Bridges SimonENERGY INNOVATION (ELECTRIC VEHICLES AND OTHER MATTERS) AMENDMENT BILLFirst ReadingHon SIMON BRIDGES (Minister of Energy and Resources): I move That the Energy Innovation (Electric Vehicles and Other Matters) Amendment Bill be now read a first time. I nominate the Commerce Committee to consider the bill. This bill will encourage—[Interruption]Mr SPEAKER: Order! [Interruption] Order! I do apologise. The Minister has the floor so for other members who are leaving the Chamber would they do so in a way that does not interrupt the Minister speaking.Hon SIMON BRIDGES: This bill will encourage innovation such as emerging energy technologies and business models so that New Zealand has the ability to respond to its changing environmental and energy objectives. New Zealand's environmental and energy priorities have been evolving. This Government is committed to improving the efficiency of our energy use and to meeting our climate change commitments. We need a shift in focus to reduce our emissions and improve our energy productivity and transport energy and process heat are key areas where gains can be made. I am excited about the new and emerging technologies that can be used to realise these opportunities. Ninety-nine percent of transport energy comes from non-renewable sources so increasing the uptake of electric vehicles offers huge potential for reducing emissions. The energy that our industries use to create heat for processing—for example for drying milk—is also largely non-renewable. There are opportunities to improve the efficiency of this energy use and to switch to using renewable energy sources or more efficient non-renewable sources like gas instead. Changing business models in the electricity industry are also part of the picture. The bill makes changes to ensure our legislation is fit for purpose and provides for innovation. The legislative changes in this bill are not large or complex. We found that our legislation does not need much change to provide for this emerging innovation but the changes we are proposing will make a significant difference. The bill is an omnibus bill in four parts. The bill will amend the Electricity Industry Act 2010 the Energy (Fuels Levies and References) Act 1989 the Land Transport Act 1998 and the Road User Charges Act 2012 to support this focus on reducing emissions and improving energy productivity while ensuring our legislation can accommodate innovation. The bill will achieve all this through four key measures. First the bill will make it possible for the Energy Efficiency and Conservation Authority (EECA) to focus more on improving New Zealand's energy productivity and reducing carbon emissions. EECA is the Crown entity that works to encourage promote and support energy efficiency energy conservation and the use of renewable sources of energy. Under EECA's current funding model its entire levy funding—almost half of its total funding—is recovered from the electricity efficiency levy which can be spent only on electricity efficiency activities. The bill enables the cost of EECA's activities to be spread across the levies for transport fuels and gas as well as electricity. This move beyond electricity will enable EECA to use its levy funding to undertake a broader range of activities giving it flexibility to focus on areas where the gain is the greatest.An example of this is EECA's electric vehicles promotional campaign and the low-emission vehicles contestable fund. The bill enables this flexibility in a way that recognises the importance of transparency and accountability and how levy money is allocated and spent. Regulations will follow to further implement the policy intent. This change also complements parallel work I am undertaking to refresh New Zealand's energy efficiency and conservation strategy which drives EECA's work programme and the development of wider renewable energy targets for New Zealand. Secondly the bill clarifies that a road controlling authority may use its by-law making powers to give electric vehicles access to special vehicle lanes. This measure covers electric vehicles that are powered solely by electric batteries as well as plug-in hybrid vehicles that operate on a combination of externally charged batteries and a petrol or diesel motor. Electric vehicles offer a way to leverage greater value from New Zealand's renewable electricity and therefore offer the most potential for emissions reduction while ensuring economic growth. We have seen that allowing electric vehicles in special vehicle lanes is the single-most effective non-financial incentive we can put in place to increase uptake. This is evident in places like Norway and California. It will ultimately be a decision for road controlling authorities like the Transport Agency and the regional councils to balance other transport objectives when deciding which special vehicle lanes to allow electric vehicles access to. I encourage them to seriously consider these matters but I believe that trials are a good way to initially test this around New Zealand. Thirdly the bill will enable heavy electric vehicles such as electric trucks and buses to be exempted from road-user charges. This mirrors the current exemption for light electric vehicles. Extending the road-user charges exemption to heavy electric vehicles is a transparent and efficient way to provide a financial incentive to encourage heavy electric vehicles over equivalent conventional heavy vehicles. The intention is that the exemption for heavy electric vehicles will be in place until they comprise 2 percent of the heavy vehicle fleet. Lastly the bill clarifies how electricity industry legislation applies to secondary networks. Secondary networks are smaller electricity networks that indirectly connect to the national grid typically through a local distribution network. They offer a unique business model that is becoming more widespread. Owning and operating a secondary network offers business owners greater opportunities for integrating new energy technologies such as combining solar photovoltaics and battery storage on a residential subdivision and for supplying those to consumers. Such innovations should be encouraged. Consistent treatment under the legislation will help this business model endure. The bill will provide regulatory certainty and improve consumer and market outcomes. It will ensure that consumers on secondary networks have the same access to dispute resolution as consumers on local electricity networks. The measures contained in this bill will assist the Government and New Zealand to respond to our energy-related challenges and climate change commitments. We need to ensure we target where the greatest gains can be made. The bill enables a focus on transport and process heat. It will encourage innovation by providing for emerging technologies ensuring evolving business models in the electricity sector are accommodated. Alongside other work the Government has under way and with concurrent changes to rules and regulations needed to give full effect to some of the bill's changes I consider that this bill will make a great contribution to New Zealand's efforts to reduce our emissions and improve our energy productivity. I commend this bill to the House.