Releasing the draft strategy this morning, Energy and Climate Change Minister David Parker said it was aimed at ensuring New Zealand developed a sustainable and affordable energy system that minimised greenhouse gas emissions.
This wouldll give New Zealand “an enduring competitive advantage over other countries”, according to Parker.
The strategy’s key elements include:
• Creating a pathway for the “internalisation of fossil fuel emissions” so the electricity generation sector bore the costs of those emissions;
• Introducing biofuels and electric vehicles to improve the efficiency of the country’s vehicle fleet;
• Increasing support for public transport and non-motorised forms of transport; and
• Greater energy efficiency, more solar water heating, and $NZ8 million of funding for early deployment of wave and tide-driven electricity generation.
"We are now developing a series of long-term programs which will make a significant difference to energy security and greenhouse gas emissions,” Parker said.
“Central to this is the aim that new electricity generation should be renewable, except to the extent necessary to maintain security of supply,” he added.
However, industry observers told PetroleumNews.net today that the Labour-led government seemed to be too focused on “clean and green”.
“Gas is supposed to be a transitional energy supply as the country moves away from oil and towards renewables,” said one observer.
“However, if the incentives are not there, then the E&P industry will go for the higher priced commodity, oil, to the long-term detriment of this country.”
Another said the downstream players that had moved upstream in recent years, mainly electricity and gas companies, might also rethink their exploration strategies, either focusing on oil and ignoring gas, or exiting upstream altogether.
“If the government shies away from encouraging domestic gas exploration, if we cannot provide the energy required, then we are looking at LNG imports and at an additional cost,” he said.
Contact Energy spokesman Jonathan Hill said it seemed silly to encourage renewable energy to the detriment of gas.
“Surely there is a continuing role for gas, and for building new gas-fired power stations to replace old, inefficient ones burning oil, gas or coal” he said.
“This would increase security of supply for the electricity industry and lower greenhouse gas emissions through the utilisation of more efficient plant,” Hill told PNN.
Both Contact and Genesis Energy are planning to commission new gas-fired power stations to help meet New Zealand’s growing hunger for energy, growth that is about 2% per annum.
Parker said the New Zealand Energy Outlook to 2030 publication predicted oil use to increase by 35% and energy-related greenhouse gas emissions to rise by 30% if New Zealand did not change the way it produced and used energy.
New Zealand was likely to need a combination of voluntary, price-based and regulatory measures if it was to reduce greenhouse gas emissions.
"New Zealand is in the fortunate position of being able to produce large amounts of low-emissions electricity from renewable resources, such as hydro and wind, which are plentiful and cheap by world standards,” he said.
"These proposals could make a significant difference to New Zealand's energy security and level of emissions, and put us on a path to carbon neutrality. They are crucial to transforming our economy, and to New Zealand's identity as a clean, green nation.”
The closing date for submissions on the draft strategy is next March 30.
