Power to the people - Labour's energy strategy spells political trouble

Last updated 12:14 15/10/2007

Ok, this will get me into trouble with many people who post on this site, but I'm going to say it anyway: Labour's new energy strategy barks like a dog.

The strategy, two 100-page volumes filled with Pollyanna-ish claptrap, follows on from Labour's climate change strategy released a few weeks ago.

Regular readers will remember that I praised Labour over its climate change policy for managing to achieve that rare political alchemy of gathering widespread support for a move, ticking off at least some of one's objectives, without actually painting oneself into a corner.

Labour did that by ticking most of the Green boxes and pledging to meet a variety of far-off targets without actually promising anything concrete likely to get itself into trouble in the short term.

But the energy strategy goes quite a bit further. It has much more Green Party influence than the climate change strategy - unsurprising, given that Green co-leader Jeanette Fitzsimons is the Government's official energy efficiency spokesperson - and as a result contains less political compromise or realpolitik.

It's Labour's second attempt at such a strategy - its first one was dumped after the Government acknowledged it had failed hopelessly to get anywhere near the savings targets. 

Stripping away the pages of numbers and formulae and meaningless hyperbole such as "New Zealand's quest for sustainability'' and talk of a "carbon neutral nation'', what the strategy does is put some flesh on the bones of Labour's previous pledges to halve emissions from the transport sector by 2040 and to have 90 percent of electricity produced by renewable energy sources from 2025.

Of the two targets, it's the second that is likely to get Labour into trouble since it requires decisions in the short to medium term. The first of these has already been made - no new gas, oil, or coal-fired power plants can be built by the state-sector generators (who make up some 70% of total generation) in the next 10 years.

That immediately knocks on the head Genesis Energy's plans to build a new 500MW gas-powered station in Rodney, which it had planned for the last two years to feed the growing demand for power on Auckland's North Shore, where the population is increasing by more than 5% a year.

Energy Minister David Parker reckons that this shortfall can be more than compensated for by wind power coming on-line, but I'm very sceptical. Here's why. Wind farms suffer from the NIMBY syndrome. They're great in theory but in practice no one wants them in their backyard.

Meridian Energy has finally got permission to build a new farm near Makara, on Wellington's wild south coast, but this took several years to get through the planning stages and it's nowhere near a major residential area. There are a number of applications in the pipeline, but most are years away from being built.

Major scale hydro projects are unlikely. The days of the Benmores and the Waitakis are gone. No power company is going to get permission to flood an entire valley through the Environment Court these days. Project Aqua is likely to be the last attempt at such a scheme.

Demand for power is growing at 2% a year. The energy strategy states this will fall to 1.5%, which is an arguable point, but even accepting this, that means that over the 18 years before 2025 the country will require 27% more energy than it currently has available just to maintain the status quo. Add immigration, economic growth, and Kiwis' seemingly insatiable desire for new electronic gadgetry into the equation, and it's starting to look a little dodgy.

Given that the security of our energy supply is already questionable (remember the cold showers and the brownouts every time there is a "dry year''?) and the Government's decision to can the 500MW Rodney station has a whiff of political craziness about it.

Then there's the electric cars. Parker wants New Zealand to be a world leader in their adoption. Putting aside the practical considerations of introducing them outside of major urban areas, there's the issue of where the power would come from to juice them up. No point in burning coal or oil to produce it, that would defeat the purpose. Pass the additional renewable GigaWatts, please.

Remember that on top of this, Parker wants to actually increase renewable production by 20%. He believes there is the potential to use wind for much of this. Currently we produce around 610GW-hours of power a year from windmills. The energy strategy wants this increased to a whopping 9200GwH by 2025. That's an awful lot of windmills (15 times as many, if my maths is right).

It's also going to require personal sacrifices above giving up the plasma telly and buying a few more Pink Batts  for the attic. The energy strategy estimates Kiwis will have to lift their energy savings by 40% - yep, almost half - in order to meet the targets.

If these can't be attained, the law of supply and demand might assist. Supply shortages tend to send wholesale power prices through the roof, which in the short term force large power uses to shut down production and in the longer term push up residential prices. That isn't going to be popular and it won't help the economy either.

Parker says that won't happen, but energy analysts disagree. Longer term, the Government argues, this painful adjustment will pay off. And it might be right. But tell voters that in the middle of a freezing cold winter when they're enduring cold showers and they can't afford to switch on the heater.

It's all very well steering the country down a path of energy sustainability, but I'm not sure voters yet realise what that will mean in practice. And placing the country's energy security in jeopardy is foolhardy indeed.

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