Support for the Government’s energy and climate change strategies is waning, with a group of industry heavy-hitters warning some of the targets are potentially “unworkable and chaotic”.
In an open letter to Prime Minister Helen Clark, a group of business interests, including the country’s biggest electricity users, state-owned enterprise Solid Energy, and the combined chambers of commerce, say the Government is proceeding too far, too fast.
The Government has announced it plans to introduce a carbon trading scheme, wants emissions from the transport sector halved by 2040, and 90 per cent of all electricity produced from renewable energy sources by 2025.
It has also slapped a ban on state generators building new thermal power stations during the next 10 years, and is threatening to change the Electricity Act to stop companies such as Contact building them.
Energy Minister David Parker has said there is sufficient generation becoming available from geothermal and wind farms, and that the price of power will not increase as a result of the Government’s move.
But some energy analysts say he is wrong, and yesterday a major group of businesses added its voice to the concerns.
The industry group comprises Federated Farmers, the Greenhouse Policy Coalition (which includes Comalco, NZ Steel, Solid Energy, and pulp and paper companies), the Business Roundtable, the Road Transport Forum, the Wood Processors Association, Major Electricity Users Group, Business NZ, New Zealand Chambers of Commerce, and petroleum drilling companies.
The group says the Government’s proposed Energy Trading Scheme (ETS) is being rushed through Parliament without adequate consultation with the industry.
It says the Government is refusing to release any economic analysis to back its claims the new system will have a negligible impact on economic growth.
“The scheme being proposed goes well beyond any other in the world.
The economic impacts on New Zealand have the potential to be very costly for very little environmental gain,” the group’s letter says.
It also says the Government’s new energy strategy, which bans the building of new thermal power stations in the next 10 years, is “draconian” and will lead to higher power prices, lower investment, and a security of supply risk.
“There is the risk that it will prove unworkable and chaotic, be economically and politically unsustainable, and hence fail to provide any certainty for business,” the letter says.
The opposition is a blow to Government, which had earlier succeeded in winning widespread support for its climate change plans.
Parker was attacked in Parliament yesterday, with conservation spokesman Nick Smith claiming the Government “doesn’t have a bolter’s hope” of achieving its target of 90 per cent renewable power by 2025.
Smith also said the Department of Conservation had sat on an application for a concession on a 0.7ha piece of land by Bay of Plenty Energy, who wanted to build a hydro scheme, for more than two years.
Energy spokesman Gerry Brownlee said claims in the Government’s energy strategy that the country’s power needs would fall from an additional 2 per cent a year to 1.5 per cent a year were difficult to believe.
But Parker said the Government was committed to renewable energy and he remained convinced there was sufficient wind and geothermal power.
“New Zealand has abundant sources of affordable renewables that we ought to develop.”
By Colin Espiner
17 October 2007
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