal of Part 6A of the Electricity Act but of course we are here for a wider purpose. 
Most locals are opposed to the Helensville power station but unfortunately locals oppose everything. Just a second ago I heard a laudatory statement about the latest proposed wind farm. I am not sure whether it is the same one but in the paper this morning there are the usual protests from the residents who live near the latest proposed wind turbine farm. Of course that happens everywhere. 
Unfortunately nimby-ism is alive and well in this country. Whether it is prisons or power stations nobody wants them nearby. But we all like hot showers we all like to have the lights going and we all like to have our heat pumps working. I think that even the Greens and those who live sustainably whatever that means exactly like to have hot showers and to cook their meals on an electric stove. So whether or not we like it we all need electricity. In an ideal world we all would have—and I would have too—solar panels on our roofs to supply all of our electricity needs but sadly the reality is that we just do not have the much vaunted replacements for current energy sources. 
I touched a second ago on wind power. Every time there is a proposal for a wind farm the nimbies come out. There have been complaints about the wind farm in the Manawatu; there are complaints about the wind farms proposed for the South Island. It happens everywhere. As I have said no one in my local area wants a power station to be built down the road. We see these silly billboards talking about our having Christmas trees for 365 days a year even though the thing is proposed to be built 2 kilometres off State Highway 16 where in reality no one will really notice it. But that is the way we do it. 
Tidal generation is another one. I am 50 years old and I recall tidal generation being the next big thing in the 1970s. It was going to be around within 5 years especially in a country like New Zealand which has tidal surges such as those through the entrance to the Kaipara Harbour. I have seen them when I have been out fishing. When I went out there the first time and people told me I would need a two-pound sinker I thought they must have been joking but they were not. The tide through there is tremendous. Well tidal generation is still at the experimental stage. Part of the reason of course is the Resource Management Act. God knows how long those people have been trying to get their experimental turbine in place but I believe they finally have. But 30 years on from the 1970s we are no closer to using water turbines to generate all our electricity. 
We rely heavily in this country on hydro power. I am not a conservationist or tramper—I am a getting a bit long in the tooth for it—but I know many people in the conservation movement in the Royal Forest and Bird Protection Society and other organisations of that kind. I have not heard any of them suggest we should dam another river. As far as I am aware they all say that all the rivers that do not have major conservation values have been dammed. So there is hydro power gone. 
What about nuclear? As I said in an earlier contribution in the House the local Greens get very green when we talk about nuclear but the European Greens have said that it is a great idea and that in fact it is the most green alternative. The local Greens do not agree and funnily enough I agree with them. It is not a good idea for a number of reasons. There are intractable problems with waste and as far as I am aware there has been no sensible solution to that. I lived in Tonga for 4 years and the King of Tonga proposed that a dormant volcano be the world’s nuclear waste disposal dump. That was one of the silliest proposals but I have heard of other proposals that are almost as silly. No one has offered a good proposal for nuclear waste. 
We live in an earthquake zone. As members will know the Japanese recently suffered a major earthquake— 
John Hayes 
: Were you the court jester? 
DAVID GARRETT 
: —no I was never paid enough—and there were major concerns about damage. But one of the things that very few people mention about nuclear stations is terrorist risk. People go on about the fail-safe protections of nuclear plants but they are all predicated on one thing and that is that the operators of the plants do not want them to fail so they have seven or eight fail-safe back-up mechanisms. But if we have terrorists who are prepared to die then it does not matter whether there are 27 fail-safe mechanisms they will come in and blow the rest of us up as well. 
Hon Judith Collins 
: If they want to die why don’t they just stay at home and do it? 
DAVID GARRETT 
: I agree with that. 
I have gone through wind power nuclear power and hydro power. What does that leave in a country like ours? It leaves gas oil and coal. Oil is pretty dirty. 
John Hayes 
: There is hydro. 
DAVID GARRETT 
: We went through hydro. Oil is pretty dirty so that leaves gas and coal. I understand that the technology for— 
Jeanette Fitzsimons 
: Coal is even dirtier. 
DAVID GARRETT 
: I am told that the technology for scrubbing coal is now advancing at a great rate as it all is and that is my next point. As to gas I can remember that not that long ago liquefied petroleum gas which is the same gas we are talking about for firing gas-fired power stations was touted as the green alternative. 
Jeanette Fitzsimons 
: Different gas. 
DAVID GARRETT 
: A different gas? Oh OK. 
Jeanette Fitzsimons 
: Yes propane not methane. 
DAVID GARRETT 
: There is a big difference in emissions is there? It is still a lot cleaner than oil and it is a lot cleaner than coal. 
Paul Quinn 
: This is today’s education. 
DAVID GARRETT 
: It is good is it not? The removal of emissions from the burning of gas is a rapidly evolving technology. As I have said it is a lot cleaner than the coal alternative. 
I believe we have 1500 years’ worth of coal in New Zealand and I can see that getting burnt at some stage but not yet. The technology is still developing. Everybody realises that for a whole host of reasons it is desirable that we have alternatives to fossil fuel burning. As I said in a contribution on an earlier bill I would be delighted if we could all burn 100 percent biofuels tomorrow but the reality is that the technology is not there. I think that its time will come but that time is not now. 
Thermal generation is a very sensible alternative in the short term. The life of a power station is 20 or 30 years. We might as well burn the gas. It is sitting in the ground. It is a pretty clean alternative. It is not the cleanest but it is a pretty clean alternative. The technology is advancing. Let us take the Kaukapakapa or Helensville station—by the time it has reached the end of its natural life or probably before we will have much better technology and maybe even tidal generation will finally have come. But right now gas is a pretty good alternative. ACT supports this Electricity (Renewable Preference) Repeal Bill to allow us to keep on having hot showers in the meantime. Thank you. 
CHRIS AUCHINVOLE (National—West Coast-Tasman) 
: 
 I would like to correct a comment that I made last time I spoke. I said that the retail price rise was 48 percent but after listening to the Minister I realise that I was wrong. The retail price rise was not 48 percent it was 63 percent from 1 November 2001 to 1 November 2008. 
Hon Maurice Williamson 
: Well the member should resign. 
CHRIS AUCHINVOLE 
: The member should not say that remark too loudly. There have been 4 years in which we have had a one-in-60-year near crisis in supply. Huntly is the biggest generator of emissions. If the bill we are now proposing were not passed we would not have any prospect of changing to something like the e3p plant which would dramatically reduce the generation of greenhouse gases. Again this is an act of honesty on the part of the Government. We are removing a piece of inert legislation. 
I listened with interest to Mr Mallard who talked about exercising international leadership. He also introduced a new phrase that I did not hear in the electricity debate when we were sitting on the other side of the House. Whenever we charged the previous Government with having insufficient supply and insufficient capacity we were told that everything was all right. Mr Parker kept saying that there was adequate generation capacity and that National’s criticism was ill-founded. But from listening to Mr Mallard now I understand that it was a capital strike. That was the reason for generation not being developed over the period of Labour’s 9 years. 
It seems to me that we are now having a little bit of a history rewrite; it was a capital strike. I do not think that will wash. But again there are a range of views on the effect of power generation systems. Mr Mallard referred in his speech to the United Kingdom. I understand that it is having a burst of enthusiasm for hydro electricity generation over there at the moment. I was told on what I think is fairly good authority—although I do not know the veracity of it—that the Brits are planning hydro schemes on 1000 Scottish rivers. [ 
Interruption 
] Aye and it is not just the fishing. I have to tell the House that by passing this bill this Government will meet with the approval of a group of environmental enthusiasts on the West Coast whose preference will be for thermal rather than hydro. Before the election I was approached by this particular group and asked whether we would make a commitment to bringing back thermal generation and I can assure the House that they are very enthusiastic environmentalists. 
Dr Paul Hutchison 
: But a lot of them are out of work on the West Coast. 
CHRIS AUCHINVOLE 
: No no these are a very dedicated group of people and I frequently discuss things with them. They are dedicated to river use. They are kayakers and rafters and they see nothing wrong with developing clean-coal technology for power production. They will be particularly happy to see this bill go through. 
Hon Darren Hughes 
: What does this mean for the West Coast? 
CHRIS AUCHINVOLE 
: We will measure that in a future speech. We still have another reading to do and I will certainly include that in my next speech. There is a wide range of views beyond the myopic view of Labour. In spite of Mr Parker wringing his hands over the demands of the increasing population the reality is that the increasing population demands energy supply. To put a block on it with legislation is like saying that we can stop the tide from ebbing and flowing and we cannot. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 It is always an honour to follow such an eloquent speaker from the Government. I would like to take up the theme of rising power prices. 
Paul Quinn 
: Chapter 3 of chapter 3! 
CHRIS HIPKINS 
: Is that the best the member can come up with? 
I would like to take up the theme of rising power prices and what has contributed to those. We need to face up to the reality that the era of cheap electricity generated by non-renewable sources is over. 
Actually one of the big drivers behind the recent significant increases in power prices has been the end of cheap Maui gas. If we look at the history of what contributed to that we see that way back when the Maui gasfield was first developed the then National Government under a gentleman called Robert Muldoon I believe his name was decided to fix the price of Maui gas. All of the gas coming out of that field was at a fixed price. And it was fixed for a very very long time because the field was such a large one. What that did was artificially suppress the price of all the other natural gas throughout the country. It made it uneconomic to explore other gasfields—and any exploration company will tell members that. The Maui gasfield was effectively New Zealand’s only major gasfield because it was not economic to explore any others and it was not economic to start drilling wells. When that gas started to run out and that artificial price constraint came off suddenly it become much more economic to drill other wells and the price of gas went up because the gas coming out of those other fields was much more expensive. That was a major contributor to the increase in power prices. 
That highlights for us that we will never get cheaper power prices by relying on non-renewable energy sources. If we want cheaper power then renewable energy has to be one of the key ways to go. We have to look at sources such as wind. Once wind generation is in place it is a relatively cheap source of energy. The member from ACT David Garrett talked a little bit about the nimby approach and claimed that rather than try to find places where we can put wind turbines the solution is to do away with the Resource Management Act so that people do not have a say at all. So we need to look at renewable energy sources. 
We also need to face up to a couple of the other realities about gas and about burning fossil fuels. Burning natural gas in an electricity plant is one of the least efficient ways of using natural gas. Even if we say that it is worth using natural gas—that we have a supply of natural gas and we should use it—burning it in a power plant is one of the least efficient ways that we can use it. If one burns it where it is used—in the home under a hot-water cylinder or on a hob or whatever—that is a lot more efficient. We waste a lot of gas if we burn it in a power plant because we then have to transmit it to the point where it will be used—to the home or the industrial user. That is very inefficient because we lose a lot of it through the transmission of it and we lose a lot of it through converting it from one type of energy to another. It is incredibly wasteful. 
Of course we see the nimby approach again in that not many National Party people seem keen to have high voltage power cables go through their land. I have not seen very many National Party members standing up and arguing for that! I would like to take up—[ 
Interruption 
] There we go! That certainly woke them up; I wondered where they had gone but they are back. It is good to know that Government members are on the job and wide awake. I would like to pick up one of the comments that the member from ACT Mr Garrett made. He said: “I am not [much of] a conservationist … I am getting a bit long in the tooth for it”. Is that not a revealing statement: “I am not [much of] a conservationist … I am getting a bit long in the tooth for it”? 
David Garrett 
: I actually meant a tramper. 
CHRIS HIPKINS 
: Oh right. I thought he was saying that once we get a bit older we do not have to worry about what comes next we do not have to worry about saving the planet or any of those pesky little things; we do just what we like— 
Hon Darren Hughes 
: Sounds like Maurice. 
CHRIS HIPKINS 
: —and do not worry about what kind of state we leave the planet in. Speaking of Maurice Williamson I think he should take the next call and give us his views on climate change. 
Hon Member 
: He’s not allowed. 
CHRIS HIPKINS 
: Oh that is such a shame because it would be good to know what National really thinks. I know that Maurice Williamson is a very very honest member of National and we can rely on him to stand up and tell the truth. I would really like Maurice Williamson to stand up and give us his views on climate change. I think they would be incredibly revealing. But he is not allowed to and that is such a shame for this House and for the democratic process. 
Hon Darren Hughes 
: That is so 6 years ago though. 
CHRIS HIPKINS 
: That is right—it is so 6 years ago. 
This Government really does not have any vision when it comes to dealing with climate change and it really does not have any vision when it comes to promoting renewable energy and we have seen that twice today. We have seen that in this bill. Instead of promoting renewable energy Government members would rather go back to using fossil fuels. We saw it in the earlier biofuels bill. They are not really into biofuels either; they are not really into alternative fuel sources for our transport and all those things. They would rather bury their heads in the sand and pretend that climate change is not happening. There is no real issue of climate change according to the National Government and its good friends from the ACT Party. What is more those members are not very interested in encouraging research and development on our clean green future. That is a real shame for New Zealand. We could be world leaders in this stuff but National members do not want to be world leaders. They would rather wait and see what happens. When we are all up to our necks in it they will be saying: “Wasn’t it good that we didn’t show any leadership? We are one of the first countries to drown but that’s all right. We didn’t show any leadership but never mind.” 
They do not have any commitment to energy efficiency either. All of these issues are related. Those members do not have much commitment to energy efficiency. That is why they scrapped the home insulation scheme. We have heard a number of members opposite talk about nice warm homes and people being able to afford electricity to have nice warm homes. But what did they do? They scrapped the home insulation scheme. They scrapped the extra money that would have gone into the home insulation scheme. No we are not going to live in nice warm homes any more under this National Government—at least not unless we can afford to insulate them ourselves. National members are not really interested in that at all. 
So what is this bill all about? This bill is being rammed through under parliamentary urgency as has happened with every bill that this Government has passed—every piece of legislation. I think that is a really important point for the people at home who are listening to the radio or watching Parliament TV. [ 
Interruption 
] That is right—on a Wednesday night. This Government has yet to pass a bill using the democratic processes of this House; it has yet to send a bill to a select committee where people can have a say. Government members are not really interested in hearing what members of the public have to say. They do not trust the people. They are not interested in their views. They won the election and they will do whatever they like. It was in their manifesto like their tax plan. 
