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Key actions in the New Zealand Energy Strategy

Key actions in the New Zealand Energy Strategy
The following is a summary of the key actions the government will implement or is already implementing to give effect to the objectives set out in the New Zealand Energy Strategy.

1. Resilient, low carbon transport (Chapter 7, page 44)
To reduce our greenhouse gas emissions overall, New Zealand must substantially cut emissions from transport. The government has set a target of halving domestic transport emissions per capita by 2040, and for New Zealand to be one of the first countries to widely deploy electric vehicles. This will be achieved by using more efficient and lower-impact transport modes, using alternative renewable fuels, increasing vehicle fleet efficiency, and reducing kilometres travelled through smarter planning.
Key initiatives include:
• Updating the New Zealand Transport Strategy in 2008
• Developing policies to encourage greater provision of public transport, cycling and walking
• Developing a New Zealand Domestic Sea Freight Strategy
• Developing average fuel economy standards for light vehicles at point of import
• Establishing an expert advisory group to look at future vehicle technologies, such as biofuels and electric cars
• Introducing the Biofuels Sales Obligation on 1 April 2008.

2. Security of electricity supply (Chapter 8, page 59)
Maintaining security of energy supply at competitive prices is essential for a modern economy. Energy efficiency, demand-side management and an increased diversity of electricity supply all contribute to high levels of security. Long term, security of supply depends on competitive markets, cost-effective demand-side response, greater use of renewables, and a stronger national grid.
Key initiatives include:
• The Electricity Commission’s review of its reserve energy policy, to see whether any additional measures are required
• Developing national guidance under the Resource Management Act on electricity transmission
• Introducing amendments to the Electricity Industry Reform Amendment to relax some conditions around investment by lines companies
• Promulgation of regulations for distributed generation
• Developing gas wholesale and transmission market arrangements to make it easier to establish more flexible and secure gas supply arrangements.

3. Low emissions power and heat (Chapter 9, page 71)
The government has set a target for 90 percent of our electricity to come from renewable sources by 2025. Coupled with energy efficiency measures, this would see New Zealand cut its greenhouse gas emissions from electricity generation back to 1990 levels.
Emissions pricing forms the core policy framework to support achievement of the target. This will be complemented by other measures, such as introduction of tools available under the Resource Management Act. The details of the government’s programmes for encouraging the use of renewable energy are set of in the New Zealand Energy Efficiency and Conservation Strategy.
Key initiatives include:
• The in-principle decision to introduce an emissions trading scheme
• Providing a clear message to state-owned electricity generators on the government’s view that there should not be a need for new baseload fossil fuel generation for the next ten years
• Consideration of regulatory options under the Electricity Act 1992 for limiting new baseload fossil fuel generation over the next ten years
• Development of a national policy statement for renewable energy in 2008
• Providing greater guidance on “call-in” under the Resource Management Act.

4. Using energy more efficiently (Chapter 10, page 82)
Historically New Zealand hasn’t been particularly efficient in the way it uses energy, and the government believes everyone should make energy savings in areas where the savings are cheaper in the long run than the financial and environmental costs of supplying more energy. Energy efficiency measures can reduce energy costs and greenhouse gases, as well as provide other benefits to people, communities and the economy.
The New Zealand Energy Efficiency and Conservation Strategy is the dedicated and detailed action plan for whole-of-system energy efficiency. Energy efficiency initiatives are focused on reducing demand for stationary energy, which includes all forms and uses of energy services other than transport and mobility. The government’s role is in ensuring pricing and other incentives encourage energy efficient choices, and in addressing barriers to energy efficiency.

5. Sustainable energy technologies and innovation (Chapter 11, page 90)
Affordable, energy efficient, low emissions technologies will be critical to improving New Zealand’s security of supply and reducing greenhouse gas emissions and ongoing technological developments will be fundamental to decarbonising the energy system over time. The government’s focus will be on supporting initiatives to build capacity and link participants from the research community, industry, and central and local government, to bring forward adoption of low carbon sustainable energy technologies.
Key initiatives include:
• The government has introduced tax credits for R&D expenditure
• The contestable fund of $8 million over four years for the deployment of marine generation devices in New Zealand, which will be open for applications by November 2007
• Establishment of a contestable fund of $12 million over three years to support new low carbon energy technologies.

6. Affordability and wellbeing (Chapter 12, page 98)
Historically New Zealand has enjoyed cheap and abundant energy. In recent years electricity prices have risen in response to growing demand, and the depletion of the Maui-gas field. Oil prices have also risen sharply, impacting on the transport sector particularly. The government doesn’t set prices for energy, but it can ensure that the market remains competitive to protect all customers.
Key initiatives include:
• Amending regulations for the low fixed tariff option for domestic electricity consumers to take into account regional climate variations that impact on heating costs
• Providing assistance for households to adjust to higher electricity prices arising from the introduction of emissions trading. The nature of that assistance is under consideration
• Supporting the provision of high-quality information to householders (including www.consumer.org.nz/powerswitch; www.smarterhomes.org.nz; www.energywise.org.nz; www.fuelsaver.govt.nz)

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