A preference for renewable energy sources, such as wind, has been expressed in recent government policy.
12 Refer to 4.2.1 section for more information
13 Toby Stevenson & Simon Hope (2007) “Costs to consumers of a narrow based emissions trading scheme in the NZ electricity market”; LECG, Wellington
a) Emissions trading scheme
In September 2007, the previous government released its Framework for a New Zealand Emissions Trading Scheme.14 This document set out the government’s in- principle decision to introduce an emissions trading scheme for greenhouse gas emissions, with implementation phased by sector over 2008 to 2012. The purpose of emissions trading is to put a price on emissions generated by activities such as fossil fuel-fired electricity generation, making these activities more costly than lower emitting alternatives, such as electricity generation from renewable sources like hydro.
b) National policy statements
Government has also recently been issuing National Policy Statements related to energy and infrastructure to assist local government in fulfilling its functions under the RMA. The purpose of national policy statements (NPS) is to set objectives and policies for matters of national significance that are relevant to achieving the purpose of the RMA. An NPS requires every local authority to amend its planning documents
“to give effect to a provision in a national policy statement”.15 Decision makers need to have regard to an NPS when considering resource consent applications under s 104(1)(b) RMA. The objective and policies of a NPS are intended to guide applicants and decision makers in making applications for resource consent, making decisions on the notification and determination of resource consent applications, drafting policy statements and plans that relate to renewable electricity generation activities, and exercising other powers under the RMA.
There are two NPS of relevance to an economic assessment of the benefits of the Puketoi wind farm – the National Policy Statement on Electricity Transmission16 and the National Policy Statement for Renewable Electricity Generation. 17 The Transmission NPS was issued in March 2008 to reinforce government’s commitment to renewable generation. This NPS notes that “on-going investment in the transmission network and significant upgrades are expected to be required to meet the demand for electricity and to meet the government’s objective for a renewable energy future, therefore strategic planning to provide for transmission infrastructure is required”.
The objective of the Renewable Generation NPS is “To recognise the national significance of renewable electricity generation activities by providing for the development, operation, maintenance and upgrading of new and existing renewable electricity generation activities, such that the proportion of New Zealand’s electricity
14 New Zealand Government (2007) The Framework for a New Zealand Emissions Trading Scheme, http://www.mfe.govt.nz/publications/climate/framework-emissions-trading-scheme- sep07/html
15 RMA 1991, section 55(2)(a).
16 National Policy Statement on Electricity Transmission, www.mfe.govt.nz/rma/central/transmission/index.html
17 National Policy Statement for Renewable Electricity Generation, www.mfe.govt.nz/rma/central/nps/generation.html
generated from renewable energy sources increases to a level that meets or exceeds the New Zealand Government’s national target for renewable electricity generation.”18— It also reinforces: ”… reaffirmed the target that 90% of electricity generation to be from renewable energy sources by 2025”19
c) Policy reviews by current government
On election in November 2008, the National-led government repealed the previous government’s legislative ban on the construction of new fossil fuel-fired generation capacity. It also passed legislation to amend the Emissions Trading Scheme. The introduction of obligations on electricity generation plant was deferred six months until 1 July 2010 and liabilities set at half the normal level until December 2012.
The current government also issued a new Government Policy Statement on Electricity Governance.20 This revised the previous government policy statement (GPS) to emphasise the priority to be accorded by the Electricity Commission21 to security of supply, to express the government’s desire to facilitate small grid upgrade projects by streamlining the investment decision process, and in deleting reference to the New Zealand Energy Strategy to 2050 and the New Zealand Energy Efficiency and Conservation Strategy because both strategies were scheduled to be reviewed.
It also passed the Electricity Industry Act in 2010, which created the Electricity Authority with revised responsibilities to replace the Electricity Commission, and made other changes to improve the operation of a competitive electricity market but made no reference to the development of new renewable generation.
These changes do not signal the abandonment of policies aimed at reducing emissions and promoting renewable electricity generation. In July 2010, the government released for public consultation a revised Draft New Zealand Energy Strategy and Draft New Zealand Energy Efficiency and Conservation Strategy.22 These draft strategies retained “the aspirational, but achievable, target that 90 per cent of electricity generation be from renewable sources by 2025 (in an average hydrological year) providing this does not affect security of supply”.23 Moreover, two of the 12 areas of focus identified in the draft strategies are “develop renewable energy resources” and “reduce energy-related greenhouse gas emissions”.
18National Policy Statement for Renewable Electricity Generation 2011
http://www.mfe.govt.nz/publications/rma/nps-renewable-electricity-generation-2011/docs/nps-reg- cabinet-paper.pdf, P18
19 National Policy Statement for Renewable Electricity Generation 2011 http://www.mfe.govt.nz/publications/rma/nps-renewable-electricity-generation-2011/docs/nps-reg- cabinet-paper.pdf, P26
20 http://www.med.govt.nz/templates/ContentTopicSummary____21482.aspx
21 Now the Electricity Authority.
22 http://www.med.govt.nz/templates/ContentTopicSummary____19431.aspx
23 See http://www.national.org.nz/Article.aspx?ArticleId=12069
d) The current government has not rescinded the previous government’s NPS on electricity transmission or stopped consideration of the NPS on renewable electricity generation. Kyoto Protocol and successor agreements The current government has shown no inclination to rescind ratification by New Zealand of the Kyoto Protocol and New Zealand has continued to participate in international discussions aimed at developing an agreement to take the place of the Kyoto Protocol from the beginning of 2013. The target that the government committed to at the round of negotiations held in Copenhagen in December 2009 was that, subject to conditions, New Zealand reduce its emissions to between 10%
and 20% below 1990 levels by 2020. The government has confirmed this opening offer subsequent to the meeting in Copenhagen.
New Zealand’s obligations under the Kyoto Protocol and successor agreements provide the economic incentive for New Zealand to reduce greenhouse gas emissions when the costs of doing so are likely to be less than the price of emissions entitlements in the international market. This incentive exists whether the country as a whole is in deficit or surplus relative to its obligations under international agreements. This is because a dollar of contingent liabilities avoided is economically no less valuable than a dollar of contingent assets acquired. In other words, if a unit of emissions has an international price of NZ$25, New Zealand is better off by the number of units of emissions it has avoided multiplied by NZ$25 per unit whether it is in deficit or surplus under its Kyoto Protocol obligations or any successor agreement of a similar nature.
e) Amendment to RMA
As noted in section 3.3a) above, the Resource Management (Energy and Climate Change) Amendment Act 2004 amended section 7 of the RMA specifically to require decision makers to have particular regard to the efficient end use of energy, the effects of climate change and the benefits associated with the use and development of renewable energy sources.
In summary, the Puketoi wind farm is consistent with the government’s broad energy objectives to secure energy supply with a focus on renewable energy sources and limiting climate changing greenhouse gas emissions.