Joint submission on the Energy Strategy (NZES) and the Energy Efficiency and Conservation Strategy (NZEECS

Thursday, 02 Sep 2010 | Submission

Authors: Kennedy Graham MP, Metiria Turei MP

Tags: Energy Efficiency, Energy

Joint submission on the Energy Strategy (NZES) and the Energy Efficiency and Conservation Strategy (NZEECS)

2 September 2010

Metiria Turei MP

Green Party Co-leader

Bowen House

Parliament Buildings

Wellington

And

Dr Kennedy Graham MP

Green Party Energy Spokesperson

Bowen House

Parliament Buildings

Wellington

Submission Summary:

We OPPOSE the proposed changes to the Energy Strategy (NZES) and the Energy Efficiency and Conservation Strategy (NZEECS).

1. We oppose the NZES' emphasis on fossil fuel development. We cannot solve our problems of fossil fuel dependence with more fossil fuels. It is based on an outdated 19^th century development model and supported by the long discredited "efficient markets" theory.
2. We oppose the empty focus on 'providing information' in both documents, rather than directly addressing significant market failures that prevent energy efficiency and renewables from flourishing.
3. The draft NZEECS fails to state the means of achieving its policy objectives, as required by law.
4. The NZEECS needs to contain specific new actions to which the Government is committed and which it has funded.

We have followed the outline of the suggested submission questions:

New Zealand Energy Strategy

1. Does the proposed NZES effectively promote and support the appropriate development and use of energy resources? If not, what changes do you propose?

• We recommend the emphasis on fossil fuel development be deleted from the draft strategy and more detailed proposals be developed for renewables and alternative fuels.
• We do not think that 'full utilisation' of our petroleum resource is desirable and recommend it be deleted from the NZES. This is inappropriate from both a climate change and intergenerational equity standpoint.
• We oppose exporting all our fossil resources to the highest bidder (highest value) as the strategy proposes.
• We recommend a Parliamentary Select Committee Inquiry looks into peak oil and its short and long term impacts on New Zealand's society and economy before embarking on any development path.
• We recommend that a clear pathway to the 90% renewable electricity target be spelled out in the NZES, with corresponding programmes articulated in the NZEECS.

1. What barriers to investment in energy resources are not addressed?

• The draft strategies fail to address barriers to investment in any meaningful way. Instead, specific measures to address this are being removed from the existing NZES and NZEECS. We recommend that the Minister restore the parts of both existing strategies that seek to remove barriers to investments in renewable energy and energy efficiency.

• We recommend that specific means for removing barriers to renewable energy development are detailed in the strategy and fully funded. This might also be the highest priority of the NZES, not the development of fossil fuels.

• We recommend that the true costs of carbon, other environmental damages and externalities be reflected in the cost of energy in New Zealand. The current ETS is inadequate in this respect and we recommend that complementary measures be spelled out in these two strategies.

• We recommend that a policy of strengthening the Resource Management Act is added to the NZES in order that the true cost of climate change and biodiversity loss from energy development and use can be properly considered. This will remove barriers to investment in low-carbon alternatives and energy efficiency.

• We recommend that a stable and fair regulatory environment be developed for the energy sector, where the polluter pays principle is given proper prominence. This will remove barriers to low-carbon energy alternatives and energy efficiency measures without picking winners.

