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

 

Housing: Affordability Drops 14%, Driven By Auckland Prices

Housing affordability across New Zealand fell 14 percent in the year ending November 2014, with Auckland’s lack of affordability set to reach levels it hit during the height of the global financial crisis, according to the latest Massey University Home Affordability Report More>>

ALSO:

The Dry: Fonterra Drops Forecast Milk Volumes By 3.3 Percent

Fonterra Cooperative Group, the worlds largest dairy exporter, reduced its milk volume forecast for the 2014-2015 season by 3.3 per cent due to the impact of dry weather on production in recent weeks. More>>

ALSO:

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news