H V Ross Robertson 
: I raise a point of order Mr Speaker. I am sorry to interrupt the member but you yourself have drawn to the attention of the House on at least three occasions now that there is continual interjection from the other side of the House. If members on that side would look at Speakers’ rulings 57/3 they would know that interjections are out of order unless they are rare and reasonable relevant and restrained. A running commentary is totally out of order. That is the first point. The second point of order is that a number of new members—and I accept that they will not know the rules—have moved seats in order to facilitate interjection and are not in their own seats. They are also out of order and I hope you will bring them to order. 
Mr DEPUTY SPEAKER 
: I thank the member for those points. I have brought to members’ attention on a number of occasions that there is too much barracking and barracking is out of order. The point that the member makes is very correct: members cannot move to a seat that gives them an advantage. Members of the Government have moved seats and have been barracking. Although you can sit in any seat you wish you cannot interject from a seat that gives you an advantage compared with where you normally sit. 
CHRIS HIPKINS 
: It is unbelievable that right at the very beginning of the Government’s term the new Prime Minister the new Minister of Tourism comes along to this Parliament with two pieces of legislation that absolutely ransack our reputation as a clean green country. Two of the first pieces of legislation that his Government wants to pass will absolutely dent our clean green image overseas. This is recklessness it is backwards-looking legislation and it is another nail in the coffin of our international climate change credibility which this Government does not seem the slightest bit interested in. It is backwards looking it is unnecessary and these energy policies are putting our children’s future at risk. Future generations deserve the same clean environment that we grew up with. That does not appear to be something that this Government is committed to or interested in. It is not interested in renewable energy. It is not interested in home insulation. It is not interested in climate change at all really. In fact the Prime Minister of New Zealand thinks it is a hoax but on another day he thinks it is not and then he does and then he does not. 
Who knows what the Government members really think because unfortunately Maurice Williamson is not willing to stand up and tell us. He might be willing to take the next call. He is ready! He is ready to roll. Maurice Williamson is going to stand up and give us the National Party’s real view on climate change and we are all looking forward to hearing it. 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
: 
 Before I begin my contribution I tell the new member Chris Hipkins that I am a very strong believer in climate change. I always have been and I always will be. I believe the climate has always changed and if it stops changing then we will be in deep shtook. 
I think the measure that we are debating tonight is very very important on one basis alone: it is something we committed to do during the election campaign. I know that does not sit well with the Labour Party and I know it would be really churlish of me to do the Michael Cullen line tonight—“We won. You lost. Eat that!”—so I will not. Nor would we want to be that churlish. But we made it very clear with regard to energy sources that the best method of determining what was right was a general market model based on all of the parameters including carbon emissions being taken into account not some artificial ban that said that as one particular mode of generation is evil we are cutting it out—even if in fact the evidence over time showed that some of the generation methods might actually replace some of the very old and very heavy carbon-emitting coal-burning methods. 
Members from the other side do not like that. They have a pre-defined position that they will stick to and control. I understand that the Greens are opposing this measure but I do not know of any of their members who do not use electricity and I do not know of any of their members who do not think that some of the modern progress society has made from the benefits of electricity is valuable. Yet they come along and try to have us all living in sackcloth and ashes because they think it is so evil and so wrong to be using some of these modes of generation. 
National’s view is very simple on this: a market model is the best way to determine outcomes. In fact best generation will be that which produces the least emissions at the best cost and at the best rate for society. This artificial ban which was put in force by the previous Labour Government was exactly that—an artificial ban. It was trying to make everybody feel good. Labour members say that this particular method is wrong and everything else is better but they know in their hearts that that is not right. Labour members know that that artificial ban is not right and that we are best to go through each of the modes. My personal preference is hydroelectricity. I still think there are options for hydroelectricity in this country and I would love to think about how it would be if 50 years ago we had taken the “We do not want hydroelectricity” position. If the Greens had had their way 50 years ago we would not even have the dams that we currently have. Yes they are intrusive but they are a hell of a lot less intrusive than some of the other methods of generation. 
In this Electricity (Renewable Preference) Repeal Bill we have said that we will remove the ban on thermal generation and move to a sensible balanced and focused approach to the energy needs of the nation. I want any member of this House to get up tonight and say that he or she does not care about the energy needs of the nation if we are to compete in the world of the future and be a participant on the world stage or care about what the cost of generating that energy is and that he or she will just be stuck in some myopic absolutely elementary view of the world that says: “I will not allow things that I have decided should not occur.” From my perspective that is exactly where New Zealand cannot be. 
We have to look at every mode of generation. We have to look at cost-benefit ratios of those modes. Yes I accept that in the line items of those spreadsheets there has to be the carbon cost—of course there does. But if in the end one particular mode is beneficial to this nation then having an artificial approach of “I have come to Parliament with a ban and I will stop this.” is simply a bizarre way to go. 
National saw that; it said at the election that there was not a secret agenda. We said that the ban is wrong and artificial and this legislation moves accordingly. I am very very happy to be a member of a caucus a party and even a coalition Government that wants to look at highly efficient forms of generation to look at those that contribute as little as possible to our greenhouse gases and to not put in place an artificial ban. 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
: 
 Under normal circumstances the Electricity (Renewable Preference) Repeal Bill would have gone to a select committee and we would have had submissions from the public. Views opinions and evidence would have been canvassed more information would have been gathered and there would have been time for honourable members to consider the evidence and the information to prepare a report and to bring it back to this House so that we could have an informed debate on the issues we are now addressing in the House. We cannot do that so we are forced under urgency to have a discussion and a debate on some very serious issues. 
I heard the member Maurice Williamson say that he like us supports the pursuit of renewable energy sources. We can all agree on that—the question is about the methods we use to get there. For that same member then to say we were closing our eyes to our reliance on electricity or putting a ban on thermal energy only and closing our eyes to the real opportunity there—which is greater demand in the electricity market—is I think very myopic in itself. I say to Mr Williamson that we know we have to shift the frame. That is what the future of energy reliance will look like in a new generation. But the member might not understand that; when we look at members sitting in the House proportionally we see that the new generation view of what the future vision of electricity supply might look like is probably coming from the views represented in the Opposition. 
Hon Members 
: Ha ha! 
Hon NANAIA MAHUTA 
: I am making a very serious point. When members opposite talk about other forms of electricity generation and about looking at renewable generation we would agree on those. But we differ on the method and in terms of the ban we are saying that putting a ban on thermal generation just highlights the fact that thermal generation is a higher carbon emitter than other sources of energy generation. That is quite a simple point. 
For anybody listening to this debate and probably trying to work out what is really being said I point out that only the Labour Opposition and members of the Green Party are taking this issue seriously are putting a comprehensive and coherent range of tools at the front and centre of tackling the issues of climate change and are providing the types of sustained arguments that we have provided over the last 2 weeks. That is an important point because if we look at the views out there in the community on this particular move by the Government we see that the Sustainable Electricity Association New Zealand said in respect of this move by the Government: “The government will face more big power price hikes like Genesis’s 9 per cent rise unless it acts quickly to encourage more renewable generation”. That remark was made today by the chairman of the Sustainable Electricity Association Brendan Winitana. He went on to say: “Overturning the thermal power station ban is only a short term solution.” That might appeal to the supporters the big backers of the Government but it does not provide a comprehensive vision about what the Government will do and what steps it will take to tackle the very real challenge of climate change and the effects on our environment. 
Brendan Winitana went on to say: “As the Prime Minister acknowledges we need more renewable generation. That’s why he should be looking at small scale renewable generation as part of the solution. … Importantly small scale renewables will mean less thermal generation and so lower emissions. It’s a win-win for the environment and power consumers.” That is the balance that this Opposition is looking for I tell Mr Williamson not the balance the member is saying is thermal generation at all costs. Meanwhile by the way we also support looking at other renewable energy sources. It just does not add up; it is a really important point in terms of ensuring that the public have a say on this because we just cannot ignore the informed views of people out there who have long-standing reputations on issues to do with the environment. 
Let us take another view—that of the Environment and Conservation Organisations of New Zealand: “Local Government has embarked on consultative processes under both the Resource Management Act and the Local Government Act allowing communities to define the objectives yet Mr Hide as Local Government Minister is likely to want to override them. ‘The communities and the environment will suffer’ said ECO spokesperson Cath Wallace. The Resource Management Act has an important role in protecting New Zealand’s threatened biodiversity improving water quality air quality and making communities more sustainable. National and ACT by putting on hold climate change action and reviewing the emissions trading regime is making New Zealand an irrelevancy in international negotiations in the lead-up to the crucial Denmark meeting on Climate Change at the end of next year 2009…”. 
So what is the Government not listening to? It is certainly not listening to the voice of the public; that is why we are under urgency. It is certainly not hearing the very serious views expressed by Opposition members in this House and Government members are certainly burying their heads in the sand on this challenge of meeting climate change. And what for? National members want to signal to their supporters that yes National has won the election and yes the ship is turning in a different direction. The ship is turning in a different direction with a new leader at the helm—Mr Key. And how have they signalled this? Their ship is turning with a new leader at the helm and what are they doing? They are turning and reversing decisions on climate change through delaying the introduction of the emissions trading scheme and through the setting up of a special select committee on climate change. What are they doing? They are removing the biofuel sales obligation that would help to reduce our reliance on petroleum oil through fostering alternative biofuel sources. What are they doing? They are repealing the Electricity (Renewable Preference) Amendment Act that places a 10-year moratorium on new fossil-fuelled thermal electricity generating capacity. Their ship is turning; that is all this is about. This is the symbolism that the National Party wants to show. 
It is just before Christmas so we have to ask ourselves what is so urgent about this legislation that National has to ram it through under urgency with no public participation and no views exhausted and with respect with very very little or limited debate. It is all about symbolism; that is all it is. I want to make that point because the Act the Government is actually seeking to repeal includes quite an interesting provision around public consultation. I heard the member Pansy Wong; I listened very carefully to her when she said: “It’s OK. Renewable projects will go through under the RMA.” But what she has not told the public is that the National Government wants to gut the Resource Management Act in order to be able to streamline a whole lot of decisions on a number of nationally identified projects that the Government will identify as important so what will probably go will be public consultation. [ 
Interruption 
] I challenge Nick Smith to say that public consultation will not go under the reforms he is proposing in the months ahead. 
Hon Dr Nick Smith 
: Absolutely. 
Hon NANAIA MAHUTA 
: I challenge that member to stand up in the House to say “absolutely”. Is that member going to repeal any provision relating to public consultation and the Resource Management Act? Will the member take a question? There is silence. So that is indicative that there is a strong intention to remove public consultation when National amends the Resource Management Act. We should be very concerned because this will be about National ramming through its projects for its mates so that it can show that the ship has turned in a wholly different direction and that there is a new leader at the helm. Climate change is not at the front and centre of National members’ decision making and they have proved it. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 I am thankful for the opportunity to speak on the Electricity (Renewable Preference) Repeal Bill. I congratulate the Hon Gerry Brownlee for the elegant brevity of this bill. What a marked contrast to Labour’s emissions trading scheme legislation! How many pages was it? About 600 or 700— 
Hon Maurice Williamson 
: That was just the amendments. 
Dr PAUL HUTCHISON 
: No there were something like 1863 last-minute amendments. But I was making the point that it was very good to see the elegant brevity of this bill which is 2 pages long. 
This bill repeals Part 6A of the Electricity Act 1992 which was added by the enormous tome that was Labour’s climate change legislation. It will remove a barrier to investment in new baseload fossil-fuelled thermal electricity generation plant. It is very important to remember that Labour’s thermal ban allowed Huntly power station to continue burning coal. The Hon Nanaia Mahuta should be aware of this—as anyone should be. Labour had not turned the ship—or the waka as the case may be—around at all. The provisions allowed Huntly to continue burning coal. The point I want to make is that using gas is twice as efficient as coal— 
Hon Dr Nick Smith 
: Three times! 
Dr PAUL HUTCHISON 
: Well I did some investigations this afternoon and the official figure was that it is at least twice as efficient in terms of emissions per megawatt of power generated. There is a certain madness in what the last Labour Government did. 
I quote from an article from 13 October 2008—a time when New Zealand was exposed to extraordinary seasonal weather patterns—“If it wasn’t for existing baseload gas and coal fired thermal power stations blackouts would have occurred. Rather than banning baseload thermal plant we should be encouraging more diversity for electricity generation; subject to generation investors themselves factoring in future carbon cost risks.” National has committed to an emissions trading scheme. If we go back to the 1990s we see that it was the National Government that signed up to Kyoto; we have committed to abiding by our international obligations. But we expect a rational response and not one driven by sheer ideology as in the case in question. Who in their right mind would ban an efficient method of generating power in favour of one that was over twice as inefficient? 
Hon Maurice Williamson 
: Who would? 
Dr PAUL HUTCHISON 
: It is a good question. Who would do it? Maybe the Hon Maurice Williamson could tell us. 
Hon Maurice Williamson 
: No I can’t. 
Dr PAUL HUTCHISON 
: No he cannot. Well I thought it was the Labour Government that did it. 
I quote a media release from the Major Electricity Users Group that came out on 13 October 2008 before the general election: “Ban on thermal stations a regulatory nightmare”. The quote is from Ralph Matthes. 
Hon Steve Chadwick 
: It’s a lobby group that has got its way now. 
Dr PAUL HUTCHISON 
: The Hon Steve Chadwick says that it is a lobby group. But after all it is the Major Electricity Users Group. Surely it is a group that is concerned about consumers and not concerned about straight ideology. Even if the price of power were twice as much the Labour Government would have forged ahead and made New Zealand consumers pay for it but pragmatism has to be shown if we are to have an emissions trading scheme in this country that is to some degree realistic. 
 The point made by Ralph Matthes was that “The discussion paper is a reminder that the legislative ban on new thermal power stations is all about reducing carbon emissions no matter what the additional economic cost to New Zealanders.” Unfortunately that was the attitude taken by Minister Parker at the time. Matthes says that “The ban on new thermal power stations is over the top.” He goes on to say that “The ban on thermal has had a chilling effect on investment in petroleum exploration. The timing of the ban when capital markets world wide are struggling to attract new investment couldn’t have come at a worse time. When most other countries are happy to migrate from largely coal based to gas based power plants New Zealand’s approach of saying no to baseload gas but embracing weather dependent new hydro and wind generation is foolhardy.” 
