Energy Strategy disappoints

Thursday, 11th October 2007 For Immediate release

Media release by the Major Electricity Users’ Group (MEUG)

Energy Strategy disappoints

“The final New Zealand Energy Strategy released today is disappointing,” said Ralph Matthes, Executive Director of Major Electricity Users’ Group (MEUG).

“The final Energy Strategy is a subset of climate change policies – that’s a mistake. The energy strategy should have been a subset of a broader objective to enhance the wealth of New Zealanders, ie to increase GDP per head of population ahead of other OECD countries.

“The fixation on meeting an arbitrary renewables generation target of 90% by 2025 by banning new thermal investment is the most draconian intervention in the electricity market by any government since the electricity market started in 1996.

“A better outcome would have been a strategy that recognised the benefit of the market deciding the best mix of energy and generation sources to achieve lowest cost supply to meet the security of supply desired by end consumers.

“Banning new base load thermal power stations is a short sighted strategy because it will increase our reliance on wind and hydro generation both of which can be notoriously variable. You can reduce that risk by over-building generation and transmission – but that’s very costly. Therefore directing the economy to have a high renewables generation path will be both more costly and could put security of supply at risk compared to a more balanced portfolio approach for new generation.

“To put this proposed policy into perspective, as far as we are aware no other OECD country in the world bans new base load thermal power stations being built” concluded Mr Matthes.

ENDS

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