NZCPR Newsletter: The Lifeblood of Progress

Cheap, reliable energy is the lifeblood of progress. Yet as we approach winter, concerns are already being raised about the security of New Zealand’s electricity supplies.

Because of a lack of rain, our hydro-lakes are lower than they should be at this time of year, and there has already been talk of possible blackouts. While wind and solar energy can help, they are notoriously unreliable. A shortage of natural gas to run the Huntly back-up power generator, and a lack of local coal means more reliance on imported coal. 

Looking at our power system as a whole, around 60 percent of our electricity is generated through hydropower, 18 percent geothermal, 9 percent gas, 8 percent wind and solar, and just over 2 percent from coal.

We have more than 100 hydro schemes, seven geothermal plants, 19 operational wind farms, a handful of solar farms, and the country’s main thermal backup generator is the Huntley Power Station, which can run on gas, coal or biomass.

In 2023, New Zealand generated 43,000 gigawatt hours of electricity and consumed 39,000, with households accounting for 35 percent of total consumption, followed by industry on 33 percent, commerce 24 percent, the primary sector 6 percent, and transport less than one percent.

As a result of policies introduced to meet the demands of the United Nations Paris Agreement on Climate Change, the security of New Zealand’s electricity system has been severely compromised through the increasing use of intermittent wind and solar power.

The ultimate objective of 100 percent renewable generation is clearly impossible, but the Government continues to pursue it anyway, even though such policies will undoubtedly lead to escalating prices and power shortages.

However, there is hope on the horizon: around the world it is now dawning on the public that the economic sacrifice they are expected to make as a result of their government’s obsession with the UN’s climate agenda, is all for nothing.

The Paris Agreement cannot deliver net zero by 2050 for the simple reason that the global consensus on which the project was based has collapsed. The Agreement was touted as an “all or nothing” deal. Pressure was put on all countries to sign up. We were told everyone needed to do their bit for it to work. Saving the planet - and saving humanity – was a collaborative effort. It depended on all of us.

In other words, as long as every country contributed to net-zero global emissions by 2050, then the future climate apocalypse predicted by UN climate modellers could be averted.

The implication was that if any country faltered, they would be letting everyone down and disaster would befall the planet.

The fact that three countries out of 200 did not ratify the Agreement was seen as immaterial. While Iran, Libya, and Yemen collectively account for around 2 percent of global greenhouse gas emissions, this was not regarded as material enough to derail the agenda.

But when three major signatories, China, India and Russia, that together are responsible for 43 percent of global emissions, indicated they would not begin reducing emissions until long past the 2050 deadline, the entire collaborative project should have been aborted. Instead, it was treated as a minor glitch: “nothing to see here”.

With the US now joining their ranks, pushing the collective output of non-complying nations to more than 57 percent of global emissions, it is impossible to ignore – especially as those countries are making no secret of the fact that they are charging full steam ahead in building fossil fuel capacity to power economic growth and boost prosperity.

Thanks to President Donald Trump’s high profile Executive Order to withdraw the US from the Paris Agreement, the abject futility of the oppressive climate policy regimes being pushed by governments around the world – including New Zealand – can no longer be ignored.

Voters are seeing through the political stupidity and asking why they are being forced to pay for a policy that is destined to fail.

A voter backlash is building.

And what about businesses?

In many countries, the inflated cost of power has forced manufacturers to relocate to nations with more benign policies. Those unable to move out or pass the costs on to consumers, face reduced profitability or closure. The loss of jobs is a tragic testimony of the destructive influence of a climate agenda driven by zealotry instead of reason. 

New Zealand saw the effects on business first hand last year when power prices spiked and the forest products company Winstone Pulp International - facing a five-fold escalation in the cost of electricity that took expenditure on power to an unsustainable 40 percent of the company's costs - closed its doors with the loss of more than two hundred jobs.

Then when North Island wholesale power prices peaked at $826 per megawatt hour, up from $120 the year before, and $56 ten years ago, Pan Pac Forest Products suspended its Hawke's Bay pulp production until prices came down, saying, “The cost of electricity now far outweighs any profit we can recoup, and it is actually cheaper to halt production.”

With rising power prices forcing up the cost of New Zealand goods and services, there is no doubt that Jacinda Ardern’s Net Zero policies made our problems worse.

As a new Prime Minister back in 2018, claiming that climate change was her generation’s nuclear free moment, she revealed her objectives to students at Victoria University: “When I spoke with Al Gore a few months ago I said that New Zealand’s role in climate change is anchored in who we are as a nation… We have been a world leader on critical issues to humanity by being nuclear free, the first to support women’s vote and now we could be world leading in becoming carbon neutral.”

And so, with Al Gore as a mentor, on the eve of her first major overseas meeting of Commonwealth leaders, Jacinda Ardern set New Zealand on the path to become a world leader in carbon neutrality by announcing a ban on new offshore oil and gas exploration. The fact that there was no warning about her bombshell “Captain’s Call”, no consultation, nor even Cabinet approval, suggests the PM was more concerned about profile building than the good of the country. 