The second article I draw members’ attention to is from the  
Independent Financial Review 
 back in April 2008: “Government has head in the sand over emissions”. The author says—and this may be unparliamentary but I am quoting it—“Sniff sniff! Can anyone smell hypocrisy? There is more than a whiff of hypocrisy to the government’s energy strategy. It seems that on many fronts the government wants to reduce carbon emissions at home but is quite happy to make money from its own state-owned enterprises exporting fossil fuels for use overseas.” 
Hon Pete Hodgson 
: Who is the author? 
Dr PAUL HUTCHISON 
: I say to former Minister Hodgson that his Government was quite happy to export coal to Korea to Indonesia— 
Hon David Parker 
: Japan. 
Dr PAUL HUTCHISON 
: —to Japan and to China and was quite happy to do so as long as it was not responsible for the emissions. 
Hon Pete Hodgson 
: Who are you quoting Paul? 
Dr PAUL HUTCHISON 
: I am quoting a fellow by the name of John Pfahlert—I think that is how it is pronounced. 
Hon Pete Hodgson 
: Pfahlert—we know him. 
Dr PAUL HUTCHISON 
: Well he is a very good thinker. The point he is making is that the Government is just being—I cannot use the “h” word again— 
Hon Maurice Williamson 
: Oh go on! 
Dr PAUL HUTCHISON 
: No I could not do that. In his words “they can clip the royalty payment ticket while conveniently overlooking the fact the gas or oil will be used to fire CO2-emmitting power stations in Japan Korea and China.” 
The very last issue I point to is that the Labour Government was great at talking the talk but the record shows that 74 percent of new generation over the last few years has been thermal. That is quite extraordinary. Now suddenly Labour members want to ban it. They want to ban it in favour of a method that is twice as inefficient. That seems to be plain barmy. Thank you. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 It is very easy to demolish things. It is very easy to repeal things. It does not take very long to destroy things. It takes a lot more creativity time and effort to actually build things up. I guess we could say that the one good feature that this Electricity (Renewable Preference) Repeal Bill has is its brevity. Part 1 consists of four words. In essence the entire bill consists of four words but those four words have quite an effect. 
I want to go back to something the Hon Dr Nick Smith said in his first reading speech on the bill because it was a very significant few words. He said “the genesis of this bill” several times. We know about the genesis of this bill; we know that Genesis was the genesis of this bill. We know that this repeal bill is being rushed through urgency because Genesis—one of the three State-owned power companies—plans to build the biggest gas-fired power station ever in New Zealand’s history up on the Kaipara. It is concerned that under this bill it would have to apply for permission to do so. Of course Genesis is New Zealand’s fossil generator. It runs the Huntly power station burning the coal that produces the majority of our electricity greenhouse emissions. Genesis runs e3p the gas-fired station that produces some more of our carbon dioxide emissions. 
Because Genesis has been focused on fossil fuels for so long it has not developed expertise in geothermal and wind and it has missed the boat in terms of getting access to the best sites in New Zealand where those renewable sources are. This plant is not about New Zealand’s needs for electricity; we could easily demonstrate that this plant is not needed for New Zealand’s electricity supply. This plant is about Genesis’s profits. Why is it that Genesis has to make profits? It goes back to a certain Max Bradford who split up an integrated efficient single national generator into five profit-making entities that had to compete. Although it might be very sensible for the power consumers and for New Zealand’s industry to let those businesses that have expertise in renewable energy like geothermal and wind to get on and build more in fact Genesis has to build more in order to compete. That is what this bill is all about. No other generator wants to build fossil generators at the moment. 
Meridian has already positioned itself as a wholly renewable generator is proud of it and trades on that. People have switched power companies just to buy from Meridian because it is wholly renewable. TrustPower is also totally renewable but it is quite small. Contact Energy is also a fossil generator and it has some gas-fired plants. But members of Contact Energy came to see me quite some time back before this part of the bill was even drafted and said that they already had consent for a new gas-fired power station they were going to build in Otahuhu. They decided to put it on the back-burner because they thought it was better to build geothermal and wind and they could build enough geothermal and wind for New Zealand’s needs without having to build any more fossil as long as they could get them through the consent process and they are getting them through the consent process just fine. So Contact Energy is building renewable generation even though it is a fossil generator. Mighty River Power has hydro and a lot of geothermal is into a lot more geothermal and is not proposing any fossil power stations. 
There is only Genesis and Genesis is the genesis of this bill. If it builds its nearly 500-megawatt plant which is very big up on the Kaipara what will happen to the New Zealand electricity system? First the next renewable energy power plant will not be built because if there is a big fossil plant sitting there that is able to run nobody is going to invest money in renewable generation as it will corner the market first. We will have an oversupply. Of course the Major Electricity Users Group wants these stations to be built because it wants an oversupply of electricity to bring the price down as generators desperately try to sell it to someone. That is what will benefit its members. That does not benefit New Zealand; New Zealand still has to pay all that unnecessary capital cost. 
The Government says it supports the 90 percent renewable generation target. If that is true it simply has not thought through its position. We have done the numbers. We did the numbers with the Ministry of Economic Development and the Energy Efficiency and Conservation Authority. It is not possible to meet that target if the Genesis plant is built without closing a lot of other perfectly good gas-fired power stations. When we project forward the growth rate in electricity demand and we look at how we would get from 70 percent or a bit less to 90 percent by 2025 we find that we not only need to close the Huntly power station which would be a very good idea but we need to close another of the existing gas plants as well replace it with renewable generation and build no more fossil plants. So the Government cannot possibly support the target of 90 percent renewable energy unless it is planning for people to build more fossil plants just in order to close perfectly good ones that are operating already. There are plenty of renewable energy plants to build. Some are being built and a lot more could be built. 
The irony of all this is that Part 6A of the Electricity Act has a specific exemption for Genesis. We always called it the Genesis clause. It is section 62G(1)(e) and it covers exactly the situation that Paul Hutchison was talking about a minute ago where we want to build a more efficient plant to replace a less efficient plant. I argued strongly that that clause should be taken out because we have already built two gas-fired power stations in New Zealand on the grounds that they would back out Huntly power station. They were more efficient than Huntly and Huntly was to be closed in favour first of all of the Stratford gas-fired power station in the 1990s and then secondly for e3p on the Huntly site. Both of them got permission and support on the grounds really that they were more efficient than Huntly but Huntly still runs full bore on coal. So are we to justify a third big gas-fired plant on the basis that it will back out Huntly then a fourth and then a fifth and will Huntly still be running in 50 years’ time? It is ridiculous! 
It is time to replace Huntly with renewable generation. We have the geothermal capacity to do that we have the wind capacity to do that we have the capacity for more direct solar and coming on stream in I would guess around 10 years is marine energy—tidal and wave—which will contribute in the future. We simply do not need to fill up the atmosphere with carbon dioxide in order to keep warm even if we are stupid enough to want to keep our heated towel rails running 24/7 with no towels on them which is what some people use electricity for today. 
A party vote was called for on the question  
That the Electricity (Renewable Preference) Repeal Bill be now read a second time. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Bill read a second time. 
In Committee 
Part 1 Part 6A repealed 
Hon DAVID PARKER (Labour) 
: 
 I would like to begin by responding to what the Hon Maurice Williamson said which was that the answer to New Zealand’s electricity demand problems was to dam more rivers. He gave the impression that damming rivers was an easy thing to do without significant environmental effects— 
Hon Maurice Williamson 
: I didn’t say that at all so don’t tell lies. 
Hon DAVID PARKER 
: I raise a point of order Mr Chairman. The member accused me of telling lies. The  
Hansard 
 record will show that he stood and told the House that we should build more hydro generation. He should be asked to withdraw that comment. 
Hon Maurice Williamson 
: No; he just said “dam all rivers” and I didn’t say that. 
The CHAIRPERSON (Eric Roy) 
: Basically that is a debatable point. The member who interjected really cannot accuse another member of lying so on that account he should not use that terminology. It is a debating point I guess. 
Hon DAVID PARKER 
: Thank you. Well it is not a debatable point as to whether I am a liar. 
The CHAIRPERSON (Eric Roy) 
: The point that the member was making was a debatable point. 
Hon DAVID PARKER 
: Thank you Mr Chairman now that we have clarified that point. The member has said that he would dam more rivers in New Zealand and that he thought the Greens were wrong to oppose the damming of rivers because that was undermining security of supply. 
Hon Maurice Williamson 
: I didn’t say “dam all rivers”. 
Hon DAVID PARKER 
: I did not say that the member said “dam all rivers”; I said that he would dam more rivers. 
Hon Maurice Williamson 
: You just did say that. 
Hon DAVID PARKER 
: Sorry; if I said that I meant to say “dam more rivers”. Can I list for the member the number of rivers down my way where we already supply far more power than we use to keep the member’s lights on in Pakuranga. 
 In my area the Taieri River is already dammed—one of our major rivers. So are the lower reaches of the Kawarau and so is the Clutha in more than one point. The list goes on. So too the Waitaki River is dammed so is the Tekapo so is the Ohau River so is the Pukaki River so is the Waipori River so is the Teviot River so is Lake Manapouri the Wairau River and the river system around Manapouri and various other systems in Southland which I must admit I cannot name offhand. In addition consents in recent years have been issued for the damming of the Arnold River for the damming of the Waiau River and for another dam on the lower Waitaki River. When do we stop? 
Chris Hipkins 
: Do we have any left? 
Hon DAVID PARKER 
: Well we do not have many left down my way. 
Hon Dr Nick Smith 
: Is Labour’s position to oppose any more hydro? 
Hon DAVID PARKER 
: It is Labour’s position that we do not need much more hydro that we— 
Hon Dr Nick Smith 
: “Much more”—oh you’re going to dam more rivers. He’s going to dam more rivers. 
Hon DAVID PARKER 
: No; actually people will not see Labour proposing changes to the Resource Management Act to enable more rivers to be dammed. It has been interesting that Contact Energy has said that it does not need just aided processes to get consent for more dams on the Clutha River; it needs a change to the environmental baseline that is provided by the Resource Management Act so as to undermine the environmental protection that the remaining undammed sections of the Clutha River currently enjoy. 
If members on the other side of the Chamber think they will be able to provide security of supply through damming more rivers and they think that they will do that down our way then they should think back to the Save Manapouri campaign and the Save the Clutha campaign and they will realise that down our way some things motivate people. One of them is that when generators have dammed so many of those rivers in Otago South Canterbury and Southland and still want to do a lot more of that then they ain’t seen nothing yet when it comes to civil protest and popular protest against what would be wrong. 
We do not need to do that. So I am somewhat disturbed when I hear that Gerry Brownlee who is on record as saying that we should have quite a bit more hydro lots of little—[ 
Interruption 
] Yes the Minister has. I have heard him say it. He has said that now we have done all the big rivers then we should do quite a few more of the small rivers. I put that on record. 
I will move now to the issue as to whether we need to have some change in the legislation so that we can retire old thermal plant. The existing Electricity Act already specifically provides at section 62G(1)(e) that an exemption can be given where new generation plant “will be connected and operated in circumstances where an existing thermal electricity generation plant will be retired in whole or part” as long as there will be a 20 percent reduction in emissions. 
 So the existing legislation allows for new more efficient thermal plant to be built to retire old coal-fired plant like Huntly but if the Government repeals the legislation then that will not happen. Instead it will get a new gas-fired station at Rodney and it will get Huntly as well so it will get increased instead of decreased greenhouse gas emissions. The existing legislation is necessary. A price on carbon alone will not guarantee where we need to go in respect of renewable generation. 
In terms of what is consented and whether this is threatening security of supply I make two points. Firstly security of supply is a class of exemption. Anybody who has security of supply concerns can get an exemption to the restrictions on baseload thermal generation from the Electricity Commission making a recommendation to the relevant Minister that would then be adopted. But that is unlikely to be necessary because we have so many renewable projects that are already consented. I have heard National members say they are not economic. I ask why these current-technology renewable projects are already being built by in respect of geothermal generation Contact Energy Mighty River Power and up north by Top Energy. Additional wind farms are also being planned for construction by a wide range of generators including Contact Energy Mighty River Power and Meridian Energy which has the Makara project currently under construction with the potential for close to 200 megawatts at that facility. There was an announcement recently of a Mighty River Power project over to the south-west of Wellington and some very large wind farms are being proposed for Otago some of which are consented and some of which are in consent. 
There is ample new generation. In fact there are already more than 655 megawatts of consented projects. To put that figure in perspective 150 megawatts of extra capacity is needed each year to meet increasing demand. In addition to those consented projects there are already an additional 2875 megawatts of other renewable projects in consent processes as of 1 July 2008 and indeed some of those projects have already moved on to be consented. 
One of the things we should remember about National power policy is that it was National that visited upon the country the so-called Bradford reforms which were introduced under the control of Max Bradford but voted for by the previous National Government. It is interesting to reflect on how much easier it would be to go to renewable generation if we still had the old Electricity Department structure. Under that structure all that would have happened would be a meeting between the Minister and Electricity Department where the Minister would say “Hey look is it possible to build renewables instead of thermal please?” and the department would say “Oh yeah that’s economic and that’s possible.” and then the Government would say “Could you please do that and not build any thermal.” and that would have happened. I ask members to look at what we have now got ourselves into because of the ridiculous so-called reforms of the Bradford years and the plan now for Genesis to build more facilities using gas. 
I ask one other question of the Minister in the chair Gerry Brownlee. Last week we had Genesis put prices up and this week we had the Governor of the Reserve Bank say that given inflation pressures in the economy and the fact that we have a recession around the world and decreasing rates of return in virtually every other sector of the economy it is about time the electricity sector decreased its expectation of ever-increasing profits no matter what the economic cycle. He said that electricity companies should not charge so much. Well the Minister is part of the Government that owns on behalf of the taxpayer the major State-owned enterprises like Genesis Energy Mighty River Power and Meridian which produce about two-thirds of New Zealand’s power. I ask why the Government does not simply say its expectations of rate of return from these companies has dropped by 2 percent. If the Minister said that to those generation companies it would immediately cause them to not increase their power prices. 
Hon Gerry Brownlee 
: Where were you for 9 years? There was a 63 percent increase in prices. 
