Fitzsimons Jeanette: Electricity (Renewable Preference) Repeal Bill — Third Reading 
Fitzsimons Jeanette: Electricity (Renewable Preference) Repeal Bill — Third Reading 
[Volume:651;Page:965] 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 In my final contribution to the debate on the repeal of the Electricity (Renewable Preference) Amendment Bill I shall try to run through some of the logic from first principles of what it is we are trying to do here. All but five members of this House acknowledge that the world and the future of humanity face a serious threat from accelerating climate change. New Zealand along with all OECD countries signed up many years ago to an agreement to try to do something about it. Since that time successive Governments have talked and done nothing about it until very recently. New Zealand’s greenhouse gas emissions are about five times the world average per capita. We are one of the worst polluters in the world in terms of greenhouse emissions per person. We therefore need to take action. 
In the latter years of the Labour Government it started putting in place a number of measures to try to reduce those emissions. All we hear from National is that emissions rose under the Labour Government—fast—and that is true they did because when no action is taken emissions are pretty much linked to the rate of economic growth. We can decouple economic growth from emissions by being smart. Some of the recent measures have tried to do that but now they have gone. 
So what could New Zealand do to reduce its emissions? We have a different emissions profile from all the rest of the OECD because half of our emissions come from agriculture. An assumption on the Government side of the House is that that means nothing can be done about them. There are actually quite a few things that can be done about them but they are not very easy or fast-acting. So agriculture is the hard bit. We got a soft target in 1997 at Kyoto in recognition of that fact. The rest is carbon dioxide that comes pretty much from burning fossil fuels and the biggest part is from transport. There are some low-hanging fruits in transport that we should be picking. So far there are no measures on the table to pick them although a lot of work has been done under the Energy Efficiency and Conservation Strategy to try to develop that. 
Then if we look at what is left we see we are very different from other countries in that the majority of carbon dioxide emissions in most other countries come from thermal electricity mainly from coal. But that is not the case here. Electricity emissions comprise about 10 percent of our total emissions but they are the easiest bits to fix. They are by far the easiest bits to fix because New Zealand has an abundance a huge wealth of renewable sources of electricity. Transport fuels are much harder. 
A logical decision is for us to tackle what is easy first. Let us tackle the emissions we can reduce at virtually no cost and with virtually no other downside. Electricity used to be virtually all renewable but over recent years mainly because we found an absolutely ginormous gasfield—gas cannot be traded between countries without huge investment in infrastructure which basically was not done when Maui was discovered—and had to use that up somehow in order to meet the take-or-pay agreement. So a number of gas power stations were built to use it up fast. Well Maui is now substantially depleted. We have had some other smaller gas finds but we are heading to the point where gas is going to be scarce for bulk-users like electricity. There is always likely to be some for direct users like homes and industries that use gas directly which is much more efficient than converting gas to electricity. In the meantime geothermal technology has improved wind technology has developed from fringe to mainstream and we have the next generation of renewables—like marine wave and tidal technology—starting to get their prototypes tested and obviously on the way. We also have a lot of opportunities to use direct solar heat for things we currently do with electricity. 
So the logical way to make a step down in our electricity emissions is to build renewable generation and not thermal generation. The first target of course must be to phase out the old Huntly power station—one of its four units at a time putting them on standby for a while before closing them completely. But even that will not get us to the 90 percent we want to get to without closing another gas station as well. So that is easy. There are heaps of renewable energy projects to build so let us get on and build them. 
David Parker and I working together in the last Government got work done by the Ministry of Economic Development and the Energy Efficiency and Conservation Authority to give us a thorough analysis of what the costs would be of going to 90 percent 95 percent and less renewable. We picked 90 percent because the costs of doing that were negligible. If we go to 95 percent we start to raise the costs because of having renewable power stations standing doing nothing in a wet year. We want to use the gas when we need it and not use it when we do not need it. The thing we absolutely do not want is baseload thermal power stations; we want to use them as peaking generation. At the moment the gas is used for baseload power stations. That needs to change. 
So the renewable electricity preference tried to deal with the easy part of our emissions first by establishing that no new baseload gas or coal stations would be built. One might ask why that is necessary if we have all these renewable sources. Well it would not be necessary if we had a single integrated electricity generator as we used to have with a very complex refined computer programme that told it what the next best thing to build was and the next best thing to run. We simply would not have got a Genesis Kaipara power station proposed under that situation. But because we now have a competitive market Genesis—because it has to grow in this business model and has to compete with those who are doing renewable generation and because it is not very good at renewable generation—sees itself as having a commercial advantage in building a gas-fired power station which is not in the interests of the nation. 
So this legislation aimed initially to put a little bit of blockage in the way of that and say that we should build the next best things for New Zealand not just the next best things for Genesis. Ironically the legislation did not really do that because it had in it the big Genesis loophole in subclause (e). When we tried to get that loophole closed we learnt that some of the people on whose votes the Government was relying to pass this legislation insisted that the Genesis clause remain. I find it interesting that none of those people are still in Parliament. That is the irony of politics. 
Hon David Parker 
: The whole thing is going anyway. 
JEANETTE FITZSIMONS 
: Of course the whole thing is going anyway. I also find it interesting to have been told by a very senior person in one of the other generators that had they gone to their board with a business case like the one for the Genesis power station in Kaipara it would have been their last board meeting. But it seems that a State-owned enterprise can put up a business case that is so bad that it does not make any economic sense at all just because it has this kind of business “need to grow need to compete” attitude. 
So this was sensible legislation but not particularly powerful legislation. Under the wrong Minister Genesis could still have got permission to build a baseload power station on the grounds that it was going to back out Huntly just like in the 1990s the Taranaki combined-cycle power station was going to back out Huntly and so got permission and just like e3p was going to back out Huntly and so got permission. I wonder how many power stations we could build in New Zealand on the grounds that they are more efficient than Huntly and Huntly still continue to run. So it is time we put a stop to that. New Zealand could have a brighter future on renewable electricity but the Government has chosen that that will not be the case. 
Mr DEPUTY SPEAKER 
: The question is that the motion be agreed to. Those of that opinion will say “Aye”—