The Government’s response to the Electricity Price Review has failed to deliver meaningful savings for New Zealanders struggling with the rising cost of living, National’s Energy and Resources spokesperson Jonathan Young says.
“It is not good enough that the Government has failed to identify how much, if anything, these changes will reduce New Zealanders’ electricity bills by every year.
“Most of the changes merely tinker around the edges of the electricity market and won’t undo the damage caused by the Government’s failed energy policies.
“Some changes seem perverse and poorly thought through, such as removing prompt payment discounts while retaining late payment fees, which will punish people who pay their bills on time. These discounts can reduce electricity bills by up to $600 a year for the average household.
“The reckless decision to ban new oil and gas exploration will also increase weekly power prices for New Zealanders, increase global carbon emissions and risk our energy security.
“New Zealand already has one of the most renewable electricity markets in the world but the Government is pushing for 100 per cent renewable, which will see overinvestment in generation and could increase electricity costs by $300 a year for the average household.
“Despite initiating this review, there is no indication that New Zealand First is delivering on its election promises of restoring public ownership to Mixed Ownership Model gentailers, cancelling the transmission pricing methodology or transferring regulatory functions from the Electricity Authority to the Commerce Commission.
“National supports a competitive electricity market that is affordable, secure and reduces carbon emissions in the most efficient way possible.
“That is why we support some of the changes, such as greater transparency for the vertically integrated gentailers, improving liquidity in the electricity futures market, community level support for those in energy hardship, reducing barriers for consumers to switch retailers and removing the low fixed charge.”
The Coalition Government should be embarrassed that electricity generation using natural gas is declining, while generation using coal is increasing, National’s Energy and Resources spokesperson Jonathan Young says.
“The Ministry of Business, Innovation and Employment (MBIE) released their quarterly energy report, which shows a 19 per cent reduction in electricity produced by natural gas, but a whopping 62 per cent increase in electricity produced by coal over the last year.
“This makes New Zealand the only country in the world that is transitioning out of gas and into coal.
“MBIE advised the Minister of Energy on 10 April 2018 that gas reserves were at the lowest reserve to production level since 2003 and no new discoveries had been made since 2005.
“Two days later, Prime Minister Jacinda Ardern announced a ban on future exploration permits.
“New Zealand is now paying the price for this reckless, ideological decision as our dependence on coal has actually increased.
“The Government refused to consult with the sector on the oil and gas ban, rejected advice from officials, and didn’t request any analysis from the Ministry for the Environment or the Treasury.
“National believes it is important to have a plan to reduce emissions. However, it makes sense to use natural gas as part of the energy mix as we transition to a lower emissions economy. We believe in science-based, practical solutions rather than costly and ineffective virtue-signalling.”
The Government’s 2019-2029 Minerals and Petroleum Strategy includes a ban on new mines on conservation land, bypassing the promised consultation process, National’s Energy and Resources spokesperson Jonathan Young says.
“The strategy claims the Government’s first goal in modernising the Crown Minerals Act will be to reflect their objective of having no new mines on conservation land.
“But the discussion document on banning new mines on conservation land is already one year late. To then announce the intention in the Government’s Minerals and Petroleum Strategy prior to any consultation process is a slap in the face for the minerals sector.
“Any consultation now will be hollow and in bad faith. Mining in New Zealand has a long history. The sector is mining responsibly, creating much-needed jobs in the regions, and revenue and resources for the country.
“Mining has always been banned on Schedule 4 land in the conservation estate, but much conservation land is in fact little more than scrub land with limited conservation value. That’s where the Government is intending to ban mining activity.
“Although the strategy paper claims not to be engaged in setting future policy positions, this is completely incongruous with creating an ideological framework that policy positions must be aligned to.
“It smacks of a ‘Yes Minister’ mentality.”
The Government continues to drag out its reporting back on the Electricity Price Review and that’s causing frustration and increasing uncertainty for the industry, National’s Energy and Resources spokesperson Jonathan Young says.
“Wholesale electricity prices are 64 per cent higher this year than they were at the same time last year, costing companies millions more in energy costs that will be passed on to Kiwi consumers when they come to renew their electricity contracts.
“The Government should have delivered its response by now, and has given no reason for the delay. And its reckless oil and gas ban will further push up prices as New Zealand has to import more of its energy.
“Energy Minister Megan Woods is now focussed on managing the Government’s failed KiwiBuild policy, but she needs to reassure the energy sector that she hasn’t dropped the ball.
“The best way to do that would have been to produce a response to the Electricity Price Review report in a far more timely manner.