Hon DAVID PARKER 
: Well in the last 3 or 4 months the world’s economy has gone down. In fact I have heard the Government’s own Minister of Finance acknowledge that reality. Maybe the Minister in the chair has not caught up on it. The solution lies in the Government’s own hands. It should not blame it on anyone else. It should get off its hands and tell those State-owned enterprises that they ought not to be putting up their prices because in hard times the Government expects its companies to bear some of that pain to not put prices up and to not expect the same high rates of return during this part of the economic cycle that they expect in every other part of the economic cycle. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 A long time ago we were at the beginning of the second reading debate on the Electricity (Renewable Preference) Repeal Bill and I remember the good Minister of Energy and Resources the Hon Gerry Brownlee talking about the elephant in the room. I wonder whether the Minister can remember that comment. We thought it was a self-referral but the good Minister was able to put us right. He told a story in which it became apparent that the elephant in the room was the Huntly power station that great gargoyle that burns so many tonnes of coal and emits vast quantities of carbon dioxide into the atmosphere. He said that if there was a moratorium on some new plants that would replace this great gargoyle this great monster that needs to be replaced would not be replaced that therefore we need to get rid of the existing legislation and that that is why the Government has introduced this bill. That was roughly his contribution in the second reading. We know that it was nonsense. 
Hon Gerry Brownlee 
: It is very rough. 
Hon PETE HODGSON 
: Well I did it in 1 minute. The Minister spent 10 minutes but that was the essence of it. 
There are two reasons why it was nonsense. The first reason has already been outlined by Jeanette Fitzsimons and David Parker and it is that the legislation the Minister is ripping out of the statute book says if members care to read it that where there will be a significant improvement in energy efficiency then of course that plant can go ahead. You see a straw man was set up and it has been knocked over by black-letter New Zealand law. The Minister needs to forgo that argument in all parts of the Committee stage and so does Dr Paul Hutchison and anybody else who runs up that particular flag—that under the moratorium it is not possible to build a more efficient fossil fuel station and back off a less efficient one. It is possible. It is a matter as I say of black-letter law. 
The second reason is even more interesting. The Minister’s mind is in this frame: “Is it going to be gas or is it going to be coal?”. It could be in another frame altogether such as “Is it going to be renewable generation or is it going to be coal?”. I invite the Minister to make the paradigm shift from gas as a source of baseload generation to renewable generation. Of course he may be thinking “Ha ha! It doesn’t always rain.” and “Ha ha! It doesn’t always blow.” But we have an integrated electricity system and the Minister knows as well as I do that the spread of the catchments of our hydro facilities and the spread of wind generation—especially in the foreseeable future—is such that there is very good integration across the land. Of course there can be dry years. We have had a few. I hope we do not have any more any time soon and I am delighted that the lakes are at a state of considerable replenishment right now. 
Hon Steve Chadwick 
: Yes happy Christmas Minister. 
Hon PETE HODGSON 
: Happy Christmas to the Minister. That is where the reserve generation capacity comes from and that is the future of the Huntly plant. I ask the Minister to take out one of its driveshafts to take out 250 megawatts—or indeed to invite the Electricity Commission to consider doing so because he does not have the ability to do it; it would have to be done by the commission. Let us see whether that is a future possibility. When National fetches up paper tigers and straw men and runs red herrings up flagpoles we can pick them out pretty quickly. Fortunately there is an erudite Opposition here to point out the error of the Government’s ways. 
You see there is no particular need to scrap the existing legislation. Ideology is what is at play here. Government members claim that it is bad legislation because it was introduced by an awful horrible bygone Labour Minister in an awful horrible bygone Labour Government and that is why it has to be thrown out. It is actually quite elegant legislation. It gives a market signal in law it puts exceptions in place where exceptions may be needed it is time-limited it is designed to ensure that the base of New Zealand energy will be renewable energy and it is designed to have New Zealand heading towards 90 percent renewable energy by 2025. And 90 percent by 2025 means no more fossil fuel power stations thank you very much between now and then; otherwise those who build them will have to wreck them in order to meet the target. 
The moratorium is simply a way of signalling in law that the Government’s intention is serious. If the moratorium is going to be ripped down it seems to me that ipso facto the Government’s target which is the same—90 percent renewable energy by 2025—is one that it does not intend to keep. I put it to members opposite that I do not think that it is remotely possible for us to achieve the Government’s own target of 90 percent renewable energy by 2025 by allowing more fossil fuel generation. I do not think it is arithmetically possible. Therefore the Government should be saying: “We have told porkies and we need to change our target.” or it should get rid of the legislation before us now. It needs to do one or the other. It should change its target and say it has been telling porkies or it should get rid of the legislation before the Committee right now. 
I think those are the two options. I think they are the only honest options and the fact that the Government is not prepared to take either of them means that it is designing a future that is based on sophistry. We will catch this Government out within 3 years and we will replace it at the end of that time. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 There has been a consistent theme running through the legislation that has been rammed through Parliament in the last week without any public scrutiny and that theme is a lack of logic. Apart from the absolute outrage of rushing through legislation that does not need to be rushed through uncontested under the cover of Christmas there is a lack of logic. It runs through every bill that has been passed in the House in the last week and it does not make sense. It is as if the National-led Government is living in a parallel universe. 
National policy says it believes that New Zealand is a responsible international citizen and as a country that values our clean green environment must act to reduce our greenhouse emissions. That is National policy. This week the mantra of John Key and the National Government has been “balance”—balance of environmental issues against economic interests. It sounds more like code to me than balance. But according to National we must have thermal generation to ensure security of supply and to keep prices down even though there is enough thermal generation already—and everybody on this side of the Chamber has talked a lot about this tonight—to ensure security of supply. 
We already have these new generation projects coming on stream over the next 4 years and we need about 150 to 200 megawatts built each year to keep up with demand—and we have heard David Parker list them tonight. Our security of supply margins have been improving all the time. So given that this Government claims in its policy that it wants to reduce greenhouse gas emissions— 
Hon David Parker 
: I raise a point of order Mr Chairperson. We have a Minister in the chair who never takes a call who would not defend his biofuel legislation and who is not taking a call here yet he abuses his position in the chair in respect of his access to the microphone. He abuses the convention of Parliament that the Minister in the chair will not make interjections whilst in the chair and will instead exercise his right—indeed his duty—to take calls periodically. I request Mr Chairperson that you call the member to order. 
The CHAIRPERSON (Eric Roy) 
: I will uphold the point of order. It is in breach of Speaker’s ruling 59/4. It is the convention that the Minister in the chair will not interject when the microphone is on. 
Hon Dr Nick Smith 
: I seek leave to table for the good benefit of the member on her feet the press release by Mr Pete Hodgson announcing Labour’s construction of the Whirinaki diesel-fired power station noting that— 
The CHAIRPERSON (Eric Roy) 
: Leave is sought for that purpose. Is anyone opposed to that course of action? There is no objection. Under the Standing Orders the member will have to table that document today. 
Document by leave laid on the Table of the House. 
CLARE CURRAN 
: Why is National ramming through reckless backward-looking legislation that does not take into account the reality of secure supply and is a kick in the teeth to New Zealand’s reputation as a nation that takes climate change seriously—a nation that is willing to do the right thing? 
As Stuart Nash said in his maiden statement tonight Labour always asks: “Is it right?”. Well unfortunately I do not think that this Government is concerned about what is right. It is more concerned about having a blind commitment to some other agenda. Hmm I say to myself! Anyone would think that another agenda is going on here but I am a bit of an optimist and I always like to think the best of people—I do. I would like to believe that a brilliant new strategy is being developed that is so brilliant it requires a review of the emissions trading legislation a reconsideration of all the principles of climate change and disinvestment in the biofuels industry. 
I would like to believe that this really brilliant new strategy will somehow magically reduce our emissions but despite my optimism I have a horrible feeling. We all know that in this time of economic crisis across the world confidence is the key to dealing with the problem—confidence in the financial system confidence in the institutions and confidence in the Government because it knows what it is doing and has a plan. 
Hon Dr Nick Smith 
: Absolutely. 
CLARE CURRAN 
: I tell the member that this bill destroys confidence as have all the bills that have gone through the House in the last week. The repeal of the legislation requiring oil companies to mix petrol and diesel with biofuel undermines confidence in new industry the 90-day bill undermines confidence amongst workers the education bill undermines confidence amongst teachers and children and now this bill undermines confidence in New Zealand’s commitment to addressing climate change. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I am sure my colleague Clare Curran will be able to take another call and carry on with her excellent speech. 
I refer us back to Part 1 of the Electricity (Renewable Preference) Repeal Bill. Part 1 repeals Part 6A of the Electricity Act 1992. I think it is worthwhile to take just a moment to reflect on the purpose of the part that we are repealing. The purpose of Part 6A is in part to implement a 10-year restriction on new baseload fossil-fuelled thermal electricity generation capacity except where an exemption is appropriate—for example to ensure security of supply. I find it difficult to understand why the National Government would want to repeal something like that. 
This restriction is part of a wider plan in respect of our sustainability that the Labour-led Government had been working on. Yesterday in the House we heard uncertainty as to whether the emissions trading scheme has been suspended or whether it is continuing in some other form. We also know that as part of our emissions trading scheme Labour and the Greens had agreed on an insulation package we had the biofuels obligation and we had brought through this renewable preference focus. That was Labour’s plan to help address our issues of sustainability—a long-term plan to start dealing with a long-term issue like climate change. In Part 1 of this bill we see “short-termism” whereby National says that it made a promise on this issue and it is going to go through with it. It is short-term logic and it does not follow through on the importance of the issue of climate change. National does not seem to have a plan. 
Earlier today we heard the Minister in the chair the Hon Gerry Brownlee say we just had to wait—that is what he told us. Well climate change is a pretty pressing issue. We need a plan and we need to know what is going on in terms of the National Government’s overall sustainability plan. How will it address those climate change issues? It is not acceptable for National to bring a bill to this House and say that it is getting rid of the renewable preference but that it does not know what else is happening. It does not know what the rest of the plan is. It is not even sure where we are going on the whole issue of sustainability. 
This is a reckless bill. It looks backwards. It takes us backwards. It is a nail in the coffin for New Zealand internationally. I have stood on the world stage and talked about New Zealand’s environmental record and I have been proud to do that. I was proud to do that under a National Government when I was working at the United Nations in New York because Simon Upton a former Minister for the Environment stood up for New Zealand. He stood up and said that New Zealand had a record that we could be proud of. He meant what he said when he talked about sustainability. 
The Labour Government came in and tried to carry that on. In Part 1 we see the repeal of one part—one aspect—of that attempt. It repeals a part of legislation that says that we will put a restriction on baseload fossil-fuelled thermal electricity generation. There are exemptions. There will be times when we will allow that to happen. But we want to send a signal out to the world to New Zealand and to the environment that we can work with renewable generation. Somehow or other National seems to be telling us that security of supply is incompatible with renewable generation. That seems to be what it is saying. But we have heard time and time again in this debate that that is not true. 
Hon David Parker 
: New Zealand used to be 90 percent renewable. 
GRANT ROBERTSON 
: That is right. New Zealand used to use 90 percent renewable energy. We are working away with 1400 megawatts of new generation projects coming on stream over the next 4 years. David Parker has outlined those projects; they are meeting the demand that we need to meet. 
Why does National want to repeal Part 6A? This repeal bill sends a signal to the rest of the world that we do not take seriously our sustainability challenge. The fundamental thing that New Zealand needs to do is show the world that we are taking the sustainability challenge seriously. It is not just about the environment or the future that we want to leave for the next generations; it is about our economy because it is about how we are seen in the world. We have already seen this with the statements Gordon Brown has made and his policy—which we are looking at—that could restrict people travelling to New Zealand if cost is a factor for them. Now we will see it again and again. 
The National Government has to wake up and realise that our reputation internationally is important not just for foreign affairs officials but also for our economy and for getting our goods sold overseas. The image we are sending with this bill is that we do not want to go towards a renewable future. Everyone else in the world might be going towards a renewable future but we do not want to! We want to go backwards to more coal and more gas rather than to look ahead to our natural advantages. Part 1 repeals one of the most significant things that we could do. It is a key part of the picture yet National has decided it wants to go backwards. 
Hon Dr Nick Smith 
: You’ve gone backwards for 9 years. 
GRANT ROBERTSON 
: We have not gone backwards for 9 years. 
Hon STEVE CHADWICK (Labour) 
: 
 I rise to take a call to build on the previous speaker’s comments about New Zealand’s international reputation. I have just returned from a climate change conference in Viet Nam that I attended with Dr Paul Hutchison and Sue Kedgley where we hung our heads down in shame. This conference was about climate change and the effect on population and population demographics. We used to be looked at in this forum as leaders in the world. 
Hon Dr Nick Smith 
: Absolute rubbish! 
Hon STEVE CHADWICK 
: And I will build on another conference I went to in Chile where I was asked with Ministers of Conservation—I say to Dr Nick Smith—to also give a paper on conservation and climate change. People at these conferences were looking to New Zealand to be a leader and to take keys and intuition from the way that New Zealand was going. 
I think that the trifecta the Government has plonked in the House under urgency brings shame on this Government. What did we see? We saw the gutting of the emissions trading scheme and that Dr Paul Hutchison now has to chair a select committee—with no gender perspective on the terms of reference I note. Women are hugely affected by the effects of climate change and we will make sure that we fix that. The emissions trading scheme special select committee is going to waggle on for some time giving no clues to the market about the investment signals that the previous Minister of Energy had been very clear on with our energy strategy stating that we would have 20 percent renewable generation by 2025. 
Hon David Parker 
: 90 percent. 
Hon STEVE CHADWICK 
: It is 90 percent. What a line in the sand that was. 
Hon Dr Nick Smith 
: 20 percent! That’s about right. That’s where it was heading. 
Hon STEVE CHADWICK 
: I will correct that I say to Dr Smith. It was 90 percent renewable generation by 2025. What a wonderful signal that was by the previous Minister of Energy. We also had the biofuels target. Shame on the Government now for the damage it has done to the biofuels obligation and to investor signals in what was a lofty goal for New Zealand. 
Now tonight there is the trifecta: this ridiculous Electricity (Renewable Preference) Repeal Bill. I am ashamed that after all the work we did led by the then Prime Minister Helen Clark we are now looking at a cumulative effect that is not going to let New Zealand hold up its head in international fora and say we are leaders on climate change. 
