My thoughts on electricity policy in 2020


New Zealand faces numerous environmental and economic challenges going forwards into the 2020’s and beyond. One those challenges is ensuring we have an adequate energy supply without being environmentally irresponsible. This article outlines my thoughts on electricity policy in 2020.

I will start with the most obvious one. Hydroelectric power. Most New Zealanders can probably name at least one hydroelectric power station in this country. I have added a significantly longer, but not complete list below:

  • Waikato River: Aratiatia, Atiamuri, Whakamaru, Waipapa, Maraetai, Ohakuri, Arapuni and Karapiro; Tongariro Power Scheme: Rangipo and Tokaanu
  • Upper Waitaki: Tekapo A and B, Ohau A, B and C, Benmore, Aviemore and Waitaki
  • Clutha River: Clyde and Roxburgh

The contribution of hydroelectric power is substantial with the power stations listed supplying about 3,400 megawatts of electricity and the total contribution being about 60% of our total generating capacity. Whilst there are calls to dam more rivers to supply clean energy, they come at great ecological cost to the rivers and not all of them are suitable for damming even if we did want to.

One possibility is that the out put of Manapouri power station, the largest hydroelectric power station in the country would be diverted to the national grid. This poses challenges as well as opportunities. In terms of challenges, could New Zealand’s grid take another 850 megawatts of electricity and if so, what would it mean for the market – the shares of shareholders in electricity companies would significantly weaken. A flip side would be the ability of thousands of New Zealanders who struggle with electricity bills each year to be able to pay them and stay warm.

Whilst I support the development of renewable energy sources, I am not so keen on the N.I.M.B.Y’ist politics that often go with such developments. The same people who talk about the need for green energy are often ones who grumble about a wind turbine when they see mangled birds on the ground or realize that these things are not altogether quiet. Would they rather another dam was built, thus depriving us of further unspoilt river?

Unlike others, I support the exploration of Waste-to-Energy as a potential source of energy. This is not to say I encourage the continuation of the waste stream just to power a W-t-E facility, but, I believe waste material that cannot be easily recycled should be sent to a W-t-E facility. In terms of where to locate such facilities, I believe the West Coast of the South Island is a good place to start. Whilst the West Coast has numerous rivers that the energy lobby would be interested in damming, there are several good reasons why we should not:

  1. Too many rivers are dammed or have been diverted in New Zealand for electricity generation already;
  2. The West Coast is seismically volatile and a major earthquake of up to magnitude 8 is likely in the working life of any dam built – it would have to be more robustly constructed than might be worth the cost
  3. The best candidates have unique natural characteristics that would be lost along with tourism operations that have been built up along side them

But there are two types of energy that I accept have no future. One is coal fired power. Coal is a sunset industry whose only hope of survival is to power a standby power station that is used when hydro-electric storage lakes are low due to dry conditions. Huntly power station which has four coal/gas units each capable of generating 250 megawatts has started replacing them, with its owner Genesis intending to completely remove coal by 2030.

The other is nuclear power. I have described in other other articles why there is no place for nuclear power in New Zealand, and why establishing such a power station would be prohibitively expensive and resource intensive.

There are other things New Zealand could be doing, which to the best of my knowledge it is not seriously considering. The first is solar energy. There are significant challenges facing solar energy, which include that the panels require rare earth minerals that are sourced from politically unstable parts of the world. The financial return from solar projects also raises questions about the viability of such a power source. Nonetheless that has not stopped a small scheme being established in south Auckland for industrial purposes.

The second we have actually given much political consideration to, for reasons of reducing the cost to householders to stay warm. However little practical thought as to HOW we do it – even though the answers are glaringly obvious – has been given. I am talking about the massive scale insulation of every state house in New Zealand and setting requirements for new houses. Politicians on the right will decry the regulations as red tape whilst politicians on the left will decry the social costs. Yet neither seem interested in a compromise. How, when – if at all – this ever takes place is anyone’s guess.

N.Z. in lock down: DAY 36


Yesterday was DAY 36 of New Zealand in lock down as we fight the COVID19 pandemic.

But the economic environment that we need to move into post-COVID19 is not the old unsustainable, throw-away, biota demolishing monster of old. Not if the human world is to avoid early demise caused by inane decisions being made by powerful forces in spite of all the technology, all the knowledge and know how to the contrary. No. If the human world is to continue to grow and enhance itself the human’s that make that world possible much change.

Everything is there, except the political willpower to make that change. But it does not need to be like that.

