What future for the Household Energy Fund?

14 October 2008

What future for the Household Energy Fund?

Householders want details from all parties on whether and how they would fund home energy efficiency. Labour promised this as part of emissions trading policy early last year, and has embodied the Home Energy Fund in legislation. Now the National Party has rejected the Fund, which means they will have to repeal the legislation.

How big a deal is the $1 billion Home Energy Fund? Less than a single year’s Crown revenue from taxes and dividends from the electricity sector. (See note 1)

Labour stated today the Home Energy Fund would come from windfall profits from emissions trading. Are the profits enough to fund the scheme? Yes - it would take less than 1/3 of the Crown’s windfall take from domestic power bills alone – and even less, if carbon is priced at today’s prices. (See note 2)

So by both measures – the likely new windfall profits from emissions pricing, and the revenues to the Crown that come from electricity today – the Home Energy Fund is modest indeed. Would National raid this Fund for some other purpose?

Other parties must declare their position on home energy efficiency. In a period of likely prolonged world recession, would parties prefer to invest in Think Big power generation projects, funded by debt? Are they prepared to rely on further gas exploration to find the fuel needed for new base-load power stations – or even, to import liquefied natural gas at huge expense and with huge safety concerns?

Or would they invest in preventing totally unnecessary energy waste? Precious electricity barely stops to wave good-bye as it leaks through New Zealand houses’ roofs and windows.

We would employ New Zealanders to plug those leaks, and the benefits are gained from day one, in healthier houses and reduced power bills. Where are the priorities of each party, in household energy efficiency?

ENDS

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