ELECTION 2020: Competing energy policies

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ELECTION 2020: Competing energy policies

6 Oct 2020 | Eamon Rood

The various political parties’ election campaigns are focused largely on managing the pandemic and economic recovery.

But smart energy policy will be crucial in underpinning a shift to a cleaner economy that also delivers in terms of energy security and economic development.

Every party seeking to return to Parliament in October supports far-reaching decarbonisation.

But that still leaves room for some very stark differences in approaches, timetables, funding, and priorities.

The Business NZ Energy Council warns that “siloed thinking” can lead to unintended consequences and poorly allocated resources.

It says supplier and technology neutrality should be paramount.

What is BEC suggesting and how do the five parties now represented in Parliament measure up?

Business NZ Energy Council wish-list

BEC recommends a whole-of-energy strategy for the next term of government.

That should focus on decarbonising transport, industry, and primary, commercial and residential sectors, the organisation says in its 2020 Energy Briefing.

BEC says removing significant first-mover disadvantages would free-up energy investment.

More collaboration between business and government is desirable. BEC suggests renewable fuel certification schemes and fuel efficiency standards for imported vehicles as possible options.

It also says “don’t burn the gas bridge” nor neglect the “forgotten friend” in energy efficiency.

BEC executive director Tina Schirr says the energy sector must balance survival and recovery amid the Covid crisis, versus the long-term need to cut carbon.

Given this, policymakers must weigh the implications of the speed and direction of any energy transition.

“Energy-related projects often stimulate significant investment and can create jobs where there is a sound regulatory environment across the sector,” she says.

“We seek to collaboratively and constructively address how rules, incentives and markets can best be harnessed to shape evidence-based policy informed by our BEC scenario modelling.

“Together we can achieve the transition to facilitate greater technological diversity without undermining the energy system we have.”

Labour – eyes on electrification

Labour is pushing hard on electrifying the grid, as well as industrial process heat and transport.

It will ban new thermal baseload generation and has brought forward its target for 100 per cent renewable electricity generation by five years to 2030.

Pumped hydro is one key to achieving the target.

Labour is focused on a giant pumped hydro storage solution at Lake Onslow in central Otago, but is also considering smaller North Island projects.

Labour is also keen on green hydrogen for transport and industry. It will set aside another $10 million for developing the hydrogen roadmap, investments, and strategic partnerships with other countries. This is on top of its existing Green Hydrogen Strategy and support for a hydrogen-refuelling network.

The party also intends to develop a new National Policy Statement for Renewable Electricity Generation to remove regulatory barriers to new renewable projects.

There is less emphasis on solar. But it does promise to investigate barriers to solar micro-generation for residential and commercial buildings, and to streamline connection and pricing processes for distributed generation.

Labour will also use state agencies to find cost-cutting energy efficiency measures and to install new solar, particularly on new buildings.

National stays ‘fuel-neutral’

National advocates a ‘fuel-neutral’ path, limiting government’s role to regulating greenhouse gases through mechanisms such as the Emissions Trading Scheme.

To that end, it would overturn the 2018 ban on new offshore oil and gas exploration and investigate technologies such as carbon capture and storage, which it aims to grant ETS recognition.

National also supports new forms of energy, including hydrogen, offshore wind, and biomass, and it wants to help the oil and gas sector minimise emissions.

The party wants to work with the Ara Ake future energy development centre and in fostering new technologies such as artificial intelligence demand-response, distributed energy consumer two-way trading, peer-to-peer trading and smart charging.

National has also promised to repeal the Resource Management Act and to implement a less complex legal and regulatory framework.

Contrary to Labour’s ‘no new mines’ promise, which has yet to materialise, National supports a case-by-case assessment for mining lower-quality conservation land. It would also introduce a ‘net conservation benefit’ approach to new mines on land outside of Schedule 4.

Green Party – from fossil fuels to first movers

The Green Party aims to phase out industrial coal use by 2030 and industrial gas use by 2035.

It would issue no more fossil fuel extraction permits, onshore or offshore.

It would also ban new fossil-fuelled industrial boilers, while trebling support to business to find clean alternatives.

The Greens are pushing hard on rooftop solar. They would allocate $1.27 billion from the Covid-19 recovery fund towards solar and batteries on all suitable state houses.

The party says this would add 250 MW of solar capacity while lowering power bills and enabling energy-sharing schemes for people in state homes. It says solar could be installed on half of the country’s 63,000 state homes within the next parliamentary term.

Homeowners and landlords would be eligible for subsidies through the grant and $250 million would be allocated to fund community and iwi solar and energy-sharing schemes.

The Greens want a new National Environmental Standard for wind energy generation and to revise the existing renewables NPS to make it easier to upgrade existing windfarms.

The party also wants to work with Transpower to solve first-mover disadvantage so grid upgrades can happen faster with costs shared fairly. It would require lines companies to collaborate to achieve shared benefits.

The Greens see room for flexible ICP use so power sharing schemes work more easily, possibly through changing the Electricity Authority’s multiple trading relationships rules.

The party also supports investigating pumped hydro, subject to appropriate ecological safeguards.

ACT puts forward 'no-nonsense' plan

ACT’s self-described “no-nonsense climate change plan” would repeal the Zero Carbon Act, the offshore oil and gas ban, and the ETS. It would also implement a carbon price tied to major trading partners.

The policy emphasises using gas to displace coal, support high-value jobs, and deliver dry year security.

A streamlined consenting and land access process would fast-track development while protecting areas with high biodiversity and conservation value, the party says. This includes requiring the Department of Conservation and the Environmental Protection Authority to consider and approve applications in under 12 months.

ACT would require mining companies to put up hefty bonds, undertake progressive restoration, and make significant investments to deliver positive biodiversity outcomes. This means amending (but not repealing) the RMA, the Conservation Act, and the Environment Act.

The party also wants to separate the Ministry of Business, Innovation and Employment’s resource development and enforcement functions.

New Zealand First – axe the EA and keep Tiwai until 2040

New Zealand First wants to remove the Electricity Authority and give its responsibilities to the Commerce Commission.

The party will investigate a hedge-market structure that encourages more “genuinely independent” retailers in the electricity market if it has a seat in the next government.

New Zealand First would also commit to an agreement keeping Tiwai Point aluminium smelter open for another 20 years.

The party says businesses and households need confidence and surety in electricity prices.

While it has an aspirational goal of achieving 100 per cent renewable electricity by 2035, it also acknowledges the “exponential marginal cost” as the country approaches that goal.

New Zealand First intends to keep gas in the energy mix but it also proposes continued support for developing fossil-fuel alternatives.

These include net metering, incentives for household solar panels and generators, and exploring green hydrogen for domestic use and export.

It also calls for government to “urgently advance” development of waste-to-energy schemes.

Contact: Eamon Rood