So what do we have? We now have a Prime Minister who has also made himself—and I thought it was very clever at the time—the Minister of Tourism. As well as looking at footballs for the World Cup he will also go around the world as Minister of Tourism touting the brand of clean green New Zealand. I think our Prime Minister needs to look very closely at this trifecta which signals a slipping and sliding back to the times before Labour came into Government in 1999. It is a sad day for us. 
I think the other thing about all of these signals is that these are deemed to be “urgent” measures—lifting a 10-year moratorium on baseload thermal energy. It is absolute rubbish that we have to be doing this in urgency and that it will not go to a select committee to allow the Major Energy Users Group the small energy-developers and the consumers to come before that select committee to give their view. I am ashamed of the process that this legislation is going through now; it is absolutely shaming. The country is noticing it and soon it will wake up to realise that this was the genesis—as Jeanette Fitzsimons said—for allowing the production at e3p and Kaipara. Of course this was what this was all about—opening up the way to gas— 
Hon Dr Nick Smith 
: e3p at Kaipara? 
Hon STEVE CHADWICK 
: —no at Huntly—and opening up other thermal baseload generation. The spokesperson when he was in Opposition kept asking David Parker why he was so risk-averse about lifting the 10-year ban. I also want to mention the first role of the Minister of Energy which was to come into what was my old electorate which I love dearly to open the Kawerau power station. And how did that happen for Mighty River? 
NATHAN GUY (Senior Whip—National) 
: 
 I move  
That the question be now put 
. 
JACINDA ARDERN (Labour) 
: 
 I am grateful for the opportunity to speak on the Electricity (Renewable Preference) Repeal Bill. Another hour passes and another Act is repealed by the National Government another round of select committee hearings is bypassed and another regulatory impact statement fails to be produced to this House. 
I find that part quite amazing I have to say given the rhetoric from that side of the Chamber about the importance of regulatory impact statements. 
Hon Member 
: They have a Minister. 
JACINDA ARDERN 
: Absolutely! Those members think the issue is so important that they have a Minister for Regulatory Reform yet the House has not seen one adequate regulatory impact statement. 
We are speaking on Part 1 which repeals Part 6A of the Electricity Act 1992. Given the brevity of the bill before us for the edification of members I would like to read from section 62A which gives the purpose of Part 6A: “The purpose of this Part is to reduce the impact of fossil-fuelled thermal electricity generation on climate change by creating a preference for renewable electricity generation through the implementation of a 10-year restriction”—I highlight that part for the edification of members—“on new baseload fossil-fuelled thermal electricity generation capacity except when an exemption is appropriate (for example to ensure security of supply).” That last part is particularly interesting and I would like to dwell on it if I may. 
Moana Mackey 
: You may. 
Hon Steve Chadwick 
: Yes. 
JACINDA ARDERN 
: I will; thank you colleagues. We have heard that one of the reasons for the existence of this bill is to give that all-important security of supply. No one is doubting the importance of security of supply. That is why Labour legislated for it; that is why we pointed out its importance in the purpose section of Part 6A of the Act. Now we see it being used as an excuse for Part 6A in its entirety to be repealed. I see that the Minister in the chair Gerry Brownlee has a picture book in front of him at the moment so perhaps he is not concentrating fully on the happenings of the Committee. I have a question for him: what is the point? If this bill is all about security of supply and Labour has already set out provisions for that what is the point? In fact the Minister has heard speakers on this side of the Chamber point out that plenty of new generation is coming on stream over the next 4 years. In fact we need much less generation than we have coming on stream. We are prepared so what is the point? 
All I see on that side of the Chamber is a complete lack of aspiration. I know that National members would like to patent that word. It is their favourite. It is the word of the hour: “We are going to turbocharge aspiration.” In fact as far as I can see turbocharging aspiration is code for ramming legislation through the House. Their turbocharged aspiration has brought us the repeal of Labour’s biofuels legislation and now the repeal of Part 6A of the Act. What does this tell us? If we might actually have to build a new industry we might actually have to bring forward entrepreneurial Kiwis to create jobs and we might actually have to be a bit creative in the work we do the National Government believes that it is too hard and we should get rid of it. That is what aspiration means to the National Government and that is all that we have seen. 
There is a lack of aspiration for our environment and that is the critical part for me. I am standing here proudly as a child of the 1980s but with some shame at what members from the 1970s 1960s 1950s and beyond have brought forward for us. What does this bill say to the next generation of Kiwis? 
Hon Dr Nick Smith 
: Oh! 
JACINDA ARDERN 
: Where is the can-do attitude I ask Dr Smith. Where is the can-do attitude? I can tell members that the Labour Government had aspiration for this country. We saw what was possible we combined it with our absolute dedication and commitment to improving the environment of New Zealand and we put forward legislation which the National Government is now busily repealing. I would also add—to look forward a little—that I know that the National Government is also very keen to get to work on the Resource Management Act. 
PAUL QUINN (National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Motion agreed to. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Part 1 agreed to. 
Part 2 Consequential amendments to principal Act 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 I will talk to Part 2 which is a relatively small part with some consequential amendments to other parts of the principal Act beyond the repealing of Part 3. I want to address my remarks on this part to rebut some of the logic—actually logic is far too strong a word—some of the commentary that the Hon Dr Nick Smith has made throughout the debate in the first reading and in the second reading. Actually he was active during the biofuels bill too but I should not talk about that at length when we are dealing with the Committee stage of this. He was active also last week when we were setting up a select committee to look into climate change. But I really should not talk about that at great length because we must contain ourselves to the purposes of the Committee stage. But the consistent theme has been in the words of the Hon Dr Nick Smith— 
Hon Dr Nick Smith 
: I raise a point of order Mr Chairperson. We are debating Part 2 of the Electricity (Renewable Preference) Repeal Bill. This part deals with only the consequential amendments such as the powers of the Electricity Commission to investigate issues in respect of the electricity renewable preference provisions that are being repealed. I think you should require the member to speak on that part. 
The CHAIRPERSON (Eric Roy) 
: That is right; you have made a fair point. Thank you. I think the member on his feet knows that. I just say that when it comes to closures repetition and relevance are a matter that the Chair considers. 
Hon PETE HODGSON 
: I thank the Hon Dr Nick Smith for repeating the very words I had used. This is like being in an echo chamber not in the Chamber of the House of Representatives. The point I was about to make and now will make which is relevant to this part because this part makes some consequential amendments and therefore makes the abolition of the energy renewable preference bill complete—without it it would not be complete—is that the Hon Dr Nick Smith has throughout this debate said for a day and a half now that Labour’s record on climate change was shocking and that Labour’s record on building fossil-fuelled plants has been shocking. He has been listing figures and listing power stations. He has been not taking his tablets and all the while he has been voting against any improvement. 
Hon Dr Nick Smith 
: I raise a point of order Mr Chairperson. You can always tell when Labour members are in trouble with the debate; they get personal and nasty. I do not think that those sorts of statements do anything for the Committee and I take offence. 
The CHAIRPERSON (Eric Roy) 
: Let me just say that we are going to have to change our habits in terms of points of order. I will make a general point first then I will respond. Members raising points of order should adhere to what the Standing Orders and Speakers’ rulings say—that they should be terse. The presiding officers will not tolerate barbs innuendos or imputations in points of order. We will deal with points of order in a fair and just way in the House in general. The member has just offended in that way—not in a particularly bad way but it is symptomatic of what is going on. I want to make that point very clear. We are going to change our habits as a House about that. That is the first thing. The second thing is that the member did breach what is accepted. 
Hon PETE HODGSON 
: Very good Mr Chairman. Dr Nick Smith has all this while said that the progress this country has made— 
Hon Dr Nick Smith 
: I raise a point of order Mr Chairperson. I think the statement that was made by Mr Hodgson was offensive and I take offence. I think the member should be required to withdraw and apologise Mr Chairman. 
The CHAIRPERSON (Eric Roy) 
: I ask the member to withdraw and apologise. 
Hon PETE HODGSON 
: I withdraw and apologise. Right through the debate the Hon Dr Nick Smith has railed against this country’s poor record but voted to make it worse. I want him to get to his feet to explain what is logical about a member apparently caring a great deal about our progress on climate change and apparently caring a great deal about emissions that occur in our electricity sector but then voting to make them worse—voting to get rid of biofuels and in the case of this legislation and this part which completes the abolition of the moratorium voting to allow the building of baseload fossil-fuelled generation. He speaks in one direction and votes in another. I want the honourable gentleman to take the call and explain himself because he has not got any logic to his logic. The gentleman says one thing and votes in the other direction. I am getting sick of it. I reckon— 
Hon Dr Nick Smith 
: I raise a point of order Mr Chairperson. We are meant to be debating Part 2. It is a very narrow part and it changes very narrowly the investigative powers of the Electricity Commission. The Standing Order around the Committee stage debate is that the member needs to narrowly reflect on those issues in Part 2. I ask that he be required to comply with the Standing Orders. 
The CHAIRPERSON (Eric Roy) 
: I uphold that point of order. 
Hon PETE HODGSON 
: Very good Mr Chairperson. I was simply making the point that Part 2 completes the abolition of the moratorium. Therefore by completing the abolition of the moratorium Part 2 allows the moratorium to be lifted; therefore it being lifted allows for the development of further fossil-fuelled electricity generation and therefore is not consistent with anyone who argues against that. 
The most vociferous arguments against those things have come from the Hon Dr Nick Smith who none the less votes in the other direction. I do not understand it and there are a bunch of words I cannot use to describe it so I shall not. But I do think that in the course of this part of the Committee stage of the bill the Hon Dr Nick Smith Minister for the Environment should get on his pins and describe what it is about his contribution that is remotely logical. So far it appears to me to be bereft of logic. The good gentleman has got himself a PhD from somewhere and therefore has to have a couple of brains to rub together and I would like to see that exposed. I would like to see the gentleman get to his feet and see whether he can make something resembling a coherent argument in favour of fewer emissions but somehow against a moratorium that would stop them. Thank you Mr Chairperson. 
Hon DAVID PARKER (Labour) 
: 
 Part 2 amends the principal legislation by removing the inquiry powers of the Electricity Commission. I will discuss those inquiry powers and describe to the Committee how those powers currently work under the existing legislation and why it is important that they not be repealed. One reason I want to explore this is that when the existing legislation was passed one of the principal objections raised in the debate by National Party members was that essentially the decision as to whether an exemption should be given from the restrictions was a ministerial discretion which effectively enabled the future shape of the electricity market to be determined by ministerial fiat. That was never the case and it is interesting that in this debate National members are no longer using that justification; they have moved to different grounds. I make that point because it shows that the underlying purpose now is political not principled. 
The existing legislation states that the Minister of Energy can grant exemptions in a number of categories and that it is for the Electricity Commission to do an inquiry on an application by someone who wants to come within the ambit of one of those exemptions in order to see whether the exemption should be granted. The commission then makes a recommendation to the Minister of Energy and the Minister has the authority to do only one of two things: the Minister can either accept the recommendation or reject the recommendation. The Minister of Energy cannot replace the recommendation of the commission with some different decision. The Minister cannot replace the recommendation with his or her own decision but can accept or reject the recommendation. 
The exceptions that are allowed for under the legislation which the Electricity Commission has the duty to consider are set out in section 62G in Part 6A of the Electricity Act. The first is that the Minister of Energy can grant an exemption—again on the recommendation of the Electricity Commission—if the specified generation plant will be non-baseload plant that will have an average load factor less than a prescribed limit will emit greenhouse gases less than a prescribed limit or will have a start-up time of less than a prescribed limit. 
The second exemption is where there is a combination of renewable or other non - fossil-fuelled plant together with fossil fuels. That cogeneration process can be a sensible way to generate electricity. 
The third exemption is one that I have mentioned in previous contributions in response to the National Government’s assertion that the country could not build new more efficient thermal plant to retire less efficient coal plant for example. That category exemption is found in section 62G(1)(e). It states that the specified generation plant that could be allowed will be connected and operated in circumstances where an existing thermal electricity generation plant will be retired in whole or in part and that the specified generation plant together with any part of the existing thermal electricity generation plant that is not retired will be operated in a manner that will reduce greenhouse gas emissions by at least 20 percent based on emissions of the existing thermal electricity generation plant and the projected emissions assessed in the prescribed manner. It also requires the Electricity Commission not to reduce the security of supply. 
So what would happen in practice under the legislation as it stands will not be able to happen if Part 2 of this bill passes in its current form—that is the Electricity Commission will lose its ability to make that inquiry. If as National members say they are concerned about being able to replace inefficient thermal plant with efficient thermal plant then the Electricity Commission is the body that would listen to those applications and it would have the expertise to assess the security requirements of the system. For example we do not want to lose the whole of the Huntly power station to some interruptible gas-peaking plant because that would not be good for the security of supply but we might be willing to have that replaced by a more fuel-efficient gas plant that has lower emissions than a gas-fired plant. It would be for the Electricity Commission— 
NATHAN GUY (Senior Whip—National) 
: 
 I move  
That the question be now put 
. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I just want to build on the comments of my colleague David Parker about the powers of the Electricity Commission which are covered under Part 2 of the bill because as was kindly pointed out to us by members opposite we are debating the investigation powers of the commission which are being removed as a consequence of what we have already done with Part 1. Really we have to ask what the commission would be investigating. We have already heard from David Parker that some of that is around the question of exemptions; and in listening to the debate it seems to me that a number of members opposite do not seem to realise that there was an exemption part of the Act. It does not even seem as though they want to know that. The very reason it was there was to allow as we know the Electricity Commission to investigate situations where there was a more efficient thermal option that could be brought on board. That was an important part of the Act because although we wanted to ensure that renewable generation was preferenced and we wanted to make sure that New Zealand goes forward into the future with renewable energy we also wanted to make sure that we continued to develop efficient options where they are. So that is what the commission would have been investigating but it will not be able to do that now as we go to repeal that legislation. 
What else would the commission be investigating? It would potentially be investigating other areas where people perhaps were going to breach the moratorium. We do not know that there was a lot of that going on because what we do know is that there was a large amount of renewable generation coming on stream—1400 megawatts. So it would have been unlikely that the Electricity Commission would have been investigating this kind of breach of the moratorium but it is possible. Once again we will not be going down that path because we are here trying to repeal that under Part 2. 