“Delays like this aren’t new for this Government. The response to the 100% Renewable Generation by 2035 report was delayed for many months, and we’re still waiting for the report on the Refinery to Auckland Pipeline inquiry, which the Government took over a year to initiate after significant fuel shortages in Auckland.
“Whether it’s a matter of the Minister being too busy or other factors that are causing this delay, the sector needs certainty now.
“If the Government wants the electricity sector to lead on decarbonising energy, it needs to let the industry know what its expectations and regulations will be.”
Energy and Resources Minister Megan Woods continues to ignore the fact her renewable electricity policy will see electricity prices rise which will hurt our most vulnerable, National’s Energy and Resources spokesperson Jonathan Young says.
“Ms Woods 100 per cent renewable electricity policy will see electricity prices increase from 14 per cent to 39 per cent. This means an extra $300 a year for the average Kiwi household.
“Increases in electricity prices will end up hitting low income households the most, particularly Māori and Pasifika households and vulnerable families in poor quality housing. These are the New Zealanders who are least able to afford this increase.
“The Interim Climate Change Commission report shows that the 100 per cent renewable target should be abandoned. Ultimately, the target will make life tougher for New Zealanders.
“The Minister has a track record of ignoring reports that disagree with her policies, whether it’s on the increase of emissions her oil and gas exploration ban will create, or the unaffordable costs for hydrogen as a fuel for industrial process heat.
“On this occasion, because the disagreement comes from the much vaunted Interim Climate Change Committee, Ms Woods is refusing to acknowledge their advice in Parliament.
“Not only are electricity prices increasing, but the Government has increased fuel taxes three times, rents are up an average of $50 a week, and the cost of living is increasing. Piling on costs to the Kiwis who are least able to afford them goes against the Government’s kind and caring motto.
“This is just another policy that is hurting Kiwis rather than helping. New Zealanders can’t afford this Government, and they definitely can’t afford Ms Woods renewable electricity policy, especially coming into winter.”
Land Information Minister Eugenie Sage has once again gone out against official advice, this time by rejecting the Overseas Investment Office application to purchase land for mining purposes, National’s Energy and Resources Spokesman Jonathan Young says.
“Minister Sage has declined the application for Oceana Gold to purchase 178 hectares of rural land for a new tailings reservoir near Waihi. By doing this she has once again put her ideology above the facts. She has approved almost every application that isn’t mining related.
“Economic Development Minister David Parker disagreed with Ms Sage’s decision, saying that the project would create ‘substantial and identifiable benefits’. This was also supported by the officials who advised her on the decision.
“This follows on from her decision to block Bathhurst Resources from purchasing 20 hectares of land for the Sullivan Mine, once again against advice from her officials. She was criticised then for showing bias against mining.
“This decision needs to be challenged. Oceana Gold has been an exemplary company operating in New Zealand and has brought long-term benefits to the communities they have worked in, by investing hundreds of millions of dollars into those local communities through employment and contracted services.
“To say there are no substantial and identifiable benefits to this land acquisition is to say that this company has not been of benefit to the communities it has operated in, which is far from the truth.
“Eugenie Sage needs to be either an anti-mining campaigner, or an objective and fair Minister of Land Information - she can’t be both.”
New Zealanders will end up poorer as a result of the Government’s ban on new oil and gas exploration, but they’ll have nothing to show for it in terms of slowing climate change, National’s Energy & Resources spokesperson Jonathan Young says.
“NZIER has done the analysis that the Government ought to have done before recklessly banning new oil and gas exploration. The ban may read as a step toward a low-carbon economy but this report says its biggest achievement will be to wipe $28 billion off GDP.
“As expected, the Taranaki region fares the worst. The ban will reduce the region’s economy by almost 50 per cent. That’s $21,000 a year in real purchasing power per household wiped out in Taranaki between now and 2050. Nothing the Government has announced goes anywhere near making up for that loss.
“The report makes clear the Government rushed in, without an audit on the economic costs to New Zealand. Now the industry has funded the work itself from NZIER – work that Minister Megan Woods should have ensured was done.
“So incomes are down, unlike emissions and New Zealand’s options to transition to low emissions have been reduced and will come with greater cost. Ordinary Kiwis and New Zealand businesses will feel it in rising electricity costs.
“Natural gas is a lower emission energy source than coal for significant industries that need high process heat.
“Dr Woods says the Government wants a shift to electricity or hydrogen but the transition to hydrogen as a fuel source could cost up to ten times more than natural gas, making some industries uneconomic and driving up power prices for families already having to stretch each dollar further.
