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Hodgson: Energy Research Institute Symposium

Hon Pete Hodgson
Minister for Economic Development


26 June 2008
Embargoed to 3.45 pm Speech
Energy, Transport and Sustainability Symposium

Speech to the National Energy Research Institute Symposium, Rutherford House, Wellington

Good afternoon everyone.

New Zealand has an enormous challenge ahead of us to make our transport system sustainable.

It will take serious and concerted collaboration across sectors and across research disciplines to make this shift.

Symposiums like this one are valuable in bringing people from a variety of disciplines and sectors together to debate the difficult and complex challenges facing us in developing a more sustainable, low carbon transport system.

Accordingly I would like to thank the National Energy Research Institute – NERI – and the Institute of Policy Studies – for creating this symposium. Thank you Stephen and Jonathan.


Today I want to remind you of the direction this government has set for a low emissions transport future.

I also want to discuss the part we see that innovation, research and development need to play.

Finally I want to talk about the government’s role, and the opportunities opening up for research and innovation to contribute to developing a low carbon transport system.


Energy research – history

Energy research has run hot and cold.

It has taken a back seat ever since the heat went off the oil shocks of the 1970s and resulting “think big” projects that came out of that.

Oil prices dropped again, CNG and LPG wasn’t as competitive, and the focus in transport research was more on safety and higher performance and accommodating growth in car use, and then increasingly, how to tackle growing congestion as we used our cars more and more.

Recently we have realised that energy research in general has been fragmented, and has suffered from a lack of focus and lack of coordination.

Now it’s energy research’s time in the sun again.


NERI

The formation of the National Energy Research Institute (NERI) is therefore very timely.

I have been impressed with NERI’s early results in creating a portal for all stakeholders to engage with each other in energy research and education.

NERI has brought together the universities and the Crown Research Institutes working on energy research and education.

It has brought together researchers and practitioners, in several conferences like this one. It is brokering research partnerships. Through its database, conferences, and other activities, it is enabling everyone to communicate better with each other and to collaborate.

Thank you, Steve, Gerry, Pip and your team .I understand the organisation will be one year old next week on the first of July. I commend NERI to everyone here and look forward to seeing more fruitful research partnerships and educational opportunities result through your efforts.


Direction set by NZ Energy Strategy

In releasing the NZ Energy Strategy last October, the government set a clear vision for the use and supply of energy, including transport energy. It is to be “a reliable and resilient system, delivering New Zealand sustainable, low emissions energy services”.

The Energy Strategy is the government’s response to climate change for the energy sector, including for transport energy. Transport emissions represent around half of emissions from the energy sector, and have been growing steadily.

They represent around 19 percent of New Zealand’s overall carbon emissions. In 2006 our transport emissions were 64 percent above 1990 levels. Emissions from road transport represent about 89 percent of this total.

Another key concern outlined in the Energy Strategy is that of fuel supply security.

New Zealand relies on imported oil for around half of all our energy needs, including almost all our transport energy needs. The pressure on global oil resources is expected to increase strongly. New Zealand’s import bill also increases when oil prices rise. Actions that lessen our dependence on imported oil help to increase our supply security and to shield us from international events.


The Energy Strategy sets an ambitious goal: to halve domestic transport emissions per capita by 2040, relative to 2007 levels.

This is a reversal of the trend of the past few decades. Clearly the government is not just talking about making a few efficiency gains. Instead we are signalling that significant change needs to occur at all levels. It’s a call for innovation. It’s a call for collaboration. That’s why I’m so pleased to see you all here today.

The government also states in the Energy Strategy that it wants New Zealand to be one of the first countries to widely deploy electric vehicles. Those vehicles will draw their power from an electricity network that the government intends to be sourced primarily from renewable sources.


We’re not picking winners

We have not picked winners in the Energy Strategy.

We leave the door open to opportunities. We don’t know exactly where transport fuel emissions reductions will come from, but it is likely they will come from many sources.

Some reductions will come from a switch to electric vehicles; some from use of biofuels. There will be fuel efficiency gains, vehicle efficiency gains.

There will be changes to the shape of our urban areas to encourage walking and cycling, and there will be far more extensive and effective public transport networks.

There will be more use of information and communications technologies to improve access and improve transport network and supply chain efficiencies.

And, importantly, people will change their travel behaviour.

These shifts won’t happen by magic.

As a system, transport has a large degree of inertia, both in the physical infrastructure we have invested in as a society and as individuals, and also in our travel expectations and habits.

Transport is a system that juggles many demands, including the demand for greater mobility and accessibility while trying to address safety and environmental concerns and support economic development.