Another part of what the Electricity Commission would have been looking into around the grounds terms and conditions of exemption was under section 62H of the Act. The Minister of Energy would have had to specify in the exemption the ground or the purpose under which the exemption was going to be granted. It then went on to state what conditions would be imposed upon that and if the person was granted an exemption he or she then had to specify the kind of generation plant that would be operated and how it fitted with the rest of the Act. So that is the kind of work that the Electricity Commission would have been investigating. It was an important thing. But a really critical part that we have not discussed yet is section 62I which is actually the public consultation process. 
Moana Mackey 
: National doesn’t believe in that. 
GRANT ROBERTSON 
: I know that National would find that a difficult subject to discuss because we have seen throughout this week that public consultation is not something it is interested in but that was the role that the Electricity Commission was going to do—to make sure the voice of the public would be heard if there was a case for an exemption or indeed if there was a case for someone being prosecuted. 
Section 62I of the Electricity Act states: “Before making a recommendation to the Minister of Energy to grant an exemption the Commission must—(a) publish its intention to do so … and (b) give a reasonable opportunity to those persons to give those views; and (c) have regard to those views.” So that is what the commission was going to be doing. It was going to be operating a public forum in which people could put forward their views. That is a very very good thing and it is not something we have had an opportunity to do under this bill. 
This bill makes a significant change to the way we look at our sustainability challenge going forward and there is no opportunity for public consultation. Obviously the Electricity Commission had that role and that is now gone. The select committee would have been a great venue at which to have a debate about the mixture of New Zealand’s energy generation that we want going forward. But no National has come to this Parliament for the past 2 weeks to show us that it does not really want to listen to the public’s concerns. It does not want a body like the Electricity Commission to have the opportunity to hear public concerns. 
It simply wants to ride roughshod over New Zealand’s global and local interests. It is sort of like a perverse version of the “think global act local” approach that the National Government is taking. On a global level it wants to take us backwards by ensuring that we will not only be made a laughing stock on the world stage but also be told here in New Zealand that we will not look forward and we will not try to protect our environment. What we see in Part 2 is the enabling of the repeal of an important part of the make-up of our sustainability going forward. We want renewable energy because it is good for the environment. That is also good for jobs and employment and we can see that right around the world—in the European Union and in Germany in particular where a lot of jobs have been created in the renewable energy industry. That is not what the National Government wants. It does not want to see any jobs created in this area; it wants to take us backwards to a time that realistically is not where we want to go. 
MICHAEL WOODHOUSE (National) 
: 
 I move  
That the question be now put 
. 
Hon SHANE JONES (Labour) 
: 
 I will take a short call—a skimpy small contribution inversely related to the problems that will follow—on Part 2. I follow on from what Mr Robertson has said. The stripping away of these institutional powers worsens the capacity for ordinary garden-variety Kiwis. Whether they be firms and users of energy investors or communities they will have their rights to engage in participatory democracy stripped away from them. 
Hon Gerry Brownlee 
: This is very good. 
Hon SHANE JONES 
: I say to Mr Brownlee that the bill is inversely related to a certain girth but I will say more on that at another time. It is a very mean-spirited approach to people having a stake an opportunity to participate in and influence the outcome of investments in the energy sector. It might suit some narrow sectional interests that have been driving for a whole host of reasons and for a long time to change the character of energy investment and the range of sources from which we derive energy or the resources we use to create energy. In that sense it is a very blinkered approach. Others have spoken about how it will have ruinous consequences on our international reputation. 
Hon Dr Nick Smith 
: I raise a point of order Mr Chairperson. We are meant to be debating Part 2 of the Electricity (Renewable Preference) Repeal Bill. It is a very narrow part dealing only with the deletion of the words “Commission” from the investigating powers of the Electricity Commission. I have listened carefully to the member. He has been well outside the Standing Orders and you should require him to speak to the part. 
Hon SHANE JONES 
: Speaking to the point of order I say that it is quite simple. This strips away institutional powers and it will have an effect in terms of how the full legislation is implemented. 
The CHAIRPERSON (Eric Roy) 
: No the member is getting into the debate. Several cautions have been given to Committee members to stay on target to stay on message and to keep within the realms of Part 2. I invite the member to continue. 
Hon SHANE JONES 
: For fear of spurring another avian contribution from Dr Smith I say fair enough. Dr Smith may laugh but as I have said before there is a famous Maori proverb: “He pipiwharauroa atu i konei ki kona—when the cuckoo leaves one nest it goes over there still a cuckoo so kaua koe e katakata. [ 
do not laugh 
] 
To go back to Part 2 I say that it is an egregious slur that Dr Smith puts upon the ability of a parliamentarian to contribute to such an important matter. National has brought forth a set of ideas and is hiding them as narrow technical amendments. But in actual fact it is a circuitous attempt to erode our ability to act in a sustainable and very wise fashion and uphold our international integrity in the eyes of our competitors. Also it worsens the prospects of moving towards a broad sustainable approach in relation to energy. This is a very worrisome negative and mean-spirited attempt to strip away a fantastic set of changes that was brought forward by my colleague here. The Government refused to allow them—[ 
Interruption 
] Ah there is noise from the cuckoo’s nest and it is now being joined by chirps and trills from the back of the Chamber. Of course those members fear the accuracy of what we are saying. One cannot reduce people’s rights to participate and one cannot force industry to pay higher costs as a consequence of stripping away the institution’s ability to investigate and to test the worthiness of various energy proposals. For that reason this will be only a short contribution to the statutory landscape until such time power returns to where it belongs. Kia ora tatou katoa. 
TIM MACINDOE (National—Hamilton West) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Motion agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Part 2 agreed to. 
Clauses 1 to 3 
Hon DAVID PARKER (Labour) 
: 
 I rise to take a call in the debate on clauses 1 2 and 3. I focus for a start on the date that this legislation comes into force which is the day after the date on which the bill receives the Royal assent. We can take it from that that the Government intends having passed this legislation in urgency to take it as soon as it can to the Governor-General to get its Royal assent and thereafter it intends this legislation to take effect. 
I ask the Minister what the rush is and why the Government thinks there is a need to repeal the existing legislation—which is the effect of this bill—so soon when it does not yet have the price of carbon in the economy that it says it will rely upon as the alternative in order to discourage thermal-based electricity and instead prefer renewable sources of electricity. We have heard from the National Government that it has adopted the Labour Government target of 90 percent renewable generation by 2025. But in order for there to be a meaningful prospect of that target being achieved we have to build renewable generation in the future rather than more thermal generation and that of course was what the existing legislation did. It placed restrictions on additional thermal generation thereby encouraging New Zealand to go for renewable generation. 
The great thing about renewable generators as we all know is that once we have built them the fuel is free. We do not have to buy more gas and more coal for ever. But when Government members spoke during earlier stages in this debate they said that they would achieve that effect through having a price on carbon. But of course we do not yet have a price on carbon in the electricity sector; we have a price of carbon in the forestry sector only and indeed that has already been undermined by the National Government saying that it will suspend the emissions trading scheme. 
We have a select committee being set up by a motion and taken through this Parliament by the Leader of the House who is also the Minister of Energy and Resources. This new select committee has been created to look at amongst other things whether we should have something other than an emissions trading scheme or whether we should perhaps have a carbon tax. 
Hon Shane Jones 
: Rodney Hide made them do it. 
Hon DAVID PARKER 
: Rodney Hide made them do it; that is right. Amongst other things those members were weak and they thought that they should open up the ambit and extend the inquiry into matters relating to whether climate change is real. In the meantime we do not have a price on carbon. We have uncertainty as to when we will have a price on carbon whether we will have a price on carbon and whether the price of carbon will be anything near the real market price of carbon or will be at a low figure such as the figure proposed by the Business Roundtable which would have little environmental effect and would not act to discourage more fossil-fuelled thermal electricity in any meaningful way. 
I ask the Minister to take a call and explain why it is necessary to have such an early date for this legislation to come into effect and to say whether he has considered having an assent date that is after the date when the select committee reports back on whether we should have an emissions trading scheme or after the date on which we have certainty as to whether we will have a market price on carbon. As the Minister has said in his remarks at an earlier stage he and his Government are relying on that price of carbon to discourage more fossil fuel - based generation and to instead have renewable generation. I just cannot understand unless I have some explanation from the Minister how it can be that we can rely on a price of carbon that does not yet exist. 
This also links back to the date on which the Electricity Commission loses its investigatory powers. Allied to those investigatory powers is the public right of participation in these decisions because under the current law the commission has to publish notice of its intention to do something and to give a reasonable opportunity to let people express their views and then it must have regard to those views. It seems inappropriate that those rights are being taken away. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 Right through this debate there has been one argument that the National Government could have put in favour of the Electricity (Renewable Preference) Repeal Bill but has not. The idea came up in this stage of the debate: the former Minister of Energy the Hon David Parker put his finger on it. One way of describing the argument that the Government should have come up with in support of this legislation but has failed to goes like this: why would one bother to have a moratorium on fossil fuel generation when the emissions trading scheme is coming? Why would one do that when the electricity system is to face a marginal charge for carbon dioxide? What would be the point of having a moratorium in addition to that? 
Right through this debate the National Government has not adduced that argument; it has simply not thought it through. If I were in the Government I would argue in favour of the legislation that is before members by saying that it is belt and braces. Why would one need both? When it comes to the commencement clause we need the belt at one point and braces thereafter—or if you like braces at one point and the belt thereafter. Sooner or later the stationary engine sector will come into the emissions trading scheme; it is scheduled to come in on— 
Hon David Parker 
: 2010. 
Hon PETE HODGSON 
: —1 January 2010. That is 12½ months from now. Maybe the commencement date should be 1 January 2010 or—just to be a little more careful because a high-level select committee is going on and some people in this Chamber think that that means there is a lot of time to do not very much at all—we could have a commencement date of “1 January 2010 or at the inclusion of the stationary engine sector into the emissions trading scheme whichever comes later”. One could do it that way. 
I wonder whether the Minister would like to take a call and pick up the thoroughly good bit of logic put forward by my colleague the Hon David Parker. I wonder whether he would like to take a bit of help from the Opposition—which has finally come up with a good reason why one might want this legislation—and use the belt and braces argument. He could use the commencement clause to ensure that we have one and then the other but never both. I wonder whether the Minister is tempted to rise from the chair and take a call to explain whether he thinks that logic has any fault in it. 
It seems to me that there is no intellectual grunt behind the Government’s position. We are offering it some. I will do so again. One does not need both belt and braces. Let us have the belt for the moment and braces thereafter. Why do we not do that through the commencement clause? Why cannot the commencement clause read: “will come into law on 1 January 2010 or at the arrival of the stationary engine sector into the emissions trading scheme whichever comes later.”? Then if the Government needs a bit of extra time with its high-level select committee nothing is lost—the moratorium remains in place until it is replaced by the marginal cost of electricity generation inclusive of the cost of carbon dioxide. 
There is a certain magic to that idea—certainly we think there is—and we wonder whether the Minister if he can stop yawning long enough would like to get to his feet and tell us what he thinks might be wrong with it. Did he get it or shall I go though it a third time? 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 It is appropriate to be debating the title clause of the Electricity (Renewable Preference) Repeal Bill. It is hard to understand how anybody could not have a preference for renewable energy as opposed to the counterfactual—that is energy that is not renewable and energy that will not be available for our grandchildren. 
I am not a paid-up member of the Green Party but I agree with its members that we face peak oil prices at some point. Even foreshadowing constraint we live in a time when oil prices have reached US$150 a barrel. How long will it be before it is US$200 a barrel or US$400 a barrel? The long-run average trend is up and against that background that will of course drag up the price of other fossil fuels such as coal and other substitutes— 
Hon David Parker 
: Gas. 
Hon DAVID CUNLIFFE 
: Gas. In that kind of world what is really important is that New Zealand as an energy-dependent country is well stocked with alternative energy sources. So it is absolutely vital that we create the incentives now because of the long lead times that are required to bring in this production. 
It is also the case that because of the good work of the Hon David Parker and the outgoing Government there are enough megawatts of capacity and renewable energy in store in the next few years to provide for the growth in baseload and peaking demand. That means that the renewable energy preference policy is working as it was planned and foreseen to do. But it worked only because the Labour Government had the fortitude to send a clear signal to the market and the market cannot internalise that which the participants do not personally bear. The market cannot internalise the benefit to society of having a long-term plan for energy that is sustainable and protects our security. The market can only take to book the benefits that are relevant to each individual company. 
Therefore it follows that clear Government leadership is required and therefore in a fossil fuel - constrained world it follows that that policy was good which brings us to the reason why we are here. Why on earth would we do this? Why on earth would we remove a preference that makes all the sense in the world? Nick Smith is smirking. I wonder why Dr Smith is smirking. He has a PhD and he should be able to work out that this legislation is a giant act of shooting oneself in the fossil fuel foot. 
This policy does not actually have any relevance to the language in the explanatory note of the bill which conveys that the legislation is somehow related to the emissions trading scheme. Let us just stand back and think for a second about why we have an emissions trading scheme. The emissions trading scheme allows our economy to adjust at a least-cost price path for any given level of carbon emission constraint. So at whatever level at which the Government would like to see us pumping soot into the atmosphere—whatever level Rodney Hide thinks would be OK—the cost of adjustment will be lower under tradable emissions. David Carter may laugh. The member represents the agricultural community I believe. 
Hon Steve Chadwick 
: I raise a point of order Mr Chairperson. I noted that the Minister in the chair David Carter was very keen to take a call as he interjected on the previous speaker. We are very happy for him to take a call. We note that he has not yet done so in the Committee stage. 
The CHAIRPERSON (Hon Rick Barker) 
: That is not a point of order; the member knows that. I would remind the Minister that it is accepted practice not to interject from the Minister’s chair because he or she has access to a live microphone. I ask the Minister to restrain himself. 
Hon DAVID CUNLIFFE 
: It is therefore very hard to imagine why the National Party in Government would want to impose change on New Zealand that at any given level of emission reduction would cost our economy more when tomorrow it will announce significant increases to Government debt a forecast track for higher unemployment a forecast track for more difficult— 
Hon Dr Nick Smith 
: That’s your legacy. 