1. Do you have any comments on the proposed goal, priorities and 12 areas of focus? What would you change, and why?

• We recommend that 'develop petroleum and mineral fuel resources' be removed as an area of focus or at the very least, demoted to the bottom of the list. This focus area is based upon an outdated, 19^th century economic development theory, with no place in a modern, cleantech economy that is transitioning to a low-carbon future. We cannot end our addiction to fossil fuels, lower emissions or achieve energy security by digging up more of what we are trying to use less of.
• We I recommend that either the development of renewable energy sources or the transition to a low carbon economy be the over arching goal of both strategies.
• 'Embrace new energy technologies' is empty rhetoric without programmes and funding to back it up. We recommend that specific programmes are developed, funded and spelled out within the NZEECS to achieve this focus, before any changes are made to the existing NZEECS, which has detailed proposals for achieving this aim.
• 'Competitive energy markets deliver value for money' is also empty rhetoric, as the few changes the draft mentions are already in train and there is nothing for the strategy to achieve going forward. We recommend that specific programmes are developed and funded, including a detailed analysis of the cost/benefits of progressive pricing and feed-in-tariffs to make progress in this area of focus.
• The 'oil security and transport' focus area is the one with the greatest potential within the strategies but the least commitment from Government to show leadership. Drilling for more oil and shipping it off to the highest (overseas) bidder will not enhance New Zealand's oil security one iota.
  • We recommend that the programme to develop Vehicle Fuel Economy Standards spelled out in the existing NZEECS be revived, funded and fast-tracked as the surest way to improve our oil security and to reduce emissions, while protecting our economy from the oil shock that the International Energy Agency is predicting in a few short years.
  • We recommend that the billions in funding currently earmarked for new motorways be re-prioritised for public transport as well as optimising and maintaining the road network we already have.
  • We recommend that all the transport and transport fuel programmes currently in the NZEECS but at risk of abandonment are restored and fast-tracked.
• As with the competitive markets focus, the 'reliable electricity supply' focus is empty rhetoric which offers nothing new to achieve going forward. It is meaningless as the stated actions will be completed before the new NZES or NZEECS take effect. We recommend that this draft is returned to the Minister with a request for more substance, or that the area of focus is dropped from the strategy.
  • We oppose the empty focus on 'providing information' in both documents, rather than directly addressing significant market failures that prevent energy efficiency and renewables from flourishing.
  • We are opposed to the laissez-faire focus on 'providing information' as the only policy to address significant market failures in the uptake of energy efficiency and new renewable sources of energy. (Very little behaviour change results from nagging.)
  • Information is vital to efficient energy use and efficient markets, but it is not enough. We recommend that both the draft NZES and the draft NZEECS clearly spell out what codes, standards and regulatory frameworks will be developed by this Government and how they will impact on and support the stated objectives. This will send clear market signals as to how this government will achieve its goal of greater energy productivity.
  • The Government admits in the Governance section of the draft NZEECS that it has only work shopped criteria and has not developed any means to achieve its policies and objectives. This is a failure on two fronts. First is the Government's failure to meet the statutory requirements of the law and the second is a failure to commit to any actions of substance, leaving a vacuum if this empty draft is adopted by Government.
  • We recommend that the government manage a staged, orderly retirement of the Huntly coal fired units, in line with the sustainable energy pathway in the Electricity Commission's Statement of Opportunities to give the market a clear signal about what new capacity will be required in the medium term. This would be a clear statement of the government's commitment to a 90% renewable target by 2025.
• The 'enhance business competitiveness through energy efficiency' focus is very appropriate, but light on detail or new ideas. It implies that existing programmes will continue, but fails to mention any programmes or promise any new funding. These programmes need to be spelled out in the draft NZEECS.
• The focus on 'an energy efficient transport system' is very appropriate, but devoid of substance. This government has cancelled the vehicle fuel efficiency programme, so cannot claim to be doing anything proactive.
  • We recommend that the Vehicle Fuel Efficiency programme is restored, fully funded and fast-tracked.