While the ban gave her bragging rights on the world stage, locally it was described as “economic vandalism” and a “kick in the guts” for the Taranaki region, that affected 11,000 jobs, a $2.5 billion industry, and led to the decline of our reserves of clean burning natural gas, and an escalation in the importation of Indonesian coal.

It turns out Al Gore was not the only influence on our energy policy. According to then Climate Minister, the Green Party co-leader James Shaw, so too was a youth-based climate activist group Generation Zero: “The Climate Change Response (Zero Carbon) Amendment Bill was the idea of Generation Zero in 2016, a movement of young people committed to safeguarding the climate that they will grow up in.”

On their website, Generation Zero explains: “Climate change is not only an environmental issue; it is a social issue. Societal inequities caused by the downstream impacts of colonisation and capitalism, place groups such as rangatahi, tangata whenua, tangata moana, people of colour, disabled people, low-income communities, LGBTQIATakatāpui+ folks, women and other marginalised genders on the frontlines of climate change. Decolonisation and upholding mana motuhake as outlined in Te Tiriti o Waitangi are at the heart of this climate-just future.”

No wonder our energy policy is stuffed.

Minister Shaw was also influenced by UK climate leaders, who were invited to New Zealand to advise him on our legislation, which ended up loosely modelled on theirs.  

But their model is proving to be a disaster. Although the UK produces only 0.72 percent of global emissions, they now have the highest electricity bills in the developed world, with manufacturers increasingly moving abroad to escape the escalating prices.

While Nigel Farrage’s centre-right Reform Party campaigned at the last election on pulling the country out of the Paris Agreement, the Conservatives have now seen the light.

In a speech last week, their new Party leader Kemi Badenoch described Net Zero by 2050 as ‘fantasy politics’: “Let’s start by telling the truth on energy and net zero. Every single thing we do in our daily lives is dependent on cheap, abundant energy. When energy became cheap and abundant, living standards began to rise, health and life expectancy grew. Cheap, abundant energy is the foundation of civilisation as we know it today. We mess with it at our peril.”

She expressed concern that zero carbon policies were creating a massive over-reliance on China, as the key manufacturer of critical wind, solar, and electric car components. And she pointed out the hypocrisy of climate advocates claiming windfarms, solar farms, and electric cars are a ‘green’ panacea, when they are made with energy from fossil fuels.

Kemi Badenoch believes it’s time to tell the ‘unvarnished truth’: “Net zero by 2050 is impossible. Anyone who has done any serious analysis knows it cannot be achieved without a significant drop in our living standards or worse, by bankrupting us. Responsible leaders don’t indulge in fictions which are going to make families poorer. Or mortgage their children’s future.”

And she made this crucial point: “Without the rest of the world doing the same, we are making our country less safe, less secure and less resilient.”

She could have been speaking about New Zealand.

Without the rest of the world sacrificing their future to chase the impossible zero carbon goal, New Zealanders are being treated like fools. With our contribution to global emissions a miniscule 0.16 percent, our government is deliberately making us all poorer for no good reason.

What’s worse is that the 0.16 estimate uses the overblown values for livestock emissions that Jacinda Ardern and James Shaw adopted to discredit farming. If the true value for methane was used, New Zealand’s emissions would barely register.

This week’s NZCPR Guest Commentator electricity systems engineer Bryan Leyland describes how net zero policies have undermined the resilience of New Zealand’s electricity system:

“The previous government's ban on gas exploration has further limited energy availability, while the push for ‘net zero’ emissions has resulted in a lot of money being squandered on costly and unreliable alternatives.

“Transpower has already warned that the system may not be able to meet the demand on calm, cold winter nights for the next few years or even more.

“Unless effective action is taken, we are at risk of prolonged blackouts lasting days or even weeks in any year with low rainfall. The declining availability of gas will make the situation even worse.

“The belief that wind and solar power can provide cheap, reliable electricity is simply not true. Evidence from overseas shows that increasing the amount of wind and solar power on a system increases the power price.

“More and more countries are actively considering abandoning net zero policies. We should do the same. Continuing with Net Zero policies will inevitably give us an unreliable and expensive supply.”

As Bryan says, all around the world questions over net zero policies are intensifying. It’s time to bring some common sense into this debate.

Extremists like Generation Zero and their promoters within the left-wing media, should be ignored. The Coalition needs to come clean and admit their zero carbon policies are damaging the economy and must be abandoned. Not to do so is unconscionable – New Zealanders would be condemned to falling living standards for no good reason.

The age-old argument that we need to uphold our green credentials in a discerning marketplace, no longer holds water, when our major trading partners including China, the US, and India, have all turned their backs on the UN’s climate agenda.

It is time the Coalition put the interests of New Zealand first by abandoning net-zero policies in order to focus on economic growth.

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Dr Muriel Newman established the New Zealand Centre for Political Research as a public policy think tank in 2005 after nine years as a Member of Parliament. The NZCPR website is HERE. We also run this Breaking Views Blog and our NZCPR Facebook Group HERE.