Earlier this week, we launched a report that showed that our clean energy sector could become the beating heart of our nation’s economy whilst creating many tens of thousands of jobs. Here's the infographic, the report, and the full modelling document.
The report was based on detailed economic and energy analysis by DLR, the German Space Agency as well as New Zealand based experts. Its conclusions showed that with the right Government action we could transform our energy landscape and in doing so play a role in delivering the clean technology solutions that the world needs.
At Monday’s official launch on board the Rainbow Warrior in Wellington, we were joined by over a hundred guests including politicians from the Labour and Green parties, business and industry leaders, economists and scientists all there to welcome the report’s findings. The case for a cleaner, safer New Zealand is compelling and those gathered there will each play their role in moving New Zealand in this direction.
The notable absence however was that National had failed to send anyone from Government. Although is hardly surprising when their current policies will only deliver a high cost, high polluting economy by building more roads and drilling for oil, it is disappointing to see that they are choosing to ignore this enormous clean energy and job creation potential. They are simply asleep at the wheel.
The following evening however, we hosted a political debate that was chaired by the respected business commentator Rod Oram. Russel Norman, Grant Robertson and Nicky Wagner all took part and provided a robust and lively debate on what each of their parties would do to ensure that New Zealand seizes these economic opportunities.
It was clear that despite the compelling evidence before them that the Government has failed to fully understand what is needed to move New Zealand to a cleaner, smarter way of powering our homes and businesses.
And this was evident in Steven Joyce’s answer when challenged on how the Government would seek to capitalise on these clean energy opportunities. He retorted that tired old, inaccurate line that those seduced by Big Oil trot out: that renewable energy is too costly, it needs massive subsidies. Predictably, he was then joined by National Party flag bearer David Farrar claiming we hadn’t done our numbers (here, here and here). But, for anyone who’s actually read the report, it’s plain to see that there have in fact been some serious numbers crunched.
So, just to make sure everyone’s clear on the economics, here’s the nuts and bolts:
- By 2025, 100% of the electricity produced in New Zealand will come from renewable energy sources.
- The introduction of renewable technologies under the Energy Revolution scenario does not increase the costs of electricity generation in New Zealand compared to the Reference scenario.
- Electricity generation costs will become economically favourable under the Energy Revolution scenario and by 2050 costs will be NZ$ 1.9 cents/kWh below those in the Reference version.
- Increasing energy efficiency and shifting energy supply to renewables lead to long term costs for electricity supply that are still 1% lower than in the Reference scenario, although costs for efficiency measures of up to NZ$ 5 ct/kWh are taken into account.
- It will require approximately NZ$ 9 billion or NZ$ 230 million annually more to be invested in renewable energy than in the Reference scenario.
- Because renewable energy has no fuel costs, however, the fuel cost savings in the Energy Revolution scenario reach a total of NZ$ 35 billion up to 2050, or NZ$ 880 million per year. The total fuel cost savings based on the assumed energy price path therefore would cover 300% of the total additional investments compared to the Reference scenario.
Despite this report, sitting on his desk for over half a week, Stephen Joyce could offer no substantive critique on the report’s economic and job creation conclusions. You would have hoped that the Minister for Economic Development might have welcomed a report detailing how the economy could gain a multi-billion dollar boost and tens of thousands of new jobs.
The reality is that Joyce’s world view is being left behind by the incredible global energy revolution occurring right before our eyes. But don’t just take our word for it. The International Energy Agency, that conservative bastion of global energy policy, last year candidly outlined how much the world has changed. They said:
“The perception remains that renewable energy is more expensive than fossil fuels. At least a number of cases demonstrate that this perception is inaccurate. Some renewable energy technologies are already cost-competitive with fossil fuels, and many others would currently be so if existing subsidies for fossil fuels were eliminated and external costs of energy production and use (including climate change, other environmental and health impacts) were included in the price.
“Renewables also face opposition from entrenched and vested interests, which take advantage of their significant market power and political influence to safeguard their positions.”
They also pointed out that: “the high up-front costs that are associated with most renewable energy technologies are offset by lower operating costs and reduced price risk for producers and consumers.”
Those conclusions are exactly what the German Aerospace Agency modelling for Greenpeace New Zealand demonstrated.
There are bottom line economic savings to the New Zealand economy and consumers if the Government gets the correct policy framework in place, which will provide security and surety for private sector investment in renewable energy.
And should Joyce try and dismiss this current worldwide reality as not applicable to New Zealand then we suggest that he should check out the last Statement of Opportunities in 2010 by the New Zealand Electricity Commission. This said:
“Beyond 2020, the most renewable scenarios have the highest revenue-adequate price paths. This is not because renewables are an expensive option, but because those scenarios have high gas and carbon prices. Renewable development is the least-cost response to those conditions; with more thermal generation, costs and prices would be even higher.”
A big renewable energy push will be great for New Zealand, both economically and environmentally. But the IEA point out in the quote above that renewable energy faces “opposition from entrenched and vested interests, which take advantage of their significant market power and political influence to safeguard their positions.”
Are your ears burning, Stephen?