For sixty years Taranaki has been supplying energy to the rest of the country. I am optimistic this will continue for decades to come. Added to hydrocarbons will be more wind generation and hydrogen. The best thing about New Zealand’s energy mix, is that it is diversified.
It is a positive thing that both Genesis Energy and Mercury are building windfarms in South Taranaki and Manawatu. However, Transpower who coordinate the generation of electricity in the country, say we need the equivalent of over nine windfarms being built every year for the next twenty-five years, to meet the doubling of power demand they are predicting. That is quite a challenge, which is why organisations like the Fenwick Forum recently reported, that New Zealand needs a co-ordinated plan to build more renewable generation assets.
My sense is that we will see more renewable generation being built, but that our current suppliers of gas generation for peak seasons, will still be needed to enable our energy system to have the necessary ability to flex up and down when demand increases but the weather conditions for renewable generation aren’t suitable.
National recognises that Natural Gas underpins renewables, by being the lowest emission, instant-start backup, which can be called on when the lakes are low, the wind doesn’t blow and the sun doesn’t shine. This is important to keep household energy costs as low as possible, to strengthen security of supply and to get our economy growing again.
As a country we have had 83% of all our electricity generated by renewables in the last year. That’s hydro, wind and geothermal; but in June only 75% came from renewables, simply because demand has been up and our renewables are generating at capacity. In winter we see a lot more thermal generation occur because of higher demand when we turn on our heaters. In my mind, if we need that backup generation, I’d rather it be Taranaki gas, which is far cleaner than imported Indonesian coal. And in keeping with “Go Local”, it gives our people jobs as well.
I welcome the launch of Ara Ake, the New Energy Development centre. If a National led government was formed, I would be supportive of the continued role the Ara Ake Centre can play in our future.
However, working with the current energy sector would also be a priority to a National led Government, assisting them to transition to a lower emissions future. Although the current Government consistently talk about phasing out the hydrocarbon sector, this is not our perspective. It was pleasing to hear the new Chair of Ara Ake, Rob Campbell and the Chair of Venture Taranaki, Jamie Tuuta, both say the centre would be working with legacy and current energy providers. This is the model of other such centres in places like Aberdeen, which is in the heart of the UK’s hydrocarbon sector. The UK Climate Change Commission are looking at such technologies as carbon capture, utilisation and storage (CCUS), and I hope this is part of Ara Ake’s brief going forward.
The Just Transition work in Taranaki has raised expectations, but generally there has been disappointment in Cabinet follow-through, with talk of tradeoffs and managing expectations. The disappointment is that the hydrocarbon sector contributes approximately $650 million a year to the government coffers, but it is hard to see how a transition will occur at such a scale to replace 7,000 jobs in our region. I think the government realise this when they talk about managing our region’s expectations.
I believe our best path forward is to leverage the experience and expertise of the energy sector, as we explore our future options. Taranaki’s proven enterprise and innovation can lead the way and give New Zealanders confidence that the lights will stay on and that we have a bright future.