Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Solid Energy: ETS policies and investments require rethink

Solid Energy: Poor government ETS policies and unwise fossil fuel investments require rethink
 
Solid Energy has done the right thing to abandon plans to dig and process lignite, but suggestions that the coal market will return to normal is unlikely and a re-think is needed, says the Environment and Conservation Organisations of NZ (ECO).
 
Catherine Wallace, a senior lecturer in environmental and resource economics, and co-chair of ECO said “Assumptions by some commentators that the coal market will return to its normal cyclical price patterns need to be tempered by three fundamental changes in the market.”
 
“Long term, the coal energy market is changing.  Consumer awareness of coal’s damage to the climate, increased supplies of fracked gas, and renewable alternatives are changing the dynamics of the coal price.”
 
“The slow-down of the world economy and the Chinese economy has dampened the market for metallurgical coal, and that may recover, but the coal for energy market is grappling with the impact of fracked gas elsewhere,” said Wallace.
 
“Solid Energy management made a lot of very optimistic assumptions, embarked on costly mis-directed fossil fuel investments, but markets have changed too.
 
Cath Wallace said the lignite plans were amongst the worst of their ideas, so it is good for Solid Energy that they have backed out of the lignite plans, and even better for the climate.
 
“In the long run there are more jobs from farming that land than from mining it, so it is a win for the Southland community as well.”
 
Solid Energy’s investments in renewable energy were small compared to the disastrous lignite and Spring Creek investments, and in many ways the investment in renewable were a good strategy.
 
“The problem is that the government shot itself and the company in the foot by killing off the biofuels market and then refusing to allow the Emissions Trading System to send accurate signals about the climate cost of fossil fuels,” said Wallace.
 
“By not allowing the carbon price to take effect, the government has killed off many renewable initiatives, and thus removed the opportunities for a gradual transition to low-carbon jobs and energy sources such as wood pellets.”
 
“As markets world-wide increasingly regard coal as unacceptably damaging to the climate, New Zealand has been left with stranded lignite and other coal assets, and severely damaged prospects for transition to low carbon alternatives due to poor ETS policies.”
 
“The leadership of Solid Energy misjudged both the market and the government, made some mistakes, but many of the problems were the result of poor government decisions and oversight.”

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>

ALSO:

Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>

ALSO:

Earlier:

Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>

ALSO:

'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>

ALSO:

Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news