  • It is wholly inappropriate for the NZES to say it expects local government to optimise roading/transport networks without giving guidance and/or funding to do so. We recommend that the network optimisation programmes mooted in the existing NZEECS but never funded be given a high priority and fully funded.
  • We recommend that the NZES justifies how the government's motorway binge stacks up economically against public transport alternatives, which have been shown to be more cost effective and generate more jobs, contributing more to the stated aim of economic growth and prosperity.
• The focus on 'warm, dry, energy efficient homes' is the only area in the draft strategies where focus, policy and programmes are all in alignment. This is an example of how all the government's aims should be articulated in the two strategies.
  • We recommend a commitment in the NZES to fully fund an additional 3 years of the Heat Smart programme.
  • We recommend that the Home Energy Rating Scheme (HERS) or any worthy successor programme be restored and fully funded in the NZEECS.
  • We recommend that a programme to develop and require Minimum Energy Performance Standards (MEPS) for all rental and commercial properties is restored in the NZEECS.
• The idea of 'best practice in environmental management' is a good area of focus, but lacks specificity.
  • We recommend that 'best practice', be backed up with regulatory codes and standards that are based on the best environmental science, not based on 'industry best practice' or 'voluntary codes', both of which have failed here and abroad.
  • We recommend that a policy of strengthening the Resource Management Act is added to the NZES in order that the true cost of climate change and biodiversity loss from energy development and use can be properly considered. This will remove barriers to investment in low-carbon alternatives and energy efficiency.
  • We support the development of a National Policy Statement on Renewable Electricity Generation.
  • We recommend that a National Policy Statement on Biodiversity, which is currently gazetted but not being developed, be fast-tracked to complement the NPS on Renewable Energy. This will ensure that needs of our native flora and fauna are considered when looking at future energy development.
  • We recommend that a National Policy Statement on Climate Change Adaptation be developed to complement the NPS on Renewable Energy. This will ensure that the anticipated changes in rainfall, weather events and sea level are considered when looking at future energy development, as this infrastructure has a long lifetime. It will also ensure that the impact of any development on climate change will be considered when looking at future energy development.
  • The proposed focus states that it 'recognises' the environment but makes no mention of preserving it intact for future generations to enjoy. This is a significant and telling omission. We recommend the focus be amended to recognise the intrinsic value of the environment, the fact that it underpins rather than contributes to our economy, as well as its significant contribution to GDP and in the provision of ecological services.
  • Palming this focus area off as a 'local government responsibility' is disingenuous and irresponsible. However, adopting the recommendations for more National Policy Statements is an appropriate way for central government to give guidance to local authorities, and is the neglected part of the RMA process. We recommend that the Government reviews the original intention behind the use of National Policy Statements in the RMA process, and fast-tracks their development to improve environmental protection.
  • We recommend strengthening the environmental assessment criteria in the Crown Minerals Act and eliminating the exemptions for public consultation, bringing mineral permitting processes more in line with the RMA.
  • We recommend a moratorium on all new deep sea oil drilling until such time as the industry can prove their ability to prevent blowouts.
• The focus on 'reducing energy related greenhouse gas emissions' is very appropriate, but many of the proposals across the strategies work in direct opposition to this aspiration.
  • We recommend that the focus on rapidly developing our fossil fuel resources be dropped from the strategy, as it is diametrically opposed to this goal.
  • Relying on the Emissions Trading Scheme as the primary mechanism is misguided. There is plenty of evidence in the economic literature that complementary measures are both effective and required to achieve real reductions in emissions. We recommend that complementary emissions reductions measures, such as vehicle fuel efficiency, minimum energy performance standards for products and the built environment, as well as other programmes that are in the existing strategy be retained and fully funded.
  • We recommend that the reporting of 'savings' in the NZEECS in both energy and emissions terms be retained.
  • We recommend that a comprehensive programme to phase out the use of coal for the production of electricity and combined heat and power be undertaken, replacing it with energy efficiency measures, wood waste or natural gas, as appropriate.
  • We recommend that a moratorium on all new coal mining be put in place until such time as carbon capture and storage is a proven and affordable technology.

