The worst case scenario for the disruption to our energy supply was catastrophic. It wasn’t not enough petrol for cars. It was our industrial and agricultural industries grinding to a halt due to lack of diesel. It was potential food shortages due to lack of fertilisers. The worst case scenario was much more severe than anything else we have faced.
So the first priority for energy should be supply. If New Zealand doesn’t have enough energy to support our businesses and households, we face economic disaster. This isn’t just electricity, but energy. The first focus of energy policy must be ensuring adequate supply. We must ensure supply remains ahead of demand.
The second priority should be domestic resilience. We were and are dangerously exposed to what Iran and the Houthis do in foreign sea lanes. We need to increase domestic production of both energy and electricity. Where we do have to import it, we need greater storage facilities, and where possible more refining done domestically. China has 12 to 24 months of energy supplies in storage. We have a few weeks. This means more power stations, more gas and even more coal (as a backup). Also battery storage.
The third priority should be price. Before this crisis, I would have had price as first or second. But now it is more important we have surplus supply and greater domestic production and storage – even if it costs more. However price is still important. Consumers have to be able to afford electricity and fuel. Businesses that have higher energy costs will pass them on in higher prices.
The fourth priority should be environmental impact. We should have an ETS which covers the external costs of greater greenhouse gas emissions, as that encourages more renewable electricity etc. However it can’t stand in the way of supply and domestic resilience. It is better to dig up coal in New Zealand, than import it from China. 45% of our energy is from renewable sources, which is a lot higher than 15% globally. But purity is not more important the supply and resilience.
David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders
The second priority should be domestic resilience. We were and are dangerously exposed to what Iran and the Houthis do in foreign sea lanes. We need to increase domestic production of both energy and electricity. Where we do have to import it, we need greater storage facilities, and where possible more refining done domestically. China has 12 to 24 months of energy supplies in storage. We have a few weeks. This means more power stations, more gas and even more coal (as a backup). Also battery storage.
The third priority should be price. Before this crisis, I would have had price as first or second. But now it is more important we have surplus supply and greater domestic production and storage – even if it costs more. However price is still important. Consumers have to be able to afford electricity and fuel. Businesses that have higher energy costs will pass them on in higher prices.
The fourth priority should be environmental impact. We should have an ETS which covers the external costs of greater greenhouse gas emissions, as that encourages more renewable electricity etc. However it can’t stand in the way of supply and domestic resilience. It is better to dig up coal in New Zealand, than import it from China. 45% of our energy is from renewable sources, which is a lot higher than 15% globally. But purity is not more important the supply and resilience.
David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders
6 comments:
Just drill!! And stop with. The renewable nonsense and ets and Paris bs! The countries least impacted by the Iran war are the same countries most responsible for global emissions. We can green tax our way to poverty (which. We are doing nicely) or we can thrive!!
Excellent contribution David because it was specific . 45% of our power is from renewables is fact and we should therefore leave The Paris Accord .
I suggest NZ coal has a greater contribution than a mention in fourth place . Coal is cheap because it does not have to be paid for from earnings or exports . Coal also creates NZ work , GST and tax which lifts it to equal first above third place .
Domestic resilience is second , however coal exceeds second over oil because there is no risk of supply and modern infrastructure makes it as low emissions as oil/gas. Trucks , tractors , heavy equipment are available in electric power , only the power cost is arguable.
I accept we have been smothered in the green parable , however parliament should visit the coal power plants in Japan , see the available data of non pollution , discuss with world renowned Mitisibushi Industry coal plants and order them .
One for Auckland and one for Southland to enable domestic power prices to plummet and industry to have certainty .
This could be done immediately and arranged for a week to Japan to give certainty for Coal and Energy in NZ before the election .
David has 1 and 2 separate and backwards when in fact they are the same thing. 3 more hydro dams and we’re sorted, supplemented by wind / solar / other renewables. 3 year teams don’t allow for this kind of planning, especially with the right wing so addicted to using urgency to whip through any flight of fancy laws without so much as batting an eyelid!
Jacinda has a lot to answer for
I always look to your posts with interest David. Likewise with this one, however, I struggled to finish reading when I read your forth priority re the ETS.
IMO the most significant financial imposition we, as taxpayers, will be faced with. (wartime restrictions aside)
There is at least one source of energy which we have been led to believe is far too unsafe. But it fulfils all those priorities -
"Supply, resilience, price, environment".
There is one operator who have used this energy source for over seventy years without any of those specific "fears" we were told to expect.
The U.S. Naval Nuclear Propulsion Program. With their decades long safety record and accumulated expertise, they seem to have knocked off those priorities quite well.
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