The system clicks together like a jigsaw, each part carefully crafted over time to fit with its neighbour.

Therefore, in shifting to sustainability, we need to work on making shifts on many different levels and parts of the puzzle at the same time. The shifts have to be appealing to people. And we have to make the shifts while keeping the whole system running – we can’t close it down for a week.

It’s no small order.


What this direction means

I’ve been saying “we” because this target of halving per capita transport emissions is a target for everyone.

It’s a clear signal to the transport industry – from freight forwarders to public transport operators. It’s a clear signal to every car driver.

And it’s a particularly strong message to the research sector, and to those who are in a position to develop innovation in aspects of transport systems.

The government’s stated direction towards a sustainable transport system is a compelling case for more focus and effort to go into energy research and innovation.

In the May Budget, I was pleased to announce $32.5 million in additional funding over the next four years for energy research above and beyond current levels.

This funding will support research across the range of renewable energy opportunities for New Zealand.

It will encompass energy supply, including support for more biofuels projects, energy demand and energy infrastructure. Some of the funding will go specifically into providing ongoing funding for the new Low Carbon Energy Technologies Fund, which was set up under the Energy Strategy.

Research and innovation needs to be leading the change.

Through research we need to develop unique solutions for New Zealand’s particular geographic, cultural and economic situation.

We need to keep in touch with international developments, and adapt technologies for New Zealand. We need accurate science and technology information to inform transport energy decisions.
Research and policy communities need to engage in debates to ensure policy directions are supported by the best available science.

With transport the solutions are as multi-faceted as the system itself. The research and innovation opportunities are equally as broad. Research into new fuels the vehicle technologies is important.

Equally important is research into institutional and market arrangements that will support the introduction of new fuels.

At the same time, we need to know more about sustainable urban design and how to integrate it with transport infrastructure, and how to identify the tipping points for influencing travel behaviour.

The government wants to see results. We want to see theories turned into reality.

We want cross-disciplinary collaboration: Engineers working with economists. Marketers teaming up with geographers and IT specialists.

We also want cross-sector collaboration. We need research institutes and policy bodies, including local government agencies and government departments, to jointly address the challenge of creating a sustainable transport system in New Zealand.


Government’s role

The government has set out what we see as our role in both the Energy Strategy and in the NZ Energy Efficiency and Conservation Strategy, its companion action plan.

We are using a combination of legislation, standards, funding, partnerships and setting sector targets to steer and encourage various elements of the transport system to reduce emissions.

I’m not going to list every initiative we have underway, but I’ll give you some examples and the research opportunities they open up.


We are working on a mandatory biofuel sales obligation.

This will require oil companies to source a small percentage of their fuel from biofuels. Ensuring the biofuels are sustainably sourced will be a part of this initiative. This sales obligation aims to provide an incentive for oil companies and others to invest in research and development of locally produced biofuels.

My colleague the Hon Annette King has recently released Sea Change, the domestic sea freight strategy.

This strategy aims to double the volume of local freight carried by sea from 15 percent to 30 percent of all local freight movements, by 2030.

This is in recognition that freighting by sea will relieve the congestion on land and can result in lower carbon emissions compared to land-based alternatives. Improving inter-modal supply chain logistics is one key challenge in attracting freight to coastal shipping.

Research is needed to support this shift.

Signalling that New Zealand wants to be a pioneer in the deployment of electric vehicles raises all kinds of research questions and potential for innovation.

We don’t expect New Zealand to do it all alone.

It highlights the strong international research and industry relationships that we need to have to become a chosen country for early deployment of internationally produced technology that everyone wants.

The R&D challenges range from breakthroughs in battery technology and vehicle design, to electricity systems, market systems and infrastructure design to integrate electric transport into the electricity system in ways that are most beneficial.

To spearhead investigation of new vehicle technologies, the Ministry of Transport has set up a cross-sector expert advisory group, the Vehicle Expert Renewables Group.

The first round of the Low Carbon Energy Technologies Fund administered by the Foundation of Research, Science and Technology has had a focus on supporting research and development of low carbon transport fuels.

We can only have a low carbon, sustainable transport future if New Zealand embraces innovation and change in the transport system.

The government has set a clear direction towards transport energy sustainability. We’re setting the wheels of change in motion. But we need leaders in research and leaders in local government and in industry to contribute to make transport sustainability a reality.

Transport is complex. I don’t expect change to happen overnight, but I advise you all to take heart and keep persevering – like any system change, it takes a while to get the momentum rolling.

I hope this symposium leads to new connections and results that we will see on the street sometime soon.


ENDS

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