1. Where the draft NZES proposes the Government will support or encourage industry activity, how do you consider the Government can best provide this support or encouragement?

The best way for the Government to support or encourage industry is to restore the specific measures that are being cut from the 2007 NZEECS.

• We recommend restoring and properly funding the Empower, Energy Intensive Business, and Crown Loans funding programmes, which are concrete programmes that encourage industry to be more energy efficient, supporting the draft's stated goal of lifting energy productivity across the economy. Right now there is nothing in either document to support this goal.

1. Do you have other comments?

New Zealand Energy Efficiency and Conservation Strategy

1. Does the draft NZEECS clearly explain the Government's policy and priorities for promoting energy efficiency, energy conservation and renewable energy over the next five years? What do you consider are the priorities?

While the draft NZEECS retains some of the high level goals from the current document, there is nothing to support them. The only stated policies are to 'provide information' and 'encourage' business, and there are no priorities stated at all.

The draft NZEECS fails to explain what the Government will do to achieve any of the surviving high level goals. It is poorly drafted and will accomplish little or nothing.

• We recommend that the draft be returned to the Minister and that he be required to fulfil the intent of the law, which is that there are specific and measurable means to achieve the goals and policies within the document.
• We strongly oppose the deletion of all specific, measurable means by which the draft NZEECS policies will be achieved, as required by section 10(2)(d) of the EECA Act. The existing NZEECS lists 130 specific programmes and activities as the means to achieve the policies set out in both strategies, whereas the new draft deletes these and only hints at 9 programmes, all of which are existing programmes that are better described in the existing text.
• We recommend that failing any appropriate alternative, the existing NZEECS remains in force. This consultation is a waste of taxpayer's time and money because it fails to meet the requirements of the Act.
• The Government admits in question 3 of the submission form and in the Governance section of the draft NZEECS that it has only work shopped criteria and has not developed any means to achieve its policies and objectives. This is a failure on two fronts. First is the Government's failure to meet the statutory requirements of the law and the second is a failure to commit to any actions of substance, leaving a vacuum if this empty draft if adopted by Government.

1. For each sector, are the objectives, targets, rationale and policy outlined in the draft appropriate? What changes do you propose?

The proposals are totally inadequate, because the means to achieve them have been left out of the draft NZEECS, in contradiction to the requirements of the EECA Act.

We recommend that the following programmes and actions are NOT cut from the existing strategy, but are reaffirmed and fully funded:

In the Products Section, We recommend that the following EECA programmes are restored to the draft NZEECS:

• Minimum Energy Performance Standards - Investigate MEPS for existing buildings (especially rental properties) to apply at change of occupancy.
• Product retirement - Design and implement programmes to accelerate the withdrawal of inefficient products - with specific products and targets explicitly mentioned.
• Efficient lighting strategy - Implement the New Zealand Lighting Strategy with a target to reduce lighting energy consumption by 20 per cent by the end of 2015 by implementing: MEPS for a range of light technologies, including incandescent light bulbs, compact fluorescent lamps, commercial and public amenity lighting an information and financial incentives programme to accelerate the uptake of better lighting technology including residential (energy-efficient compact fluorescent lamps) commercial and street lighting improvements to the Building Code.
• Energy Star - Expand this voluntary programme that identifies the most efficient products, usually the top 25 per cent, against set energy performance criteria. Energy Star complements MEPS and MEPL to set standards, to endorse high-performing products with the Energy Star label and raise consumer awareness to lift overall product efficiency. The scheme is to be expanded to cover a further 15 product categories by the end of 2012. (The draft NZEECS has no target or date specified.)

In the Homes Section, We recommend that the following EECA programmes are restored to the draft NZEECS:

• Carbon lifecycle analysis - Investigate and report on mechanisms to support investment in zero energy houses by incorporating embodied energy (emissions) and carbon lifecycle analysis by the end of 2012.
• Home Energy Rating Scheme (or its successor) - Promote the use of the Home Energy Rating Scheme (HERS) or its successor as a design and compliance tool for the Building Code to capture energy efficiency services, including passive solar design by the end of 2012. Also incorporate a star energy rating for the energy performance of a home that will advise potential purchasers, or tenants, of its energy performance and how it could be improved. This will act as an incentive to make further improvements and allow for those features to be better reflected in sale prices and rents.
• Support for local councils - To implement changes to the Building Code, consider other energy efficiency measures and work to address the barriers to the uptake of renewable energy technologies.
• Eco-design advisors - Consideration is to be given to the restoration of the eco-design advisor scheme with recommendations made by the end of 2011.
• Research - A five-year research programme to identify future opportunities for energy efficiency and conservation in households. This will include investigating new technologies and products.
• Solar water heating - Deliver on the National Party's 2008 election campaign promise to inject $35 million in further funding for the Solar Water Heating programme.

