Powering Our Future - Presentation, 16 February 2007

Slide 1: Outline

• Context for govt's energy policy agenda
• Review of action areas
  • Issues, options and decisions
• Consultation process

Slide 2: Our Challenges

• Secure and affordable energy to support our way of life, and economic development
• Respond to climate change and tackle carbon emissions from energy
• Articulating future directions under uncertainty

Notes

Context:

• Increasing concerns about global energy supplies
• Growing awareness about the likely costs of climate change impacts.

Slide 3: Our (Draft) Vision

Notes

First part of vision captures security dimension.

Second part captures triple bottom line - sustainable environmentally, economically, and socially.

Vision is based on a sound understanding of New Zealand's current and future energy supply options, our future energy demand needs, our research capabilities, New Zealand society's values and our international responsibilities.

Slide 4: Proposed Policy Platform

• Powering our Future - the draft New Zealand Energy Strategy to 2050
• Draft New Zealand Energy Efficiency and Conservation Strategy
• Measures to reduce greenhouse gas emissions in New Zealand post 2012
• Transitional Measures to 2012

Slide 5: Outcomes Sought

1. Strategic Leadership
2. Security of Supply
3. Energy Efficiency Potential Realised
4. Renewable Energy Uptake
5. Greenhouse Gas Mitigation
6. Sustainable Technologies Deployment

Slide 6: Energy and Climate Change

Slide 7: Energy Emissions

Slide 8: International Context

• Future international arrangements uncertain
• Processes to build post-2012 climate change arrangements underway
• Effective arrangements need participation by major emitters
• Price on greenhouse gases likely

Slide 9: Towards a Price for Carbon

• Broad-based post-2012
• Short term compatible with longer term
• New fossil: face cost of carbon
• Emissions from existing fossil fuels: transitional path towards full cost
• Recognise benefits of new renewables

Slide 10: Encouraging Renewables

Preferable that all new generation be renewable, except to the extent necessary to maintain security of supply

Slide 11: We Have Raw Energy in Abundance

Notes

• In 2005 New Zealand's total primary energy use was 732 PJ.
• The resources are those deemed to be technically feasible though not necessarily economically feasible with current technology
• The graph shows how much we could technically derive every year relative to 2005 total energy demand e.g. potential wind resource equivalent to 6 times New Zealand's total energy demand in 2005. Both Solar and Marine are orders of magnitude greater than 10 times.
• Fossil fuels are exhaustible. Adding Lignite and Coal together we have a known resource for about 175 years.

Slide 12: Renewable Electricity Appears Competitive Already

Slide 13: Policy Issues

• Influencing investment until carbon is priced
• Addressing any barriers to renewables
• How and which emerging technologies to support

Slide 14: Measures to Encourage

• Triple bottom line reporting for generators / retailers - new requirement to report carbon emissions
• Consolidated RMA consenting process for wind and geothermal
• Marine energy fund
• Transitional measures

Slide 15: Energy Efficiency

• Makes sense to invest in energy efficiency if cheaper than new capacity
• Supports multiple objectives
• NZES articulates role for govt
• NZEECS to set priorities for action
  • Sector-based approach

Notes

The Energy Efficiency and Conservation Act requires a strategy covering efficiency, conservation and renewable sources of energy.

Strategy must have

• Objectives
• Targets
• Means to achieve the targets

Looking to set sectoral energy efficiency targets and seeking input to help set targets for the growth of renewable energy.

Slide 16: Electricity Security of Supply

Slide 17: Actions to Ensure Security

• Improving the electricity market
• Reduce lines companies restrictions to generation and retailing
• Increasing energy efficiency
• Promoting hydrocarbon exploration
• Bedding in existing gas market arrangements
• Clarifying the long-term cost of emissions
• Investment in the grid

Slide 18: Low Carbon Transport

Slide 19: Climate Change, Peak Oil and Transport

Total Energy

Slide 20: Peak "Cheap" Oil

• Future oil prices uncertain and prone to shocks
• Higher oil prices enhance economics of alternatives
• Will climate change be the main driver of change in transport?

Slide 21: Towards Lower Emissions and Increased Diversity

• Multiple options: public transport, fleet efficiency, renewable fuels, electric vehicles
• Major change will take time
• Biofuels obligation is a start and creates potential for more substantive contribution

Slide 22: Promoting Sustainable Technologies

• Strengthen international linkages
• Industry taskforce: biofuels and electric vehicles
• $8m contestable fund to support deployment of marine-based generation
• Smart meters

Slide 23: Stakeholder Input

• Feedback sought
• What options are favoured?
• Need to work together
  • To formulate
  • To implement
• Final NZES will set govt work programme
• What's missing?

Slide 24: NZES Consultation Process

• Regional briefings and hui
• Focused stakeholder meetings
• Bridging forums in Auckland, Wellington and Christchurch
• Written submissions by 30 March 2007
• More information: New Zealand Energy Strategy

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