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Government Should Rethink Electricity Model

Forest and Bird says that the Government should consider re-integrating the electricity generation system to improve environmental outcomes and the efficiency of energy production.

“The current system, which is an experiment, has been problematic from the start,” said Eric Pyle, Forest and Bird’s Conservation Manager. “We are concerned that the vagaries and instability of this system will have bad effects on the environment.”

“While some companies are taking a responsible approach, some need to do better,” Mr Pyle said. “We are concerned that under the current system market pressures will encourage companies to cut corners at the expense of the environment.”

Forest and Bird would like the Government to re-integrate the electricity system. “This market-based experiment is not working. It is time to reel it in and develop a more logical, rational and stable system,” said Mr Pyle. “Otherwise the consumers and the environment will suffer in the short and long term.”

Forest and Bird predicted that the split of ECNZ in 1995 would increase inefficiencies in power generation, create poor price signals for consumers to save electricity and undermine the Government's international obligation to reduce carbon dioxide emissions. “We said in 1995 that this electricity model was a bad idea and we have been proven right”, said Mr Pyle.

“The competitive model is not working well for social and environmental objectives,” said Mr Pyle. “Under current arrangements there seems to be a significant incentive on ECNZ siblings to “game” and maximise their profits – at the expense of the environment and electricity consumer. The end result will be an increase in greenhouse gas emissions and a lack of investment in more sustainable electricity supply and demand options”.

In Forest and Bird’s view an integrated system is likely to be more efficient than the current system. “The Government needs to think again and not repeat the mistakes of the past,” said Mr Pyle.

Ends


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