The Government is set to unveil measures making it easier to build wind farms and less attractive to build new fossil-fuelled electricity plants in its draft national energy strategy today.
In the first big tranche of Government moves on climate change, the draft energy strategy will also outline a potential greenhouse gas emissions trading regime for the electricity sector – a price-based measure the Beehive appears to favour over a carbon tax.
The much-anticipated strategy effectively spells out the Government’s long-term vision for the energy sector.
While the agriculture sector creates half of the country’s greenhouse gas emissions, the energy sector’s emissions have been growing rapidly.
Most of the increase in emissions has come from transport and electricity generation.
But power stations fired by coal, gas or oil are set to become less viable to build.
Renewable wind, hydro and geothermal generation will be made more attractive to invest in.
Measures to curb transport emissions have largely been revealed already – including mandatory labelling of car efficiency.
The Government has stepped up its focus on climate change since Prime Minister Helen Clark made the issue a key plank of her address to Labour’s annual conference in October.
She called for New Zealand to become “carbon neutral” – a target she has since said was aspirational.
But there is little doubt that the Government wants to move aggressively to fill the vacuum in policy that has existed since it abandoned its planned carbon tax shortly after last year’s election.
With National adopting a greener tinge and acceptance of climate change on the increase, the Government knows its measures will be difficult to oppose.
The carbon tax it previously proposed ran into public and political opposition. Since it was scrapped climate change policy has been uncertain, which business interests have cited as a reason to delay investment.
Policy is likely to become clearer before Christmas, with the energy strategy document being followed next Monday by a sustainable land use paper, which will tackle agricultural emissions.
There is likely to be another transport-related announcement in coming days, lifting targets for biofuels.
A new Energy Efficiency and Conservation Strategy will also be released on Thursday.
The Beehive has already indicated to industry what to expect – although detail is keenly awaited.
Last week Climate Change Issues Minister David Parker and Finance Minister Michael Cullen made it clear in Parliament that after the gas-fired station in Huntly was completed, most new electricity generation would be renewable.
“The strategy will set us on a path that will enable us sustainably to reduce our total carbon dioxide emissions, including transport emissions, from energy for the first time in our history,” Mr Parker said.
His comments were in response to an attack from National, which said official figures showed that after seven years of a Labour-led Government the proportion of electricity generated by renewable sources was as low as it had been since 1961.
Mr Parker said the proportion varied according to how much rain fell, and there had been some dry years.
A major talking point of today’s energy strategy will be what price-based options the Government presents to reduce emissions.
It is likely that the previously abandoned carbon tax will be mentioned, alongside the option of an emissions trading regime.
But while the document is likely to treat the choice between the two delicately, the Government has been discussing emissions trading favourably and appears to favour that path.
Emissions trading – which would start in the electricity sector – limits the right to emit greenhouse gases and sets up markets in those rights.
Detail is important – in particular, the level the emissions cap will be set at, and how the permits will be handed out.
Mr Parker will travel around the main centres in coming days to brief electricity representatives, business groups, electricity users, and car sector interests about the strategy.
The strategy will be open for public consultation until the end of March next year.
By Paula Oliver