[ Last Updated 11 October 2007 ]
Short Description
Speech notes for launch of the New Zealand Energy Strategy and the New Zealand Energy Efficiency and Conservation Strategy. Grand Hall, Parliament, Wellington.
Today the government is launching two important strategies aimed at making New Zealand more sustainable, and at ensuring secure energy supply.
The New Zealand Energy Strategy and the New Zealand Energy Efficiency and Conservation Strategy are the Government's roadmaps to a resilient, sustainable, low emissions energy system. They are important steps towards our aspiration for a carbon neutral New Zealand.
It's almost a year since I issued the challenge for New Zealand to work towards becoming a truly sustainable nation.
In that short time, much has changed and much has been achieved.
Sustainability is now the big issue challenging politicians, policy makers, business, and communities around the world. It has become the major theme of international meetings from Davos to APEC.
Last year New Zealand worked hard to get a reference to climate change included in the APEC Leaders' Summit communiqué. This year, climate change was the key theme for the Summit.
At home our government has been putting its own house in order, with the public sector beginning the transition toward carbon neutrality. New sustainable procurement guidelines have been issued for government departments, along with guidelines for travel plans, and for high Green Star ratings when new accommodation arrangements for departmental staff are being made.
We have new policy initiatives ranging from the emissions trading scheme to permanent forest sinks, biofuels sales obligations, improvements to the building code, and stronger waste management legislation.
It was heartening to see a recent opinion survey report that 85 per cent of New Zealanders expect the government to take action on climate change and sustainability.
I believe that the overwhelmingly positive reception to the Emissions Trading Scheme reflects not only the care with which it was developed, but also widespread public acknowledgement that action to reduce emissions and make us more sustainable is necessary.
New Zealand's leadership on these issues is being recognised internationally, and is providing us with a strategic advantage shared by few other nations.
Last week the British Prime Minister, Gordon Brown, invited New Zealand to participate in talks to develop an international emissions trading market. The government has accepted his invitation, and looks forward to New Zealand being in on the ground floor of the development of what will be an important new market in the twenty-first century.
Two weeks ago the United Nations announced that New Zealand will be the lead country in the celebration of World Environment Day in 2008. Our country was chosen because of our pioneering role in working for a sustainable future.
The recognition that New Zealand is taking action on these issues is vital to the promotion and protection of our international image.
Our reputation as a country with a clean and green environment is priceless. Failure to protect it by inaction on sustainability would pose a considerable economic risk to New Zealand.
It is within this context that the Government has developed the Emissions Trading Scheme, the Energy Strategy, and the Energy Efficiency and Conservation Strategy.
The Emissions Trading Scheme establishes the framework for pricing all greenhouse gas emissions. It is a comprehensive and fair scheme which will, over time, include all sectors of the economy, including the energy sector.
The New Zealand Energy Strategy being released today sets the strategic direction for the sector. It provides strong government leadership, and sets clear priorities for investment in renewable generation, efficient transmission, efficiency in energy use, and new technologies. It does so within a framework of competitive markets and effective regulation. It thus provides the sector with a clear direction for capital investment in the coming years.
The New Zealand Energy Efficiency and Conservation Strategy was developed alongside the Energy Strategy. It reinforces the goals of the Energy Strategy and the Emissions Trading Scheme through a range of policies and practical measures.
Inherent in the concept of a sustainable energy system is ensuring security of supply.
The strategy gives a clear direction that for the foreseeable future:
- it is preferable for all new electricity generation to be renewable, except to the extent necessary to maintain security of supply, and
- that investment should occur in energy efficiency measures where that is cheaper than the long-term costs of building extra generation capacity, including the environmental costs.
The analysis undertaken for the Energy Strategy shows that cost-effective renewables are available now. Therefore it is our view that there should not be a need for any new baseload fossil fuel generation investment for the next ten years. The government expects all generators, including state owned enterprises, to take this view into account when considering new generation investments.
Currently there are no powers to regulate or restrict new fossil fuel generation. Therefore the government will be considering regulatory options under the Electricity Act to limit new fossil fuel powered generation over the next ten years.
Over that ten year horizon, we expect renewable technology to have continued to have developed and become even more cost effective. We also expect to have a clearer picture of the practicalities and cost effectiveness of carbon capture and storage options, and whether they may allow for fossil fuels to be considered for baseload again.
