Bold 2020 target comes with high price

Hon Dr Nick Smith
Minister for Climate Change Issues
4 August 2009 Media Statement
Bold 2020 target comes with high price

Achieving 100% renewable electricity by 2020 would cost $17.5 billion, put power prices up by 30% and require the equivalent of seven Clyde Dams being built, Climate Change Minister Nick Smith says.

Dr Smith was responding to claims by the Sign On -40% by 2020 campaigners who have stated that “100 per cent renewable electricity supply is easily achievable by 2020”. The Minister tabled the analysis by the Ministry of Economic Development in Parliament in response to questions from the Green Party promoting the -40% target.

”It would first require writing off $4.5 billion of thermal generation assets It would also require $11 billion for the replacement capacity of 2500 MW and an additional $2 billion for additional renewable peaking stations to ensure security of supply in a dry year.

“This amounts to a total capital cost of $17.5 billion, excluding the additional transmission investment that would be required, and would lead to a 30% power price increase for all consumers.

“To achieve 100% renewables we would need to build a total of 3123MW to maintain security of supply – the equivalent of seven Clyde Dams within a decade.

“I have also seen proposals from those campaigning for a 40% reduction in emissions by 2020 who say that agricultural emissions can be reduced dramatically through adopting a ‘Smart Farming’ approach. These methods entail a one-third reduction in stock intensity which would reduce emissions accordingly.

“However, the consequences for New Zealanders of cutting by a third our stock number of sheep, cattle and deer would cost 47,000 jobs, reduce our export receipts by $6 billion and would significantly reduce the living standards of all New Zealanders.

“Such policy options for agriculture are not being considered. Our efforts are going into investing in technologies that will reduce emissions while maintaining farming returns.

“It is misleading for those advocating bold targets to say that 100% renewables and big cuts to agriculture emissions can be easily made. We need an ambitious but achievable goal for 2020 that balances the environmental risks of climate change with the economic impacts on New Zealand of reducing emissions.”

ENDS