Hon DAVID CUNLIFFE 
: No no. [ 
Interruption 
] I raise a point of order Mr Chairperson. You are doing a great job as the Chair. I do not believe that anything the previous Government has done is “your” legacy. 
The CHAIRPERSON (Hon Rick Barker) 
: I respond to the member by saying that that is not a point of order because the interjector does not have the call. It is the speaker with the call who should not bring the Chair into the debate. The only reason that that interjector is now in the debate is that the member has made mention of him. Had the member ignored the interjection the person would not be in the record. The member has 59 seconds to continue. 
Hon DAVID CUNLIFFE 
: Is it not interesting that that member is still smirking? He is smirking about an international environment that is getting worse by the day. I understand the latest projections are for Chinese growth in the coming year to fall as low as 2 percent. And David Carter smirks. That member purports to represent agricultural producers whose livelihoods will be negatively affected. 
I ask Mr Carter whether this is just the arrogance of new-found office—is that what it is about? He is a member from a sector that is characterised by high emissions of methane of nitrous oxide and of other greenhouse gases that will be hugely affected if this bill goes through. 
Dr Paul Hutchison 
: Have you got any solutions? 
Hon DAVID CUNLIFFE 
: Yes we have solutions. One of those solutions is to ensure that we are able to have renewable energy flows which means that we can adjust with the least disruption to our economy. 
Hon DAVID CARTER (Minister of Agriculture) 
: 
 I move  
That the question be now put 
. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 It is somewhat ironic to be rising to speak on the Electricity (Renewable Preference) Repeal Bill when we have had such a lack of energy from the Minister in charge of it Gerry Brownlee. In fact I do not think he has taken a single call on this bill which is in his name—not a single call to speak on this bill. He got an exemption! Do members think he would be eligible for an exemption— 
Hon Member 
: Thermal generation! 
CHRIS HIPKINS 
: —for thermal generation? 
I am very happy to rise and speak on the title clause of this bill and to offer other potential titles. I thought maybe we could call it the “Climate Change Denial Bill”. But then I thought maybe we could call it the “Climate Change Denial Bill No. 2”. 
Moana Mackey 
: Or No. 3. 
CHRIS HIPKINS 
: Maybe even No. 3. The bill that we were debating immediately before this one the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill would be “Climate Change Denial Bill No. 1”; this bill would be “Climate Change Denial Bill No. 2”. 
I am a bit confused as to where Government members stand on climate change. I know that they are taking a balanced approach: on one day they say it is a hoax and on another day they say that of course they have always believed in climate change. Then they seem to come back again and say that it is a hoax. So I am a bit confused and I imagine that anybody listening at home would be a little bit confused as to the Government’s actual views on climate change. 
I notice that the Minister for the Environment Nick Smith is suddenly very quiet. Clearly he has been railroaded by the other members of his party. Maybe that is another potential title for the bill: it could be the “What Happened to the Bluegreens Bill”. 
Hon Dr Nick Smith 
: It was in the Bluegreens policy. 
CHRIS HIPKINS 
: Was it in the Bluegreens policy? 
Hon Dr Nick Smith 
: Yes it was. 
CHRIS HIPKINS 
: Is that right? So how is that possibly—in any way shape or form—green? 
Hon Member 
: It’s blue. 
CHRIS HIPKINS 
: It is blue—it is certainly very blue—but I am not sure where the green bit comes in when those members are saying that they do not really like renewable energy and they do not really think it is all that important. It is certainly not a high priority for this Government to make renewable energy important. This is the second bill in a row where we are debating whether to wind back the clock on renewable energy. That is what National seems to think is one of its most important priorities immediately on becoming the Government. In fact it thinks it is so important that the public of New Zealand should not have their chance to have a say on its decisions at all. The Government just rams the bill through under urgency without anybody having a chance to have a say. 
We could call this the “Clean Green Image Revocation Bill” because that is actually what this is all about. 
Hon Dr Nick Smith 
: It was only ever an image. 
CHRIS HIPKINS 
: Dr Smith says that it was only ever an image so we were never a clean green country. The people of New Zealand who are very proud of our clean green image will be very very disappointed to hear that. They will be very very disappointed to hear that according to this new National Government we are not a clean green country at all. 
Hon David Parker 
: Aotearoa—the land of the long white cloud. 
CHRIS HIPKINS 
: That is right—the land of the long white cloud. It is not a clean green country any more and according to National it never was anyway. So let us not worry too much about that—let us not worry about that at all! 
We could call this the “Where Has the ACT Party Gone Bill”. This is yet another bill being passed that has no regulatory impact statement. How many bills have been passed that have no regulatory impact statements or very inadequate regulatory impact statements? I wonder whether we have a Minister for Regulatory Reform now and whether he has a view on the fact that there is no regulatory impact statement on this bill and that there has been a complete absence of any form of regulatory impact assessment on the legislation that is being rammed through. We could call this the “Where Did Think Big Go Bill”. Where did Think Big go? This is the “Think Big Legacy Bill” perhaps. 
Members opposite have been talking about increased power prices but we know that in most instances thermal generation is actually more expensive than renewable generation. Why on earth does this Government want to promote more thermal generation— 
Hon Dr Nick Smith 
: So why do you need to regulate it if it’s cheaper? 
CHRIS HIPKINS 
: Perhaps the Minister for the Environment needs a little lesson on how the electricity market actually works. Maybe he could talk to the Minister of Energy and Resources but I am not entirely sure that he understands it either. I am not entirely sure that he has quite got to grips with that. 
Moana Mackey 
: He hasn’t got to that page in his colouring book. 
CHRIS HIPKINS 
: That is right. The picture book has not quite got up to that part yet. The cartoonists cannot quite draw it fast enough for him to keep up. 
There are many other titles for this bill. 
Hon Member 
: Hoax. 
CHRIS HIPKINS 
: It could be the “Climate Change is a Hoax Bill”. 
Grant Robertson 
: A balanced approach. 
CHRIS HIPKINS 
: It could be the “Balanced Approach Bill”. Again we are coming back to the balanced approach. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (Hon Rick Barker) 
: I will take one more call. 
MOANA MACKEY (Labour) 
: 
 I am happy to take a call on clauses 1 2 and 3 of the bill. Again I urge the Minister of Energy and Resources to get on his feet and actually respond to the criticisms and the questions of the Opposition. I hope the Minister is not running on renewable energy because if he is I am starting to think it ain’t so flash. Instead of sitting there and yawning looking through his picture book and doodling on the little bit of paper in front of him maybe he could take a call. 
I remind the Minister that we are in urgency because of his Government. He is giving us looks as though somehow it is our fault that he is forced to sit in the chair and answer questions. He is yawning like nothing else. I remind him that it was his Government that called urgency— 
Chris Tremain 
: And this is the title. 
MOANA MACKEY 
: —and is putting this bill through the House under urgency and that is the reason he is in the chair. Maybe we could call the bill I say to Mr Tremain the “Would It Not Be Wonderful If We Had a Minister in the Chair Who Took a Call Bill”. Maybe that would be a good title for this legislation. 
Once again we see legislation being rammed through Parliament under urgency that does not have to be rammed through Parliament under urgency. Maybe another title for this legislation could be the “We Desperately Need to Look Like We Are Doing Something in the 100 Days of Turbocharged Aspirational Action That We Promised the Electorate So We Are Forcing Through Legislation That Could Have Gone to a Select Committee Because We Have Decided That the Right of the People of New Zealand to Have Their Say at a Select Committee is Less Important Than Our Image That We Are Doing Something Bill”. I know that it is a long name but I think it fairly encompasses— 
Hon Member 
: It’s longer than the bill! 
MOANA MACKEY 
: —it is longer than the bill—what the bill does. I know that members on this side of the House have been making this point a lot during urgency. That is because 100 percent of the bills passed so far have been rammed through under urgency with no select committee process. That might be a record that the member is proud of and his little twitchy smile tells me that he is proud of it but the select committee process is important to this House. It is a way that we can make legislation better. There are concerns—[ 
Interruption 
] 
Hon Member 
: It protects them from themselves. 
MOANA MACKEY 
: It does. The Minister may think he knows everything but there may be some people out there in the country who know a little bit more about this and who want to have their say. People who are affected by this legislation might want to have their say and the Minister is denying them that right. I think that is appalling. 
Another title for this bill could be “Another Bad Day for the Planet Bill”. My colleague Steve Chadwick in her contribution earlier raised the fact that this bill is part of the trifecta of the urgency last week and this week. Mr Brownlee in either his first or his second reading speech—I cannot remember which one it was because they were so close together; they did not have the usual 6-month select committee process in between them and were about an hour apart—basically said that doing something will make things worse. That is also the argument we heard from Mr Brownlee on the biofuel legislation—that the fact that we had done something would make things worse than if we had done absolutely nothing and left it up to the market to decide everything. Well I say that it is shameful for a Government to absolve itself from responsibility like that. It may have no ideas on how to do anything but that does not mean it should be ramming through legislation under urgency to repeal legislation that was developed at a select committee and was passed through this House when it actually has no idea what it will do. 
This is yet another piece of legislation that puts the cart before the horse. The Minister is saying to the people of New Zealand: “Trust me; trust me that I will do what I said I would do and that I will implement all the things that I am promising to make this better.” Well why should we trust this Minister? He comes from a Government that in 2 weeks has made New Zealand a laughing stock on the world stage when it comes to climate change. 
Hon Dr Nick Smith 
: Rubbish! 
MOANA MACKEY 
: It is true I say to Dr Smith. The member probably has no concern about New Zealand being a laughing stock. He is probably quite used to it. But the fact is that is how we are now being seen. In 2 weeks the Government has undone a number of years’ worth of good work and for no reason. Today the Minister Gerry Brownlee—he might consider this a good day at the office—lost a businessman the $10 million that he had invested by repealing the biofuel obligation. The Minister in the chair might be proud of that—I do not know; I do not know what drives some of the people in the National Government—but one would think that it would be a bad thing. 
We could also describe this bill as incredibly bad for research and development in New Zealand. Last week we had the repeal of the research and development tax credit which would have helped some of our most innovative businesses some of which were doing work in this area. Mr Brownlee knocked them out last week. This week he is knocking out renewable energy. 
CHRIS TREMAIN (Junior Whip—National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Clause 2 agreed to. 
A party vote was called for on the question  
That clause 3 be agreed to. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Clause 3 agreed to. 
Bill reported without amendment. 
Report adopted. 
Third Reading 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 I move  
That the Electricity (Renewable Preference) Repeal Bill be now read a third time 
. What a demonstration of supreme arrogance we have seen from the Labour Opposition this evening. When the  
Hansard  
record is perused it will be extraordinary to note not only the weakness of Labour’s argument but also the fact that throughout the evening Labour members had to rely on a lot of personal attacks on colleagues of mine to get them through the argument. You see I suppose for all those new members who have come into the Labour Party there is no need to be apologetic about the debacle of the last election result. Of course they will be basking in the success that they have personally enjoyed. Unfortunately this debate confirms that the Labour Party is just as arrogant and out of touch today as it was on 7 November. 
The bill deals with this very very simple problem: for decades now we have seen a neglect of the generating assets of this country which has meant that New Zealand has put itself in the position of having a less than secure electricity system. If anyone on the other side of the House wishes to argue against that proposition I ask them to just look at the recent history. In 9 years the Labour Government managed to preside over four one-in-60-year events in the electricity sector. That is not something that just happened by coincidence. It is something that happened through that Government’s very much designed neglect. 
The thermal ban is very very symbolic. It was extraordinary to hear the previous Minister of Energy David Parker argue over and over that there was no need to repeal the legislation. In essence his argument was that it had no effect anyway. When we think about it we are left with the question about what exactly the plan was that that Minister was trying to follow. The reality is that over those 9 years not only did carbon dioxide emissions from the electricity generating sector climb considerably but so did the price that New Zealanders paid at a retail level for their electricity. The people Labour claims to be so concerned about—the poor and middle-income people who struggle to pay bills at times—saw a 63 percent increase in electricity prices over the time that Labour was presiding over this portfolio. 
More than that that figure represents a two and a half times inflation for each of those 9 years. That cannot be a record that any Government would be comfortable with. The question is why that occurred. Well it is simply that Labour was too harsh in the way in which it dealt with hydro-generating applications. They were knocked over one after the other if not by the resource management process then in many cases by the Minister of Energy or a Minister inside the Government. The consequential effects were that after the crisis of 2003 with great fanfare and a huge amount of trumpeting the Government backed the development of the e3p plant at Huntly by underwriting a gas contract for Genesis Energy. That is a thermal plant built by a Government that was so committed to renewable energy. As if that was not enough the Government decided it needed to back itself up by having an emergency capacity—a capacity that would produce up to 3 percent of New Zealand’s electricity needs at tight times. So what did Labour do? It built a 150 megawatt diesel-fired plant at Whirinaki. Those were Labour’s responses to the neglect that had gone on in those early years. 
Not only that Labour decided that it had better fix the organisation of the electricity industry by putting in another committee—another body another bureaucracy—the Electricity Commission. Over the first 5 years of its existence the Electricity Commission has taken some $230 million off New Zealanders. That is over and above the 63 percent price rises and over and above the two and a half times per year inflation rise. 
Hon David Parker 
: No it’s not! 
Hon GERRY BROWNLEE 
: I say to Mr Parker that it is. There we go: here is a man who has his head so far in the clouds that he does not even read his own electricity bills. That is a straight levy; it is $250 million taken straight out of the pockets of New Zealanders to set up a bureaucracy that has achieved what? We have gone from being a country that was able to generate its delivered electricity from 72 percent from renewable sources to a country that is now producing about 66 percent from renewable sources. It is a massive fall and all this has come from a party that all through this debate has said that it was all about renewable energy when it was in Government. I just find that totally totally—I cannot say the word that I would like to but I am incredulous. 
The member Shane Jones used a lot of “ous” words; he said this legislation was “ruinous” “egregious” and “circuitous”. Well I think many of those arguments could be mounted for the way the Opposition has handled this debate. Members opposite can screw up their faces all they like but they have an appalling record in this area. The barefaced facts are right there in front of them—72 percent down to 66 percent price rises of 63 percent $250 million out of the pockets of New Zealanders and this year 70 million - odd litres of diesel burnt in the Whirinaki emergency plant. That indicates that the party now in Opposition did not have a clue what it was doing in Government—not a clue. 
