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NZCSC: The Draft New Zealand Energy Strategy

18 December 2006

The Draft New Zealand Energy Strategy

Coalition responds to comments posted on Scoop Friday 15 December 2006 by Royal Society of New Zealand Policy Analyst, Dr Jez Weston

Bryan Leyland, chairman of the economics panel of the Coalition, and a noted energy consultant, has communicated to Dr Weston the following response:

“While I have to respect your expertise in welding and unicycling, my background of experience in the power industry in New Zealand and overseas leads me to believe that your commentary on the energy strategy indicates that neither you or the RSNZ (or for that matter the authors of the Energy Strategy) have a good understanding of the complexities and operational limitations of the energy and electricity systems in New Zealand.

(Extracts from Dr Weston’s comments are shown below in italics, with Bryan Leyland’s comments in Roman immediately following)

Monday saw the release of the draft New Zealand Energy Strategy, at the head of a long line of discussion documents aiming at reducing our greenhouse gas emissions. The Royal Society's Energy Panel produced a major report to inform this strategy and will reply to the draft strategy. As well as the energy panel's input, the policy unit would like to hear from our members on this important discussion.
I have already sent you my comments on the RSEP report: I am disappointed that they appear to have been buried/ignored.

My initial response to the strategy is that the vision is great, the actions disappointing. The need for a price on greenhouse gas emissions, something that the Stern Review called "an essential foundation for climate-change policy", is accepted.
By now you should be aware that the Stern review is widely discredited. The RSNZ of all organizations should be aware of the dangers of accepting a paper as gospel before it has been peer reviewed. Reference links to some of the critical reviews that have been published so far are listed at the end. You will find many more on the web and there are more to come. You should be aware that by choosing a discount rate of 0.1%, Stern is a long way from the generally accepted discount rate. If a more realistic 5% is used, then his "cures" are far more expensive than the disease. On top of that, you must be aware that he assumes that spending $billions now will, for certain, make a difference in the future. In effect he has chosen to ignore the caveats in the IPPC report that state the high level of uncertainty associated with their projections of future climate.

The message has got through that we have enough cost-effective renewable generation to cover our electricity growth for decades.

I have not read that into the Strategy. As the strategy fails to set out how much energy we need, and what energy resources we have, I do not see how you are able to make that statement. Regarding wind power, the RSNZ would be wise to wait for the study by the Electricity Commission (EC) that will be released shortly. Then, for the first time, we will have some idea of the economic limit to wind power development in New Zealand.

Based on what I have learned from 50 years in the New Zealand power industry, and from my experiences as an advisor to the EC, I would be surprised if the New Zealand system can manage more than 1000-1500 MW of wind power without serious operational problems and the need for large amounts of thermal generation to provide backup. There is a very definite limit to the backup that our 4,500 MW of hydropower can provide. I think that 400 MW of backup would be close to the limit. Studies indicate that wind power needs about 85% backup. In Europe, the figure is now known to be 92%. (E.ON 2005 report)

There is a strong emphasis on both energy efficiency and affordability.
Also, there seems to be an assumption that increasing energy efficiency will reduce the demand for electricity. As I pointed out in my critique of the Royal Society of New Zealand’s (RS) energy document, this is not the case. And as the Minister is keen on electric cars (as I am) any switch to them will result in a large increase to our electricity demand. (100,000 electric cars plugged in every evening will be at least 200 MW extra demand. And they need to be recharged even if the wind is not blowing.

Many of the actions are heading in the right direction, including preparing the vehicle fleet for biofuels

Biofuels can only make a small contribution. Beyond that, we will start to reduce agricultural production. According to the Wall St Journal, the heavy subsidies offered for biofuels overseas has already resulted in more tropical forests being chopped down and a substantial increase in the price of palm oil. As I have lived in West Africa and SE Asia where palm oil is an important food, I cannot support policies and subsidies that destroy tropical forest and exacerbate poverty and malnutrition. I hope the RS agrees.

and enabling distributed generation.
istributed generation cannot make a huge contribution and is of little benefit to distribution systems. I strongly oppose large subsidies camouflaged as "net metering". As I am part owner of a 1000 kW hydro plant in Golden Bay, (that would benefit from a carbon tax or net metering) you can be confident that I can back up these statements.

There is also much about capability and coordination within energy research, with suggestions of a sustainable energy research and education centre.The Tyndall Centre is suggesting..

"Suggesting" yes, but on what evidence? Computer based climate models that failed to predict that the world would not get any warmer after 1998? And, as Lennart Bengsston told us in Stockholm, cannot model clouds properly. Lennart also told me he liked my suggestion that sunspot related solar effects be incorporated in the models. That is something that the RS could support in the interests of keeping an open mind and exploring all avenues. Isn't that the objective of the RSNZ?

a global cut of 90% may be needed by 2050 to prevent the worst catastrophes,
What catastrophes? On what evidence? To my knowledge, not the climate models. They all show a steady rise, with no indication of the "tipping points" we hear so much about. Have you not read what Mike Hulme of the Tyndall centre said about climate catastrophists? Does the RSNZ want to be labelled as climate catastrophist?

While we will still have to adapt to some level of climate change. However, if every opportunity proposed by this strategy comes to pass, our emissions in 2030 will be no better than our 1990 level. The NZ Energy Strategy suggests we can do no better than to attempt to take 25 years to get us back to a level of emissions we were at 15 years ago. Given the urgency and risk of climate change, do you think this is enough?

In view of the fact that world has not warmed since 1998, the climate models failed to predict this, and the solar driven climate theories predict cooling until 2030, could you please explain the scientific justification for claiming "urgency"?

Bryan Leyland,

Chairman, Economic Panel, New Zealand Climate Science Coalition


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