United Future
Gordon Copeland

Snap debate on electricity crisis

For some years now, we have had an unregulated electricity market, and we had piously hoped that some invisible hand would be there to prevent this kind of situation arising. As Peter Brown pointed out, one cannot have a self-governing market that is, at one and the same time, a competitive market and I am, therefore, very, very pleased that we will have, at last, a visible hand: somebody will actually be charge of that extremely important sector. I congratulate the Minister on the announcement that the Electricity Commission will be established. I believe the Minister and the Government are right in putting before the people of New Zealand a soundly based and well-thought-through scheme to put aside reserve electricity generation capacity for those years when the rain does not fall and we have extremely dry conditions. It is all very well to criticise that action but we need to come up with a solution by way of alternative, and the suggestion that has been put forward by the Government is a sensible one. It is compatible, too, with the free-market nature of the industry. I think people have thought simplistically that there is one side only to this—that we will just build new reserve capacity, take it out of the market, and set it to one side so that it will be there when required. That is partly valid—it is exactly what the Americans, for example, have done in relation to strategic oil reserves—but in fact it is far more complex than that. Rod Donald mentioned the demand side. That will also feature in it, because, as I understand it, New Zealanders are being asked to buy an insurance premium to set aside reserve generating capacity.

GORDON COPELAND204 I think that is a very, very sensible thing to do. However, I want to say immediately that my vision of the future of this country is very different to that of the previous speaker, Rod Donald of the Green Party. I believe this country’s social and economic future is heavily dependent on our being able to continue to provide efficient, low-cost, and reliable energy to not only our households, but also our industries. Every facet of our life—be it cellphones, computers, or whatever—is dependent on electricity. We simply need the stuff to keep our society functioning, and our economy growing. For example, we need $3 billion of new investment in the wood processing industry, and we cannot process that wood here without a reliable source of energy through electricity. It is therefore a real concern to me—as I know it is to every New Zealander—that we are in this unfortunate crisis right now. We can sit here and apportion blame, but, in the eyes of New Zealanders, blame will first rest with the Government. New Zealanders do elect Governments to foresee these problems and to solve them in advance, and that clearly has not happened here. Some, of course, will then point the bone—as happened today with Genesis Energy—and say, “You should have had your stockpile of coal in place so that we didn’t have to import the jolly stuff.” I am sure that Genesis Energy will point the bone at Solid Energy, and say: “They wouldn’t give us the coal at the price we wanted.” Putting all that aside, the bottom line is that New Zealanders are angry and upset. They are saying: “How on earth did we get into this situation?”. In every crisis there is a bit of a silver lining to the cloud, and, in this case, the crisis has got people to focus on some issues that we have been ignoring. One of them is the reserve electricity generation, which we have already mentioned, and I am pleased that action has been taken about that. The other thing is just to ask ourselves some big-picture questions. One of those big-picture questions must surely be why is it that in a nation with many lakes and rivers, and much hydro capacity we have not, for many years, been building new hydro schemes? That has not just applied under this present Government; it also extends back to the previous National-led Government, and probably to the Government before that. We have put in place a whole lot of self-regulated rules to stop hydro schemes being developed. People have gone to the Department of Conservation with hydro scheme proposals around the Rotorua lakes, the Mohaka River, the Motu River, the Raukokere River, the Karamea River,

the Arnold River, the Beaumont River, and the Clutha River in Central Otago. They have all basically said: “Look, we’ve got a good scheme. Let’s go ahead. It will have fantastic environmental outcomes.” They have been consistently told: “No, you can’t do that, because it involves the conservation estate.” Some people tell me that there are as many as 38 potential schemes that have not gone ahead because of the way in which the Conservation Act has been set up. We need to understand what it is that has caused that problem, because it is a systemic problem, which has cost this country dearly. Instead of taking advantage of the natural resource we have got in hydro electricity, we have put a barrier in the way so that we cannot use our own water. The simple problem is this. Under that Act, the Minister of Conservation is set up to be an advocate for conservation values. It is a well thought through, proper function for a Minister of the Crown to have. Like every other New Zealander, I appreciate the wonderful environment that this country has, and I do not want to see our conservation estate damaged either. But if the Minister is an advocate, we have to ask ourselves whom he advocates to. Normally, the function of an advocate is to put a case to a judge, who will look at the facts on both sides of the argument, and come up with an adjudication that is in the interests of the nation. That is what is lacking under our present system. We have no ability to take hydro scheme proposals to an independent judge—be it the Environment Court, or a specially appointed arbitrator; it does not matter which it is. We are not able to take those proposals forward, and argue through, on the one hand, the conservation values, and, on the other hand, the need of this nation for efficient, low, renewable, and sustainable electricity. We desperately need to make the very most of our competitive comparative advantages in this country, and electricity could, and should, be one of those for New Zealand. We really have only ourselves to blame for being in this situation. We have to get that right. United Future is therefore calling upon the Government to urgently undertake a review of the Conservation Act, and to address the problem to which I am alluding. In many of these situations, we can have win-win situations. Yes, we can have a dam, and we can also have a lake, which is good for recreation. We can put an island in the lake, and make it a sanctuary for birdlife. We can make sure that we get other pieces of land into the conservation estate to compensate for any loss to forests, and so on and so forth. It is not really rocket science. The other thing we need to recognise—and I asked the Minister a question about this today, but I am not sure that he understood the question—is that the Electricity Commission should also be charged with the task of minimising dry-risk conditions. I believe that that should be one of its basic terms of reference, and there are ways of doing that. First of all, we have already been told in this House that the forecast is for more rain on the west than on the side of the main divide on the South Island. We will have less rain on the east. One therefore does not have to be a rocket scientist to figure out that we need more hydro capacity on the west, which could offset the occurrence of a dry year when it kicks in. The second thing we are overlooking is wind. New Zealand has enormous wind capacity. Some estimate that we could have many, many thousands of megawatts of wind generation in this country. I heard my colleague Peter Brown talk about visual pollution from windmills—well, heck, there are plenty of places where we could build them where we would not even see the jolly things. It is free, sustainable, and renewable energy. In my view, we should have hydro and wind at the top of the pile. I am not opposed to burning coal to save on electricity, but it is a non-renewable fuel. It emits carbon into the atmosphere, and it could well be more expensive than wind or hydro. So what about some common sense and logic? We could have a national goal of saying that we want renewable, sustainable, low-cost electricity for the future of this nation, and all parties of this Parliament could collectively focus on coming up with some answers. I think that would be the only thing that would now mitigate the anger that New Zealanders feel about this matter.