Hon Pete Hodgson 
: You’re going to get a history lesson in a minute Gerry. 
Hon GERRY BROWNLEE 
: Mr Hodgson—the man who presided over the establishment of the Electricity Commission the man who made the decision to underwrite the gas contract for Genesis and the man who made the decision to build Whirinaki—says he is going to stand up in a minute and give us a history lesson. Well history lessons are interesting but they make no difference to the consumers who have to pay the price. 
I tell the House that in advancing this bill we should put a bit of a rationale into the mix for decisions that will be made by those who invest in generation in this country. Why would we want someone who is proposing a wind project to have to go cap in hand to the Minister to ask whether he or she could put in some thermal generation to back up that particular project? It makes no sense. We think those organisations are capable of making those decisions themselves. 
There will be fuel substitution as a result of this legislation passing today. I suspect a greater number of renewable projects will be advanced because although the Government talks about them and they may well be consented very few are actually in the build stage. 
This legislation simply recognises the repeated comments put before the Finance and Expenditure Committee at the time it was first considered. Those comments essentially damned the proposition. It allows the industry itself to make rational decisions about how future investment is made and this country needs a heck of a lot more of that if we are to see some curb in the outrageous price path that is the legacy of the Labour Government. 
Hon DAVID PARKER (Labour) 
: 
 It will not be lost upon listeners to this debate and listeners to the debate in this House over the last 2 weeks that Gerry Brownlee who accused the Labour Opposition of arrogance for doing the job of the Opposition—in terms of trying to show the weaknesses in legislation and the poor processes—was the very member who under urgency has pushed through legislation that has not had the benefit of select committee consideration. That member sat in the chair like a stuffed dummy and did not take one call in the Committee on the Electricity (Renewable Preference) Repeal Bill—not one call. And we are accused of arrogance! He abused his position in the chair. He made the occasional interjection but did not take one call—not one call. His answer to curbing emissions growth in the electricity sector is to make it easier to build more fossil-fuelled thermal plants. When we boil it down we see that it is as simple as that. The Government is pretending to want 90 percent renewable generation but its answer is to make it easier to build more fossil-fuelled electricity plants. 
The Government claimed earlier that the legislation as it is currently drafted stops the retirement of inefficient thermal plants but that has been shown to be wrong. It is an issue that Mr Brownlee has not responded to either as the Minister in the chair or in his third reading speech. We showed that the legislation currently allows an exemption to the restrictions on new more efficient thermal electricity generation that retires old less efficient thermal electricity generation—a new gas-fired station to retire part of the coal-fired Huntly power station perhaps. But of course the ability to exert that sort of control is lost because of this repeal legislation and in future we will see more gas-fired power stations as well as coal-fired power stations. 
Mr Brownlee makes a lot of the fact that the e3p power station was built. Actually e3p was the only significant thermal power station added during the period of the Labour Government and it was necessary for the security of supply. That is why it was done. That is one of the reasons why we have security of supply exemptions under the legislation as it currently stands—they are occasionally necessary—but we have got to the point where it is less likely that they would be necessary in the future because we have brought forward wind power through good projects to reduce emissions. That makes it affordable and helps some of those projects through the consent process and in the last year we have built only renewable generation. Indeed against a background where we need to build additional capacity of about 150 megawatts a year to meet demand growth this year we have 426 megawatts of additional capacity under construction and it is all renewable electricity generation. 
So what we did turned the corner; it worked. We had geothermal and wind electricity generation coming forward and we also had some hydroelectricity generation coming forward. I am on record as saying that I do not think we should need much more hydroelectricity generation. It has too much of an adverse consequence on our rivers. But some hydroelectricity generation has been consented to and it will be built. That is another point where there is a lack of logic behind the Government’s plans and this has been disclosed by the Opposition speeches. Mr Brownlee has the temerity to call the Opposition arrogant because we were doing our job even though he did not take one call during his time in the chair. 
Mr Brownlee makes a lot of the Whirinaki power station. I think he referred to 70 million litres of fuel—I cannot recall the exact figure. It sounds like a big number and it is not small but he talks in litres. If we convert that figure to greenhouse gas emissions assuming 1 litre of fuel is roughly 1 kilogram of fuel we find that that is 70000 tonnes of carbon dioxide times two. So that is about 150000 tonnes of carbon dioxide. It is not insignificant but it is not enormous either. That is because although the Whirinaki power station has quite a capacity it does not run very much. It only runs about 1 percent of the time and when we need it we need it. We build thermal plants in that sort of situation rather than renewable plants because the capital costs are a lot lower and the running costs although they are higher are incurred only when we are really short and we need it for a short burst. 
This legislation is typical of the legislation that is now being promoted by the National Government. The Government says it wants to reduce emissions or to control emissions growth and it pretends that it wants to meet the goal of 90 percent renewable generation by 2025 but it will not take the steps that it needs to take in order to get there. National criticises any regulatory intervention saying that we should leave it all to market prices. It ignores the reality that in most of the market economies of the world there are regulatory interventions to lift the percentage of renewable electricity generation. The only real difference between New Zealand and Australia in that regard is that Australia is trying to lift from a very low percentage to something around 20 percent—I forget the exact number—and similar increases are being proposed in other countries. In New Zealand because we are already at around 66 percent to get to 90 percent we have to lift it by about 24 percent. So this regulatory intervention to lift it by 24 percent is not very different to the regulatory interventions taking place in other parts of the world. 
The last point I re-emphasise is that we cannot rely on a carbon price when we do not have a carbon price. How can we rely on a carbon price to stop new thermal electricity when we do not have one? How can you credibly stand up in this House and say that when you have a select committee set up to look at whether you should ever have a carbon price. We do not have one yet and the select committee will be considering whether we should ever have a carbon price or whether we should just adapt to climate change rather than trying to reduce emissions. How can you credibly say that you have a carbon price that will forestall extra thermal generation when the Government is not yet clear as to what the price of carbon will be? 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Please keep the Chair out of the debate. The member keeps referring to “you”. Please keep the Chair out of it. 
Hon DAVID PARKER 
: I am sorry Mr Assistant Speaker. 
The Government’s acolytes at the Business Roundtable—themselves fossils—are promoting fossil fuel use and a carbon tax and they say it should be $5 to $10 a tonne. We know that when push comes to shove they will be saying $5 a tonne. We know that $5 a tonne which is but 20 percent of the market price of carbon— 
Hon David Cunliffe 
: What’s the international market price? 
Hon DAVID PARKER 
: The international price is around $25 a tonne at the moment. Four-fifths of the cost would be left with taxpayers and the Government would expose the participants in the electricity market to only 20 percent of the cost. That $5 a tonne would not be sufficient to forestall investment in thermal generation. It just would not work. So how can we pretend that we can control the growth in fossil fuel electricity emissions by putting a price on carbon when first we do not have it and secondly if we did have it it might be at an artificially low price that would not work? 
In terms of the projects that we already have consents for the details of these have been listed and provided to those who are now members of the Government on many occasions. Those members made Official Information Act requests and asked questions in the House and the details of the projects have been provided to them many many times. They know like we know that our cheap sources of generation that are readily available from renewable sources include geothermal generation. There has been a renaissance in geothermal generation in New Zealand and we are very very lucky to have it because were it not for that geothermal generation it would be quite difficult for us to meet that 90 percent target whilst maintaining the security of supply. That geothermal generation provides baseload generation. We have substantial quantities available and we already know that it is economically sound because Mighty River Power and Contact Energy are both heavily investing in geothermal generation in order to bring those renewable projects to market. 
I also refer to some of the confusion that the Minister of Energy and Resources referred to in his criticisms of the Electricity Commission. What does the Electricity Commission do and why did we need it? Well one of the reasons was that after Max Bradford’s reforms New Zealand was the least-regulated electricity market in the world. We had completely unregulated lines businesses; we now have regulated lines businesses. At the time of the previous National Government we had about $50 million per annum being spent on capital investment in the transmission grid. That is now up to half a billion dollars per annum—a tenfold increase. So there is that level of investment which is improving the security of supply. The Minister says security of supply is so parlous after 9 years of a Labour Government but the reality is the opposite. Security margins in transmission have been improving year by year. 
Hon Dr NICK SMITH (Minister for the Environment) 
: 
 The first point I make in this debate on the Electricity (Renewable Preference) Repeal Bill 
is that there are some really important issues on which there is agreement across the House. The first of those is that climate change is the biggest and most important issue facing us the second is that greenhouse gases need to be constrained and the third is that we need to increase the amount of renewable energy we are generating in New Zealand. You see the real argument here is not about the objectives but about how to get there. Where members disagree is that members on the Government side of the House favour price instruments and reform of the Resource Management Act rather than the very crude and blunt regulatory instrument that we are repealing. 
We have heard all sorts of extravagant claims from members opposite. Let me just go through their record during the last 9 years. Let us be fair here. Labour was in charge of climate change policy for 9 years and National has not had 9 weeks. Before members opposite get on their hind legs and lecture us about successful climate change policy I remind them what has actually occurred over the last 9 years. Emissions have increased from 68 million tonnes to 78 million tonnes. They have gone up by over 1 million tonnes per year. In terms of renewable energy the record of the last decade shows that 75 percent of new generation that was built during the course of the last Government was thermal generation. 
When we look back over the record of the last Labour Government and compare it with that of the previous National Government the Lange-Douglas Government prior to that the Muldoon Government prior to that the Norm Kirk Government prior to that and the Holyoake Government prior to that—and we can actually go all the way back to when the lights first went on in Reefton—we see that a greater proportion of thermal generation took place under the previous Labour Government than under any of those previous Governments. 
Regarding international comparisons the part I find most extraordinary about Labour’s contribution to this debate is that its members have said that Labour’s record of world leadership is being compromised by this legislation. Let me remind members opposite that I have here the record of the United Nations on increased emissions. Our records only go up to 2006 but my officials advise me that the record for 2007 and through to the end of 2008 is likely to be even worse. Let me compare the records where we have data. To the end of 2006 New Zealand’s emissions grew by 12 percent. Over the same period emissions in Australia grew by 8 percent and emissions in the United States grew by 1 percent. Again let me put the record straight. The record of the last Government on the increase in emissions was 12 times worse than that of the US under George W Bush. In the United Kingdom emissions went down by 3 percent. In Germany they went down by 2 percent. 
The only thing Labour led during its period of Government was an increase in greenhouse gas emissions. 
Hon David Cunliffe 
: So you would want an incentive for renewables? 
Hon Dr NICK SMITH 
: I say to Mr Cunliffe who was a member of the Cabinet for that period that we on this side of the House think a new approach is required. What is that new approach about? 
Hon David Cunliffe 
: What is it? It is promoting fossil fuel burning. 
Hon Dr NICK SMITH 
: I ask Mr Cunliffe why 75 percent of the generation built under Labour was thermal. I ask whether any member opposite can tell me why 75 percent of new generation built while David Cunliffe and Steve Chadwick were Ministers was thermal. 
Let me answer the member’s question about what this Government thinks is a logical approach to this challenge. One of the biggest challenges for renewable energies is getting resource consents. Let me give members an example from this very city. Meridian Energy applied for a consent to build a major wind farm here in Wellington and it took over 2½ years to get consent for that wind farm to be built. I think members on both sides of the House think that that wind farm would be a good thing and that we need to bring it on stream. The truth is that by taking so long to get through the resource consent process the previous Government had to build a lot of thermal generation to keep the lights on in the interim. This Government says it is time for a new approach. We will be bringing amendments to the Resource Management Act to streamline the process for the construction of new renewable energy because that is the logical approach by which we can deal with emissions. 
The question to ask is where we will provide the incentive. The part that is extraordinary about this Act we are repealing is that we could build the Huntly power station under it. I will tell members why. When the Huntly power station—the biggest single contributor of greenhouse gas emissions—was built it was very clear that it was built as a peak-load station. I ask what sort of Act allows a Government to build a massive coal-fired power station as a peak-load station. How does this Act that we are repealing in any way protect the environment when someone could build a massive 1200 megawatt coal-fired power station say it was a peak-load station and get that station exempt? I ask whether a single member of the House really believes that that is logical. 
The last important point I make is that the one area I must say the previous Government did some good work was in developing a pricing instrument. The real way forward is to ensure that in every hour of every day every electricity generator has a clear financial incentive for renewable power over thermal—not when it is built but in every single hour of every single day. That is why I say as the incoming Minister for Climate Change Issues that getting a pricing instrument is a very important priority if we are to do better as a country in this important area of climate change. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 The witching hour is approaching so I will limit myself to just a few remarks and take up the call at 9 o’clock tomorrow morning. 
I address the first remarks made by the Minister of Energy and Resources Gerry Brownlee at the beginning of this third reading debate when he called the Labour Party arrogant. I want to place on the record a rebuttal to those comments. It was not this party but National that decided that the Electricity (Renewable Preference) Repeal Bill would be debated under urgency. It was the Government not the Opposition that set the pace and decided we would be debating until midnight. It was the Government not the Opposition that said that this legislation must not go near a select committee and that it must go through the House the week before Christmas when no one else is listening or taking a care because they are concerned with other matters. The Minister through the entire Committee process did not take a call except by way of interjection at which point he was sat down Mr Assistant Speaker Barker by your very good self. The Minister took those actions yet he calls the Opposition arrogant. That is a case of the pot calling the kettle black if ever there were one. 
The Opposition’s job where it opposes legislation is to fight it to the closure. We have fought this bill to the closure and we will continue to fight it during the third reading debate until the time has expired. That is our way of offering opposition to something that we think is wrong. We take our opportunity to say why we think it is wrong. The Minister on the other hand took no opportunity during the Committee stage to either put his own arguments or rebut ours yet he got up in the third reading debate and said we were arrogant. That is unfortunate. 
I want to say some other things but it depends on the time available. Perhaps I can sneak in a very quick story about Whirinaki power station. Whirinaki was built by the New Zealand Government in the Hawke’s Bay in around 2004 as a 150 megawatt diesel-fired power station. It was built there because until 6 months earlier there had already been a 150 megawatt diesel-powered station at Whirinaki. 
Debate interrupted.