Ban on new gas fired power penalizes Auckland

Banning the building of new gas fired electricity generation plants for 10 years would likely lead to power shortages in the Auckland region, rolling brown outs, and restrict the city's prospects for growth, the Employers & Manufacturers Association (Northern) says.

The Climate Change (Emissions Trading and Renewable Preference) Bill setting up an emissions trading scheme also legislates a bias for renewable electricity generation and includes an amendment to the Electricity Act banning further fossil fuel plant development.

"The Bill is a further negative signal to investment," said Bruce Goldsworthy, EMA's acting chief executive.

"It will limit growth particularly in the Auckland region.

"It will load more demand from the prescribed renewable resources onto the power transmission grid going into Auckland, since these renewables handy to the city are scarce.

"But the power transmission system into Auckland is already stretched to capacity.

"We are advised there is only a five per cent margin available during peak demand, and its just through good luck Auckland hasn't had power brown outs already.

"We were counting on the gas fired generation plant planned for Rodney to address this, but the Bill would ban that option.

"While the Bill allows exemptions when security of supply is at risk, when or how any these exemptions could be triggered, or if they could be actioned in time to avert a crisis, is totally unclear.

"New power demand in Auckland is growing by 60 MW a year, similar to total power demand of a city the size of Wanganui.

"While business supports sensible, urgent action to mitigate climate change, overriding the emissions trading regime that the same Bill seeks to establish, makes no sense.

"With this Bill the government's emissions trading market is being introduced with a ready made distortion, the restrictions over using gas for power generation.

"We need all electricity generation options available to maintain our business growth and the communities our businesses support.

"If more gas is discovered and its use for generating electricity is cheaper than generating power from wind, including the carbon charges loaded onto gas, then we would be cutting our own throats not to use it.

"With 600 of our skilled people leaving for Australia every week, we cannot afford to keep adding costs onto our standards of living by adding unduly to our energy costs."

ENDS

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