Political parties' energy spokespeople speak at election forum on energy policies with red tape and the need to reduce fossil fuel consumption being major concerns

New Zealand has no choice but to burn more gas to generate electricity, according to the National Party.   

It told an election forum there should be more so-called peaking plants, powered by natural gas, which can be switched on and off quickly when electricity runs short during cold evenings in winter.

Other parties argued New Zealand should not burn more fossil fuel, or that this country was already making good progress on the supply of energy. Others said everyone would be better off with less political bickering.   Most speakers agreed the energy industry is being throttled by red tape.

The forum was attended by about 200 energy professionals. It was organised by a range of energy groups and came in the wake of warnings by Transpower in May and again last month that keeping electricity flowing was a real challenge this winter.

The speakers were the National Party energy spokesperson Stuart Smith, his Labour counterpart, Megan Woods, the Act Party's Simon Court, Jessica Hammond from The Opportunities Party (TOP), Julie Anne Genter from the Greens, and Shane Jones from New Zealand First.

Smith's concern was driven by the fact that wind turbines are sometimes becalmed and cold snaps can happen quickly.  But the Huntly power station that is supposed to fill in the gaps can take a day and a half to warm up.

So, he said New Zealand needed gas-fired peaking plants to resolve this problem, since they are relatively nimble. And he said their environmental impact could be mitigated by pumping CO2 underground and keeping it there – using technology known as Carbon Capture, Utilisation and Storage (CCUS).

But Smith said the crushing burden of regulation in New Zealand made schemes like these almost impossible to achieve.

Despite wanting gas-fired peaking plants, he supported renewable energy and a National Government would allow renewable energy plants to gain resource consent in no more than one year.

Simon Court of the Act Party took a similar line to National, arguing New Zealand was simply not in a fit state to deal with its looming energy needs.

“I have seen predictions that we need to deliver another 500 megawatts a year – the size of the Clyde Dam every year between now and 2050 - in order to meet climate and electrification targets,” Court said.

“Well it's not clear how that is going to happen …. we have a regulatory problem that can only be solved with a real change in direction.”

Court's argument was that intensive state regulation was an obstacle to innovation.

The Minister of Energy and Resources, Megan Woods, contested this view, saying New Zealand was making progress and there were opportunities as well as challenges for the energy industry.

“I have seen a steady stream of (overseas) investors wanting to invest in New Zealand because of the opportunities that we have here around renewable energy,” she said.

“We have got around $2 billion of committed renewable projects, and we have got work underway to establish the regulatory regime for offshore wind. I think there are huge opportunities for New Zealand.”

One issue that came up repeatedly in the debate was the ban on new offshore oil and gas projects that was unveiled soon after Labour was elected in 2017.

This prohibition was announced with little consultation and was widely criticised later.

Stuart Smith said the ban destroyed New Zealand's credibility in international markets, and he vowed to get rid of it if National was elected,

Shane Jones of New Zealand First was a member of that Government at that time and told his audience he had to battle to keep a straight face when it was announced.

He said the ban was very risky, because it could turn New Zealand into a passive importer of other countries' energy products instead of being a producer of its own.

“If we do end up requiring sources of gas but no longer want to tolerate an expansion of gas investment, or even coal investment, well then the market will ask where can they buy it, and will decide they have to import it.

“There is one thing that no Government can tolerate is the lights going out, or energy-dependent companies decamping from New Zealand because what was an historic advantage for New Zealand is no longer the case.”

Julie Anne Genter of the Green Party responded that New Zealand simply could not afford more fossil fuel consumption because of its impact on climate change. And it was imperative to face up to this practice immediately.

“The best time to deal with this was 20 years ago, the second best time is now,” she said.

And she was pleased the Government had moved to restore the price of carbon in the Emissions Trading Scheme (ETS), following a successful challenge in court against earlier policies that reduced the price of carbon.

“We have to work together on this, we need human co-operation like we have never had before. if we are going to enable future generations to survive,” Genter said.

Jessica Hammond of The Top Party said there was far too much squabbling between politicians of the left and the right.

“If you can't trust these people not to engage in be endless bickering and point scoring, then you are not going to have investor confidence,” she said.

“But we can have that, we can have confidence, there are so many natural endowments New Zealand has. That should make us a very attractive country, and we should be able to have investor confidence.”

Jones made a similar point, returning to the dead weight of regulation.

“If we are serious that we are going to use overseas investment and Kiwi stakeholders to boost our capacity to go through the de-carbonisation journey, then we need to have a regulatory framework that is fit for purposes.

“The level of delay (from current regulations) is extraordinary.  We would never have built the Benmore Dam with the thicket of regulations that we have at the moment.”

Jones' argument was that government rule-making could have the effect of either closing down industry or not getting it started in the first place.

But Woods was at pains to say businesses should not have to shut down to achieve environmental goals.

“De-carbonisation does not mean de-industrialisation," she said.

But Smith countered by saying de-industrialisation was already happening, and he cited the methanol plant in Waitara Valley, which was “idled indefinitely due to natural gas constraints”, according to a statement by its owner, Methanex.

Meanwhile Megan Woods said Labour was trying hard to deal with climate change.  She said a National-Act Government had signed up to the Paris accord on climate change “with no idea on how to achieve it.”

And New Zealand was not an outlier with its oil and gas ban – other countries had done something similar. And energy companies still retained the right to develop existing gas fields further.

Woods argued the move away from fossil fuels would be done very carefully.

“We do need a transition plan, but it does not mean a continuation of the status quo,” she said.

“I am not prepared for New Zealand to reach a cliff....where we will not be able to use fossil fuels for the sake of our planet or financially.  We have got to have a way for people to transition away from that.”

Meanwhile, TOP's Hammond renewed her call for political certainty if the energy industry is to make any progress.

“What we don't need is the constant shuffling of investment rights, the barking at every passing car, the vanity projects, the meddling with the carbon price.”

She said New Zealand faced a choice.

“We could have a shortage (of electricity), we could have a crisis, or we could have some regulatory certainty and stability, in which case we would have a bright future ahead of us.”

More information on the main parties' election policies can be found here.