Pacific Institute of Resource Management
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14 June 2002

Ministry for environment


This submission is presented on behalf of the Pacific Institute of Resource Management. The Institute is an Incorporated Society concerned with environmental and social justice issues. It publishes the "Pacific Ecologist" journal.

The Institute is delighted to see tangible progress made toward increased use of renewable sources of energy as part of the response to global climate change. There are several matters expressed within the consultation document that we wish to comment upon and these are addressed paragraph by paragraph below following the order in which they arise in the consultation paper.

In his Foreword, the Minister of Energy cautions about pushing investment in renewable energy too fast and too soon. In our opinion the risks lie rather in investing too slow and too late. The only foreseeable factor that would deter such investment is continued global exploitation of fossil fuels without regard for the greenhouse gas emissions penalty. Even if the Kyoto Protocol fails in its design to compel reduction in emissions, it is difficult to imagine unbridled fossil fuel exploitation continuing very far into the 21st century. In a carbon-constrained world there is no longer a place for non-renewable energy production.

The Minister does not want to see a return to Government-sponsored energy supply development. It should be recognised however that the fact that NZ has the relatively high proportion of 29% of its electricity generated from renewables is the legacy of precisely this mode of development. The huge capital expense coupled with resource and property acquisition problems have been most readily met by central government action. Little has changed to affect this except the persistence of notions from the 1980's that there is no place for Government in any enterprise that may be commercially successful. It is almost inconceivable that a present-day NZ government would mandate energy supply development beyond projected needs or ahead of more cost-effective demand-side measures. This said, we note that the Governments Overall Energy Policy Objective concerns itself entirely with supply-side matters.

There is likely to be significant benefit from enhancing NZ's already strong clean and green image by emphasising our relatively high use of renewable energy in producing goods for sale overseas. To capitalise on this there should be early introduction of a Government operated or mandated certification programme for embodied renewable energy content and greenhouse gas abatements applied during manufacture.

The potential cost of renewables in terms of local environmental impacts is particularly severe for hydro-electricity projects. The most recent developments at Manapouri and the Clutha River have been extremely controversial and, although there has been a long hiatus in development, future projects are likely to be the targets of similar adverse opinion.

If anything, consciousness of the ecological and amenity value of natural waters is greater than when the aforementioned projects were underway. Where concerns are principally aesthetic, as for example in wind farm developments there is probably diminishing objection due to some familiarity with windmills and a realisation that the alternatives are generally worse.

The three guiding principles provide a good basis for progress however there are issues arising from them. The second principle's emphasis of uncertainty and risk may apply to matters such as the ability of the Kyoto Protocol to deliver a viable market for emissions trading, but as already mentioned, there is no realistic uncertainty about the advisability and even necessity of developing renewable energy sources. Although it is stated that NZ is inexperienced with policies to promote renewable energy we have in fact developed such resources in the past and this surely cannot have come out of a policy vacuum. Mention has already been made of the inappropriate supply-side emphasis of the Overall Energy Policy Objective. The fairness principle is strongly agreed with and especially the need to protect vulnerable sections of the community from detrimental cost increases. Nonetheless it must be recognised that part of the high standard of living enjoyed by most NZers has come at the environmental cost of increased atmospheric levels of greenhouse gases. We are in some measure being called to account for past emissions and it is not realistic to expect there to be no net costs given the size of the accumulated environmental debt.

The proposals for application of the renewable energy policy appear sound. The adaptability of NZers to new policies is proven. Effective partnerships involving the Government are important but should not distract attention from the fact that the Government is an established major participant in the energy industry and can use this position to "make the play." The proposal to regularly review policy is prudent and should extend to 180 degree change in direction if indicated by a major policy failure, regardless of any loss of face.

The aims of the programme are commendable. When referring to barriers that may limit the use of renewable energy sources the potential interference of electricity market rules is mentioned. It is absolutely critical that no such artificial barriers exist. If the structure of this market proves a hindrance to use of renewables it will be yet another example of its failure to deliver desirable outcomes. The accumulation of failures is now of such magnitude that a comprehensive review is indicated without any reservations about taking remedial action. The establishment of the market appears to have been flawed from the outset, particularly in the division and allocation of generation facilities so that logical switching from one energy source to another to minimise the burning of fossil fuels is no longer possible.