“We all agree on the need to reduce emissions but drawing a roadmap to 2050 after you’ve made a wrong turn down a no exit road won’t get us there. National would repeal the ban and ensure all options are on the table to combat climate change and safeguard our economy.”
It is a sad irony that in the first year of a Government that talks a big game on climate change, New Zealand burned the most coal in five years to keep the lights on, National’s Energy and Resources spokesperson Jonathan Young says.
“It’s a foretaste of the imbalances to come. New Zealand only has certainty of supplies of natural gas to generate electricity for the next six years. Beyond that Energy Minister Megan Woods has no way of knowing how soon new technologies and energy sources can fill the gap.
“Genesis Energy, which burns coal as the generator of last resort with 80 per cent of that going to other power retailers, is already stockpiling the fuel in preparation for next winter. While coal use jumped in the fourth quarter due to low lake levels and the Pohokura gas outage, increased use will become an ongoing theme as gas supplies deplete.
“That’s because Dr Woods doesn’t have a feasible plan to ensure new technology and energy sources will arrive soon enough and with enough scale to make up for the loss of gas.
Her answer in Parliament that New Zealand needs 4.5 new windfarms a year, but couldn’t say how much electricity that represented, shows us that she has no idea on New Zealand’s needs for electricity, and how to meet the growing demand.
“It isn’t good enough that Dr Woods talks up the promise of fuels such as hydrogen when her officials aren’t confident they will be in place in time. As a result, the outcome will be higher electricity prices and more greenhouse gas emissions – from imported coal.
“Dr Woods track record of refusing to listen to her officials means her decisions on New Zealand’s energy supply will put New Zealand’s economy and Kiwi jobs at risk.
“National would repeal the ban on new offshore exploration for hydrocarbons, and engage with all stakeholders in New Zealand’s energy sector to devise a rational and economically prudent path to low emissions.
“We absolutely believe the country has to respond to climate change but we need a solution that will work for New Zealand.”
Despite funding a new Garnet mine, the Government’s wider mining policy is still of significant concern for the people and economy of the West Coast, National’s Energy and Resources spokesperson Jonathan Young says.
“The Prime Minister and the Regional Development Minister may have got their photo op this week by doling out some cash but people living on the West Coast know that $140 million of grants and soft loans don’t go anywhere insulating the West Coast from potential damage the Government’s policies will bring.
The existing mining footprint on the West Coast has been described as putting a single ink dot on a piece of A4 paper.
“Mining is one of New Zealand’s most productive industries and it generates jobs for West Coast communities often feel they get a rough deal from Wellington. They don’t deserve to be fobbed off with some cash from Shane Jones’ provincial slush fund.
“Shutting down new mining opportunities on the West Coast puts hundreds of jobs at risk and is a tardy way to treat law-abiding businesses that have strong rehabilitation and conservation commitments, often enhancing the land mining companies work. New Zealanders expect a lot and the mining industry respects and responds to that.
“The previous National government had determined to open up low-value Crown land, streamlining permits and consents, through establishing a one-stop-shop for permitting and consents.
“Our policy is that access to Crown land will be decided on a case by case basis and we do not support blanket bans.”
It’s a dark day for the energy sector now that the Government has rammed through its ban on new offshore exploration, a ban National will reverse, National’s Energy and Resources spokesperson Jonathan Young says.
“The ban was poorly planned and won’t achieve the carbon emission reductions claimed by the Government and may increase emissions. It was made in a policy vacuum, ignoring the advice of officials and industry.
“The next National Government will consult widely on a planned, effective and smooth reduction of emissions to agreed levels. The transition will embrace new technologies and have measurable environmental and economic outcomes.
“We will support advanced low or zero-emission fuels as part of the energy mix of transport and industry in New Zealand. In areas where technology like batteries aren’t immediately suitable, natural gas is likely to be an important fuel during our energy transition.
“We will reach out to build linkages with significant countries and companies who are leading research & development in advanced fuels to ensure we are pursuing best practice and support further R&D in New Zealand.
“We will work to advance reform to enable Carbon Capture and Storage, that will significantly reduce emissions, alongside the industry’s commitment to move towards a low emissions future.
“We will collaborate to develop a cross-sector Energy Strategy aimed at increasing renewables, reducing emissions, managing energy costs, and maintaining energy security.
“We will strive to protect the economy, firm investment certainty, retain skilled people and minimise social disruption. And we will work to diversify the Taranaki economy alongside supporting the petrochemical industry.”