Contribution to Governmen's Policies and Objectives
As stated above, the Arnold scheme would contribute to the government's stated objectives for the energy sector (energy efficiency and security of supply with an increasing focus on renewables) and is consistent with the principles for sustainable development.
Security of Supply
Ensuring security of electricity supply is a critical issue for all New Zealanders and for the government. There are two aspects to security of supply. Firstly, it is imperative to minimise the risk associated with dry years and secondly to ensure that New Zealand has the generation capacity over the long term to meet the projected growth in energy demand.
Growth in Energy Demand
A further aspect of security of supply is ensuring that New Zealand has sufficient generation capacity to meet the forecasted growth in energy demand. The recent Energy Outlook provided by the Ministry of Economic Development projects that the composition of New Zealand's energy supply and demand will change as the demand for energy increases, the Maui gas field declines and new technologies for the production, delivery and use of energy become more economically viable.
The Energy Outlook considers a range of scenarios, all of which predict increased electricity demand, ranging from an average of 1 percent per annum to 1.5 percent per annum over the period to 2030.1 There is some evidence to suggest that in the shorter term, increases in demand may be higher than these figures. Analysis of Grid Exit point data from 1999 - 2005 indicates that electricity demand is currently increasing in the range of 2.0 to 2.5 percent on average per annum.
It is important that, as the means become available, New Zealand undertakes the transition to renewable energy sources to ensure that we have the capacity to accommodate the growth in demand and to compensate for the likely decline in the availability of indigenous gas. The proposed Arnold scheme would contribute to the increased generation capacity required to satisfy demand while at the same time reducing New Zealand's dependence on non-renewable energy sources.
The New Zealand Energy Strategy
Building on the current central government energy policy context the government recently released a draft New Zealand Energy Strategy (NZES) for consultation. This reflects the need for government to take strong leadership and set a clear long-term direction to ensure New Zealand is well-placed to respond to the future energy security and climate change challenges it faces.
The strategy identifies priorities and develops an action plan to move towards achieving the government's sustainable energy objectives of reliable and resilient; environmentally responsible; and fairly and efficiently priced energy services for current and future generations.
The development of the strategy has been well-coordinated with the related work – particularly the NZEECS and climate change work programme. The NZES focuses on the long-term strategic direction for the energy system and aims to create a stronger national policy framework for renewable energy and energy efficiency.
In particular TrustPower's proposed development would contribute to the draft NZES's visions to maximise the proportion of energy that comes from our abundant renewable energy resources and reducing our greenhouse gas emissions through the development and use of renewable energy resources.
The success of national policy and recent legislative changes in support of sustainable energy practices depends to a considerable degree on its application at the local level.
The NZES builds on the Sustainable Development Programme of Action. The programme identified energy as one of the target areas for sustainable development because of its correlation to economic growth, potential environmental impact, and because both consumers and businesses are heavily reliant on its supply.
New Zealand Energy Efficiency and Conservation Strategy
The New Zealand Energy Efficiency and Conservation Strategy (NZEECS) is the government's primary means to achieve outcomes sought in the sustainable development programme of action. The purpose of the NZEECS is to facilitate the move towards a sustainable energy future for New Zealand by promoting energy efficiency, conservation, and a transition to the use of renewable energy sources.
A draft replacement NZEECS was recently released for consultation in conjunction with the draft NZES and climate change policy options.
The NZEECS presents sector-based action plans that would support the energy efficiency and renewable energy objectives set out in the NZES. They are:
- Maximising how efficiently we use our energy to safeguard affordability, economic productivity and our environment; and
- Maximising the proportion of energy that comes from our abundant renewable energy sources.
In particular the draft NZEECS sets the objective for clean electricity and heat – more energy from renewable energy sources for the electricity sector. The draft does not set specific targets, but indicates that targets for the electricity sector are under consideration. However, these will not be finalised until the final strategy is released in 2007.
Government Policy Statement on Electricity Governance
The Government's overall objective for the electricity industry is to ensure that electricity is produced and delivered to all classes of consumer in an efficient, fair, reliable and environmentally sustainable manner and to promote and facilitate the efficient use of electricity.
The government has identified a number of desired outcomes consistent with the above objective. The proposed hydro development would particularly contribute to achieving the following outcomes:
- the electricity sector contributes to achieving the government's climate change objectives by minimising hydro spill, efficiently managing transmission and distribution losses and constraints, promoting demand-side management and energy efficiency and removing barriers to investment in new generation technologies, renewables and distributed generation; and
- risks (including price risks) relating to security of supply are properly and efficiently managed.
Resource Management (Energy and Climate Change) Amendment Act 2004
The Resource Management (Energy and Climate Change) Amendment Act 2004 has recently been passed by Parliament. It seeks greater alignment between local government plans and national energy objectives outlined in the NZEECS and climate change policies, and aims to ensure that councils consider the contribution their regions can make to meeting New Zealand's commitments under the Kyoto Protocol.
Specifically the Act has amended section 7 (other matters) of the RMA to require decision-makers to have particular regard to the efficient use of energy, the effects of climate change, and the benefits associated with the use and development of renewable sources of energy.
4. The Ministry requests that the consent authority make the following decision:
Grant resource consent to TrustPower Limited to establish, operate and maintain a hydro development known as the Arnold scheme.
5. The Ministry may wish to be heard in support of its submission.
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