The use of government purchasing power to encourage investment in renewables is particularly encouraged.

The resource assessments part of the cross-sectoral programme raises some important questions regarding access to resources that many consider to be part of the Commons.

The proposed programme for the electricity sector is endorsed, especially the element that aims to remove barriers to access to the national grid for small-scale renewable energy. Such distributed generation has great potential to make a significant contribution to energy needs with minimal environmental impact. There are many examples of such generation as part of a long established "subculture." Tapping into this wealth of experience and developing a regulatory and purchasing framework that supports use of distributed generation has the potential to make a sizeable contribution to growth in the use of renewables.

The programme for process heat mentions that expansion of forestry processing will drive increased demand for process heat. This must be met by using biomass or geothermal heat. Technologies arising out of the use of wood wastes for heat production are one of the most promising for increasing our renewable energy base. As well as use on site at timber processing plants there are opportunities to supply heat to the local community for domestic space and water heating. The processing of woody biomass into a consistent product suitable for heat production in many applications is already technologically feasible and only requires the type of upscaling projected for solar water heating to make it desirable for domestic and commercial purposes. Woody biomass is one of the least expensive and highest capacity sources of renewable energy for heat generation and with further refinement may become a viable source of energy for electricity generation. The North Island plantation forests are close to the large concentrations of energy consumers. Gasification of wood is one of the oldest established gaseous fuel technologies and there is potential in this for use in heating and as a transport fuel. Use of the forthcoming large increase in timber production for biofuel as well as traditional forest products could provide a large boost to the economy. In short, we should burn the" wall of wood".

In the field of transport, as technological changes and shifts to renewables are likely to occur only in the longer term, structural issues become most important. It is important to encourage use of the most fuel-efficient modes of transport and to preserve the associated infrastructure. There are grave concerns in this regard over the fate of the NZ rail transport network which seems set on a course of removal of track and diminishing of services. An integrated railway system has been reduced to fragments and its complete dissolution seems probable if there is no intervention. The structure of many large commercial enterprises, for example supermarket chains, leads to single point production of commodities, distributed throughout the country by (predominantly) road transport. This practice leads to large energy consumption simply to deliver goods to the consumer - goods which could often be produced locally. Policies should be developed to reduce this wasteful practice and more generally to minimise transportation requirements. There is a fashion trend at present to large and fuel-inefficient vehicles, running contrary to technological changes that are increasing fuel economy. Increases in the cost of fuel as a consequence of imposition of emission charges may change this situation or there may be a shift due to increased public awareness of the environmental consequences of profligate fuel consumption.

The introduction of a target for renewables in transport is good but needs to be reinforced by specific incentives for biofuels.The target should be adjusted progressively upwards. With dairy whey and wood waste as potential inexpensive sources of biofuel, and with the greenhouse gas abatement bonus if livestock farms change to growing crops suitable for use as biofuel feedstock, there are significant arguments to promote biofuel useage.

It is curious that, in contrast, there will be a "strong focus" on hydrogen. Hydrogen is not an energy source but merely a mode of distribution and requires major changes in transport technologies to use it. Such technological development is occuring both here and overseas without active promotion, but it is still likely to be decades before there are significant numbers of hydrogen fuelled vehicles in use. It is preferable to put resources into cheap indigenous biofuels for which the technology already exists and is well proven.

The programme for solar hot water heating is one of the best elements of the entire renewables package. If initial progress is good ,the programme should be rapidly ramped up with mandatory requirements for SWH in new houses and a progressive retrofitting programme. There are many financial measures that could be taken to encourage retrofitting such as interest free loans repaid through power bills.

The investment projected to achieve the energy efficiency gains appears fairly small relative to, for example, the potential value of Kyoto Protocol credits. It therefore warrants increasing.

Dr Cliff Mason, Executive Member, on behalf of the Pacific Institute of Resource Management
PO Box 12125

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