Infrastructure Strategy overlooks energy fundamentals
Tuesday 3 May 2022, 1:54AM
By Energy Resources Aotearoa
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Energy Resources Aotearoa has cautiously welcomed the release of the New Zealand Infrastructure Strategy but says that it overlooks the important role that the Emissions Trading Scheme and natural gas will play through and beyond the transition to a lower emissions world.
"If you want affordable energy that will electrify and decarbonise the economy, you need abundant and affordable natural gas. It is the ideal partner for renewables," says Energy Resources Aotearoa Chief Executive John Carnegie.
"The strategy highlights that New Zealand has abundant potential sources of renewable energy but these will only be realised if they are economic to produce and use."
"The report is silent on who would pay for these energy sources to be developed or how our major exporters will retain their international competitiveness when we are not using the cheapest low carbon sources of energy. This is why we strongly support the Commission’s commitment to a least-cost approach."
"New Zealand’s world-leading Emissions Trading Scheme sets a cap on emissions. If fuel sources are uneconomic after paying for their emissions, they simply will not be used."
"Improved regulatory and decision-making processes are critical but as we have already seen, regulatory and planning frameworks that discourage or favour particular sources of energy stifle investment and lead to perverse outcomes."
"The result of planners rather than consumers picking energy sources will be higher prices and reduced energy security for consumers," says Carnegie.
Energy Resources Aotearoa agrees with the New Zealand Infrastructure Commission that the country needs to maintain our skilled oil and gas workers as we transition to lower carbon alternatives.
"Preservation of this highly skilled workforce will be key for New Zealand’s gradual transition to lower carbon energy sources. Regulatory uncertainty that jeopardises this sector and its workforce will undoubtedly make New Zealand’s net-zero goals harder to achieve."