ETS uncertainty points to serious energy problems

The confusion and uncertainty created by National’s climate change policy is putting New Zealand’s energy security at risk, Labour’s Energy spokesman Charles Chauvel said today.

This was the messages from power companies to MPs in Wellington yesterday. Contact Energy, Genesis, Meridian and Vector attended a special select committee looking at the emissions trading scheme. Under the current ETS these companies will enter the scheme on 1 January next year

“The Committee heard that there was real difficulty for these businesses in not knowing whether the ETS would apply to electricity generation from 1 January 2010. Not only was business planning impossible, but they were unsure whether to buy credits from the forestry sector, which has been part of the scheme since its creation,” Charles Chauvel said.

“Decisions over whether to invest in new wind farms and geothermal plants also risk being put on hold because of uncertainty over the price of renewable electricity under an ETS.

“This will pressure generators to consider building more gas-fired power stations and importing LNG or CNG to power them.

“The Government urgently needs to confirm that looming deadlines in the ETS will be honoured, if New Zealand is not to face unintended and potentially disastrous long-term consequences,” Charles Chauvel said.

“New Zealand has never had to rely on imported gas to power electricity generation and it would be ludicrous if National’s confusion over its climate change policy brought that outcome about. The only worse scenario – but one that is possible – is that no new generation capacity gets built at all until the fate of the ETS is known”, Charles Chauvel said.

ENDS

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