In the Business Section, We recommend that the following EECA programmes are restored to the draft NZEECS:

• Energy Intensive Businesses (EIB) - Continue and expand capital grants and information programmes for energy intensive businesses to facilitate the uptake of energy efficiency measures, low carbon technologies and renewable energy.
• Emprove - Expand this cost effective programme targeting New Zealand's larger energy consumers to help them become more energy efficient and to drive the uptake of renewable energy. Includes energy audits and action plans to implement improvements.
• Compressed air project - Deliver capital grants and advice for the uptake of best practice use of compressed air technology in industry.
• Electric motor project - Develop and implement a motor replacement incentive programme by June 2011.
• Energy Management - Continue a programme to partner with business to improve the use of best energy management practices by 30 per cent by the end of 2012.
• Sector support - Double the size of the professional and expert energy management services sector, including accredited energy auditors, by the end of 2012 through the provision of financial assistance to stimulate growth, industry training, continuing education, and the establishment of quality standards.
• Research energy use in commercial buildings - Develop the Building Energy End Use Project (BEEP), a cross-government project to develop understanding of how and where commercial buildings use energy. EECA will work with agencies and the Building Research Council to develop BEEP, ensuring that it is consistent with the Energy Domain Plan.
• Building Minimum Energy Performance Standards (Building MEPS) - Investigate and make recommendations by the end of 2011 on introducing Minimum Energy Performance Standards for existing commercial buildings.
• Investigate, and subsequently demonstrate, leading edge energy efficiency and renewable energy technologies through model farms - Begin a project to demonstrate leading edge energy efficiency and renewable energy technologies in real-world situations, providing technical performance and productivity data for new technologies and alternative energy systems.
• Rural energy project grants - Better coordinate information on the availability and application of a range of existing government grant programmes. Examples of funds available include the Sustainable Farming Fund, EIB grants, the Low Carbon Energy Technology Fund and the Marine Energy Development Fund.
• Enhance the capability and capacity of rural sector energy advisors - Establish programmes to enhance the knowledge and skills of those providing energy efficiency and renewable energy advice to rural businesses and communities.
• Develop a greenhouse gas footprinting strategy for the primary sector.
• Increase tourism industry participation in energy saving programmes - Identify opportunities to encourage the tourism sector to participate in the Emprove programme. A plan of action, including estimated savings, is to be produced by the end of 2010.

In the Public Sector Section, We recommend that the following EECA programmes are restored to the draft NZEECS:

• Support for local councils - To implement changes to the Building Code, consider other energy efficiency measures and work to address the barriers to the uptake of renewable energy technologies.
• Working with local government - Central government agencies will work with local councils to develop travel demand management strategies that may incorporate urban design, investment planning and behaviour change tools.
• Workplace travel plans - Assist workplaces in formulating and implementing workplace travel plans to reduce car and fuel use. This work contributes to congestion targets in Regional Land Transport Strategies.
• School travel plans - Ongoing support for the implementation of school travel plans, walk to school week and walking school buses.
• Regional public transport targets - Regional passenger transport mode share targets are to be set by the end of 2012 through scheduled reviews of Regional Land Transport Strategies.
• Renewable energy information for local government - Assist with RMA policy and plan making and local government energy strategy development.
• Reducing compliance barriers - An ongoing work programme to provide guidance to councils of consenting issues around photovoltaic, micro wind and micro hydro systems so that they can reduce compliance costs.
• Public service accommodation - Departments are to adopt a minimum five-star Green Star New Zealand rating for the construction of all new Grade A office buildings and refurbishments from 1 July 2010; all new government buildings are to meet a minimum five-star rating from 2012.
• Reduction in public sector energy use - Departments to take action to achieve a 10 per cent reduction in energy intensity per FTE.
• Energy-intensive consumables - Public service departments will reduce their consumption of energy intensive consumables such as paper by 10 per cent by the end of 2010.

