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Market Distortions In NZ Energy Review

Press Release from the New Zealand Photovoltaic Association

IEA Ignores Distributed Generation And Market Distortions In NZ Energy Review

"The International Energy Agency (IEA), in their review of New Zealand's energy position, have entirely missed the point that more distributed generation is essential for a sustainable electricity system in New Zealand" said Dr Tony Bittar, Chairman of the NZ Photovoltaic Association. "Solar electricity (photovoltaics or PVs), along with other renewable sources such as solar water heating, windpower and bioenergy will be essential components in the future sustainable power supply system."

By 2013 the network companies will no longer have a requirement to maintain rural lines. Distributed generation solutions in these locations will be needed to maintain the viability and health of our rural communities.

The IEA have also got it wrong on power prices. Their contention that market reforms have produced lower prices for consumers is clearly wrong.

"I am very surprised that this IEA report appears to undermine the Government's visionary energy policy statement which demonstrates a good understanding of the need to minimise greenhouse gas emissions, and grow the use of sustainable energy technologies in our electricity system" said Dr Bittar.

The IEA applauds the use of equitable market mechanisms, yet fails to comment negatively on the imbalance in market mechanisms caused the huge tax subsidies provided for fossil fuel exploration and development in New Zealand. New Zealand taxpayers pay the fossil fuel industry $182 in taxation relief for every $100 they spend on exploration in New Zealand. This appears to be the highest fossil fuel mining subsidy in the world. [Tax Review Issues Paper Table 4.6]

"If the renewable energy industry had a minus 182% taxation relief support package, then other support mechanisms would not be needed. However, it is clear this fossil fuel subsidy is not going to be withdrawn. So another support mechanism within the National Energy Efficiency & Conservation Strategy is essential if the huge potential for more use of solar electricity and other renewable energy sources is to be realised" said Dr Bittar.

Dr Bittar noted two small recommendations in the IEA report that may help PVs. The report asks the Government to 'consider how small-scale renewable sources of energy can efficiently participate in the competitive electricity market'. It also suggests that we 'encourage small-scale renewable energy generators to address problems of reliability and to improve overall operational efficiency'. Dr Bittar commented that these recommendations seemed to be a backhander aimed at an electricity industry that is not happy with the sustainability requirements in Pete Hodgson's energy policy statement.

Dr Bittar said that it was illogical and unbalanced that the IEA report on Australia recommend expanding the use of the Australian Mandatory Renewable Energy Target incentive, (which aims to increase renewable generation by 2%), but not make a similar recommendation for New Zealand.

ENDS

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