A new open letter is calling on the Government to abandon plans to subsidise an LNG import terminal. A broad range of letter signatories argues the government injecting capital into a LNG terminal ‘would waste hundreds of millions of taxpayers money, lock customers into a more expensive energy future, increase exposure to international price shocks and make it increasingly challenging to meet carbon targets.’

“An LNG terminal could produce power at around $300 per MWh — double the cost of new hedged renewables already on our grid. Energy companies have already reviewed the numbers and walked away from the terminal as too risky and too expensive to build themselves. Now the fossil industry has pressured the cabinet into bankrolling it with public money,” says 350 Aotearoa co-director Alva Feldmeier.

“This open letter from such a diverse array of actors is clear: A clean energy future is ours for the taking - and anyone who says differently is lining their pockets by poisoning our lungs and driving up our power bills. Unions, environmentalists and energy hardship advocates are clear - the government must invest in stable, affordable energy, not fossil fuel speculation,” says Feldmeier.

The letter comes after officials found that “If LNG remains at today’s prices and is used often for generation, then it could cause an uplift in electricity price.” LNG typically comes with ‘take-or-pay’ contracts tied to global fossil fuel markets, leaving New Zealand exposed to international price shocks.

Bill Bradford, President of Workers First Union says ‘Our privatised electricity infrastructure is already a disaster, plagued by profiteering and underinvestment. Public money should be used to build public energy solutions. With this LNG proposal, the coalition wants to sink us deeper into volatile and expensive electricity markets – which threaten our manufacturing industry and hike up the cost of living for workers.’

Mike Casey, CEO of Rewiring Aotearoa says "Investment in an LNG terminal locks us into a solution that will increase energy costs, reduce fuel security and create unnecessary emissions. There are other short term solutions to provide electricity in dry winters that cost a fraction of the upfront cost of relying on LNG and don’t lock us into another volatile international commodity. There are also other technologies like solar and batteries that we should be investing in instead - both large scale and at the household, farm and business level. These are proven to reduce costs, could keep water in our hydro lakes for when we need it most, and reduce the need for expensive upgrades to our poles and wires.

We need to electrify our economy - but we can’t create cheap electricity with expensive fuel.”

Luke Blincoe, CEO of Supa Energy says “New Zealand doesn’t need an expensive LNG terminal to keep the lights on. This locks in more dirty imported energy when we have the people and resources to instead make clean energy at home. Importing foreign fossil fuels can only increase costs by surrendering energy sovereignty and exposing New Zealand to global gas commodity prices at a time of extreme geopolitical volatility. Every dollar spent on LNG is a dollar not spent on renewables, demand flexibility, or decentralised energy solutions. These are already delivering lower-cost energy for households and businesses, and the solution here is to clear the path for more.”

Andrew Eagles, CEO of the NZ Green Building Council says “LNG will lead to higher prices and have us dependent on international fossil fuel prices. We encourage Government to properly consider all options available. Our buildings are on track to use 26% of all gas by 2030. We must take steps to free gas up from buildings and homes – as other places around the world are doing. This will help keep jobs and industry doing business in NZ and help save Kiwi households hundreds of millions of dollars per year.”

The open letter estimates that a mass rollout of hot water and home heat pumps could save households $1.5 billion every year and free up gas supply for those who need it most. It also calls for solutions including incentives for community solar, government-backed power purchase agreements, and hedged renewable electricity supply contracts to industrial users.

Kate Day, Co-Director of Common Grace Aotearoa, a faith-based organisation that leads advocacy on energy hardship said: “When households are struggling to pay ever increasing power bills, it makes no sense to be subsidising the most expensive, polluting form of power – imported LNG. If the goal is to achieve affordable, reliable power for households then the government would be supporting uptake of solar and battery technology and heat pump rollouts. If it was about supporting industry to avoid more job losses, then they’d be helping future-proof businesses by decarbonising and reducing reliance on our dwindling supplies of gas.”

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