Kennedy Graham

Phased milestones vs ‘Nanny State’: Exchanging views with Mr Brownlee

by Kennedy Graham

Fresh from an exchange with the Minister of Energy last week over the left-right spectrum and our 21st century problems, I questioned Gerry Brownlee in the House  about his recent draft Energy Strategy.  The ideological blinkers are clearly preventing us from moving purposefully towards a low-carbon economy.

I asked what phased milestones the Minister had to achieve his stated goal of reaching 90% electricity generation from renewable sources by 2025.  His reply was that his Government did not ‘determine the investment decisions’ needed to increase the availability of renewably-generated activity.  Rather it sets the ‘regulatory and policy environment’ in which investments are made (such as the amended RMA and ETS).  Phased milestones would be possible ‘only if we lived in a command-and-control-style economy’.   “We do not,” he observed.

Mr Brownlee is correct.  We do not live in a command-and control economy.  We never have, although a National Prime Minister came closest three decades back, igniting the neo-liberal revolution of the ‘80s that dominates this Government’s thinking even today.

But we do live in a country that is part of an unsustainable global economy, whose most obvious symptom is dangerous climate change from excessive carbon emissions.  Switching to renewable energy sources and developing a low-carbon economy within a short time-period is a condition of enduring economic welfare, both for New Zealand and the world.

It is generally recognised that this switch must be completed within two decades at the latest.  New Zealand’s goal of 90% renewable electricity is one part of that transformation.  Identification of phased milestones is a legitimate part of attaining that goal.  It does not reflect Kremlin thinking.  It reflects an agreed aspiration, through consensus, to ensure that a final goal is more likely to be attained, with public and private sectors working together.

Most people and most governments and organizations do it.  The household budget contains milestones to pay off the mortgage.  The National Party will have a fund-raising plan, most probably with targets, for the 2011 election.  The Government has a phased milestone, signed by the National Cabinet in 1997 in the Kyoto Protocol to achieve the goal, signed by the National Government at Rio in 1992, of stabilising the global climate at a level that is not dangerous to the planet’s life-support systems.  The UN has phased milestones, under the well-known Millennium Development Goals, to halve global poverty, improve educational attainment, and increase maternal health and longevity.

We all have milestones, Mr Brownlee.  It is not a betrayal of the private sector as the driver of the national economy to lay down mid-point milestones to measure how well we are moving towards a stated target.

In fact, you have them yourself, or at least your Government has access to them, notwithstanding your momentary lapse in acknowledging this.  The NZ Electricity Commission’s draft Statement of Opportunities, released in July, is intended to “provide interested parties with independent information to consider in assessing the potential for grid management efficiencies and, in particular, investment in upgrades and transmission alternatives.”  The SOO, says the Chairman, is not a plan for the future development of the grid or of generation.  Rather it is a set of scenarios as to how the generation and transmission of electricity may develop, given a range of reasonable assumptions.

The scenarios show a trend for each year for all energy sources between 2010 and 2040.  Each renewable source – geothermal, hydro, wind, tidal, solar – is expected to increase.  The Government, and the public, will have this available to assess the effectiveness of the Energy Strategy over the next decade.

The policies of the previous Government, through the thermal power station moratorium and its ETS, were broadly on target for the market to deliver a 90% renewable by 2027.  The Green Party’s ‘Getting There’ document of August 2009 showed how we could achieve 90% by 2025.  This Government’s repeal of the moratorium and weakening of the ETS has left that in tatters.  Without a clear signal through government leadership, the market will not deliver on time.

Mr Brownlee’s Strategy speaks of “fostering the deployment of new renewable sources such as marine and solar sources of energy”.  How the Government plans to foster marine energy is left unclear.

If all you do is state an aspirational goal, leave it to the Commission to postulate scenarios based on assumptions, and leave unclear how you are going to foster new renewables, you will simply not attain the target.  Yet attaining the target is an imperative for our children’s generation.  And yours is the ministerial responsibility.

Here are a few personal thoughts on how to facilitate the attainment of the 90% target.  Assume a population growth rate of 0.8% per annum, and electricity generation growth of 2% p.a.  Based on these assumptions, the table below sets out a possible ‘phase in’ of renewable electricity sources and ‘phase-out’ of fossil-fuel- based sources.

Electricity Generation (PJ) Fossil Fuels Hydro* Geoth. Wind Tide Solar** Total Rewewables
2010 780 25% 58% 13% 4% 0% 0% 75%
2015 861 20% 60% 13% 5% 2% 0% 80%
2020 950 15% 60% 13% 12% 10% 0% 85%
2025 1050 10% 55% 13% 12% 10% 0% 90%

* Some aging hydro stations decommissioned.

** Solar water heating has a negligible effect on national base-load.

This is not a command plan.  It is a heuristic tool.  It shows the magnitude of the challenge of switching to a low-carbon economy when energy consumption is growing exponentially.  The reality will not be precisely like this.  But unless we all – householders, voters, farms, companies, local authorities, government – have some idea of the phase-in / phase-out trend we need as a nation, we shall never get there.

And the only way to get there, in light of the above, is a robust carbon price signal for the market economy to react.  There, the Government is failing us as well.  But that is for another time.

Published in Environment & Resource Management | Parliament by Kennedy Graham on Thu, August 5th, 2010   

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