In the Public Sector Section, We recommend that the following EECA programmes are added to the draft NZEECS:

• An additional 230 school boiler upgrades (from coal to wood) to follow the successful EECA trial completed in 2008.

In Transport Sector Section, We recommend that the following EECA programmes are restored to the draft NZEECS:

• Auckland rail electrification - Complete the electrification of the Auckland passenger rail system by the end of 2013.
• Wellington rail upgrade - Complete the $500 million Wellington regional rail upgrade by the end of 2013. Depending on timetabling and train lengths, the upgrade could double peak time capacity.
• North Island main trunk line electrification - Conduct a desktop feasibility study into options, including electrification, for improving the efficiency of the North Island Main Trunk Line and report with recommendations by the end of 2010.
• Average fuel economy standards - Set a target to reduce the rated CO2 emissions per kilometre of combined average new and used vehicles entering the light vehicle fleet to 170 g CO2 /km by 2015. This will equate to average fuel consumption figures of 7.4 l/100 km for petrol vehicles and 6.5 l/100 km for diesel vehicles.
• Develop traffic system design and management tools for optimising traffic flows - Building on the results of a pilot study in the Auckland urban area, further investigate the use of traffic management and route optimisation as means of reducing energy use and emissions, and develop appropriate advice and tools, by the end of 2010.

In Electricity Sector Section, We recommend that the following EECA programmes are restored to the draft NZEECS:

• Consider options to further encourage additional uptake of distributed generation - Report on the progress of the uptake of distributed generation in the urban and primary production sectors, including forestry, under this strategy. Make recommendations on additional policies and programmes, including consideration of possible specific economic incentives for encouraging additional uptake of distributed generation, by the end of 2010.
• Improve rural security of electricity supply - Develop demonstration projects, both on and off grid, to further identify potentials for distributed generation to contribute to security of supply in rural areas, by the end of 2010.
• Marine Energy Development Fund - Reinvigorate with new funding, the contestable fund to bring forward the deployment of wave and tidal energy by facilitating the early adoption of the technology.
• Marine energy atlas - Publish an atlas of New Zealand's wave and tidal current energy potential by the end of 2011.
• Marine energy deployment standards - Establish a programme that will consider technical and industry standards for supporting the roll-out of marine energy systems from 2010.

1. What should the Government do to deliver the NZEECS? In many cases the draft suggests the Government will 'support' or 'encourage' other parties to make changes. How do you consider this support or encouragement is best provided?

• We recommend that support is provided by having fully funded, specific and measurable programmes that give effect to the Government's policies, as outlined in the answer above. It is unacceptable that these are missing from the draft document.
• We recommend that the strategy clearly affirms what the Government is going to do, via codes, standards and clearly defined, fully funded programmes, in order to properly signal the way forward for the private sector. The government is shirking its responsibilities by pretending that the market is going to lead in an area where there is significant market failure.

1. Where should the private sector, such as firms or industry associations take the lead?

If the intent is to leave leadership entirely to the market, then there is no need for either strategy. The Government pretends to be providing leadership via the two strategy documents, but the proposed drafts fall well short of the mark. The private sector is going to do what it sees is in its best interest, which may or may not accord with the goals stated in the draft NZEECS.

• We recommend that the strategy clearly affirms what the Government is going to do, via codes, standards and clearly defined, fully funded programmes, in order to properly signal the way forward for the private sector. The government is shirking its responsibilities by pretending that the market is going to lead in an area where there is significant market failure.

Do you have other comments?