Stakeholders have been telling us that it can be difficult getting resource consent for new renewable generation projects.
In response, we will be preparing a National Policy Statement under the Resource Management Act on renewable energy. This policy statement will help those who decide on resource consents to weigh up more fully the national and global benefits of renewable energy against any local environmental effects.
That does not mean that projects with unacceptable environmental effects will go ahead, but it will make it more likely that we can get the substantial increase in renewable generation our country needs.
The measures in these two strategies and the Emissions Trading Scheme will enable New Zealand to achieve the target we have set of generating 90 per cent of electricity from renewable sources by 2025.
That target is achievable using current technology and our own resources. It will deliver a more diverse energy base, and one less reliant on imported or locally sourced fossil fuels, - although locally sourced gas will continue to be important for our energy security.
The measures in the new Energy Efficiency and Conservation Strategy are also essential for meeting our objectives for renewables and secure energy supply.
They help us make the best use of our energy resources through better technology, smarter behaviour, and through investment to help families and businesses make the transition to an energy efficient future. Investing in energy efficiency and conservation makes good economic and environmental sense, and it delivers many social benefits too.
For families, more energy efficient homes are warmer, drier, and healthier to live in - and more affordable to run. Our strategies will lead to around 180,000 households receiving support for home insulation, clean heat, or solar hot water upgrades over the next eight years.
The savings that will achieve are substantial. Together with the setting of higher efficiency standards for electrical goods, the Energy Efficiency and Conservation Authority estimates these measures will cumulatively save consumers as much as $2.7 billion dollars on their power bills by 2025. That means a significant reduction in power demand too.
The strategy also focuses on how to help business become more energy wise. Measures being introduced or extended include more direct assistance for energy audits, training for workers involved in the installation of energy conservation equipment, and specific programmes for the agriculture and tourism sectors.
As many people noted in their submissions on the draft strategy, the biggest energy challenge is in the transport sector.
The government's objective is to halve transport emissions per capita by 2040.
We can do that by :
- using renewable fuels, such as electricity and biofuels
- significantly increasing vehicle efficiency
- using more efficient modes of transport, including much more public transport, and
- using travel demand management through smarter planning – including the promotion of walking and cycling.
There is a lot of detail in the two strategies on how to achieve the sustainable transport objectives we are setting, and a lot of work is already underway.
- We're working to develop an average fuel efficiency standard for light vehicles entering the fleet. It will be in place by the end of this year.
- This week, we've introduced legislation to implement the biofuels sales obligation. We have included in the legislation a clause to enable standards to be set which ensure that all biofuels used in New Zealand come from sustainable sources. There are legitimate concerns that some biofuel production causes the destruction of rainforests, or competes unduly with food production. We want to take care not to create a new environmental problem as we are trying to fix another.
- We have announced our goal of being one of the first countries in the world to deploy new vehicle technologies extensively, including plug-in hybrids and electric vehicles.
The Energy Strategy outlines a work programme to remove potential barriers to such vehicles, including looking at how they are classified, safety considerations, how land transport charges are collected, and making sure electric car batteries get charged up at smart times – and not when we're arriving home and cooking dinner!
What has become apparent as we have developed these strategies is that achieving a sustainable energy future which is also a secure energy future are not mutually exclusive goals.
The technology needed to achieve our goals, and the economic and environmental imperatives needed to drive investment are now in place.
Equally important, there is a developing social and political consensus, both here and internationally, that developing sustainable energy solutions is the smart thing to do.
New Zealand is uniquely positioned to achieve greater sustainability in the energy sector. That is a huge strategic advantage for us.
By developing a secure energy system based on renewable, low-emission generation, we can improve the quality of life for New Zealand families, drive the transformation of our economy, and cement in sustainability as a core part of New Zealand's identity and value system.
Many people in this room contributed to the development of these strategies through the submissions process. We value your input into the development policy, and I would like to thank everyone who participated in the process.
I would also like to acknowledge the leadership, hard work and commitment shown by David Parker, Minister of Energy, and Jeanette Fitzsimons, Government Spokesperson on Energy Efficiency and Conservation, in bringing these strategies to fruition.
Thank you.