The change I envisage is something that is not at all new in terms of what I espouse. I have long been a fan of green technology and know how. Whether it is hempcrete to replace concrete because the latter has a massive carbon footprint; the development of hydrogen as a fuel source for vehicles; the extraction of gold, palladium and other valuable metals from e-waste for re-use, the future is green technology.

But it is not just technology, though sustained investment in that will be very useful. The economic recovery will need projects that can be started quickly and get lots of people back to work in a meaningful way. One such thing would be a complete overhaul of the insulation in New Zealand’s social housing stock, which would create a trade boom. The number of houses ready for use in that inventory is nowhere near adequate and so there is a need for new housing projects – Christchurch has an abandoned saleyard at Addington which have not been used for decades; and could accommodate dozens of one/two/three bedroom dwellings quite easily.

There are large scale planting projects that could be getting underway to replant poor quality land that is not practical for farming, building or grazing. To that end I support the Green Party request for $1 billion, which it proposes to use for a range of community funded initiatives. Native forests are very effective carbon sinks and suck up huge quantities, but without intervention to stop possums and other animals from destroying new plantings and stripping foliage, they might become net carbon emitters.

Some projects will be longer term and are quite ambitious. Which is why it is interesting to note the Green Party also has a plan for a $9 billion investment in the New Zealand railway network. In line with New Zealand’s commitment to dealing with climate change, the Greens intend to promote railways as an alternative to the heavy investment in motorways. New Zealand has 1,067mm track gauges, which are similar to some used in Japan for fast trains that can reach speeds of 160km/h. Whilst expensive, the speed of the trains would enable people and goods to reach places nearly twice as fast as a vehicle obeying the 100km/h speed limit.

But as I said at the start, this all comes down to will power. The money is there – the Government has an unprecedented license to spend at the moment. The projects are there and some are shovel ready, whilst others are probably no further than back of the envelope calculations that look promising, and still more are ones that should have been done yonks ago.

So, who is going to give the go-ahead for these projects to get started and get New Zealand back to work?

 

 

N.Z. in lock down: DAY 27


Yesterday was DAY 27 of New Zealand in lock down as we try to fight the COVID19 pandemic.

When I woke up yesterday morning and turn on my social media, my initial thoughts were to look for the latest controversy from United States President Donald Trump’s press conferences. Instead one of the first things that came up on Twitter was an article from well leftist blogger Martyn Bradbury (CitizenBomber). Mr Bradbury was trying to understand how the international oil market, which has slumped massively as a result of COVID19, could go into negative territory – i.e. be effectively worthless.

My reaction to this news was mixed. On one hand I thought no doubt there will be many relieved New Zealanders who hope that the costs will be matched to some extent by a significant drop in petrol and diesel prices here. With that, equally they will be hoping that the cost of transporting goods is reflected in a drop their prices upon arrival at their point of sale. Also happy, I imagine will be the environmental movement, who will be hoping that the inevitable revival is checked by a change in how New Zealanders get around.

On the other hand, despite those many people working in what the political left term a “sunset industry”, I could not help but feel sorry for the thousands of people who work in the immediate refinery and distribution parts of the industry. The industry will definitely try to mount a revival, but its greater challenge could be a long term one to see how willing it is to invest in biofuel and hydrogen research.

No doubt the petroleum industry would have been shocked by this historic low. One month in which the developed world and much of the developing world has effectively ground to a halt except for essential businesses will no doubt cause a major dip in profit margins. It is unlikely even if all developed nations started significantly scaling back their COVID19 containment measures tomorrow, that prices would recover for 18-24 months if not significantly longer. Many countries are now seeing literal air quality improvements from the absence of petroleum and diesel powered transport before their eyes – in Punjab, one can see the Himalaya’s for the first time in 30+ years; Los Angeles, long known for its smoggy skies will be enjoying its cleanest view of the San Bernadino mountains in a long time.

The greatest challenge will be political. The technological means to invest in hydrogen and biofuel research are already here. The challenge for politicians will be extricate themselves from big oil’s embrace and taking steps to ensure that the few silver linings of a crisis in world history that has otherwise been a monumental disaster, are not lost on us.

 

 

Oil and gas policy the Government’s biggest gamble


A few weeks ago the Zero Carbon Act passed through Parliament with assistance from National. It might have been a great day for the political career of Green Party co-leader James Shaw, Prime Minister Jacinda Ardern and the environmental faction then. But it comes at considerable long term risk that cannot be ignored in the provinces.

Several provinces will be directly impacted by the move away from fossil fuels. None more so than Taranaki, but Westland (coal) and Northland (refinery) are hot on its heels.

I honestly do not think the Government has thought it through. A broad, grand brush stroke is meaningless without substantive policy and matching investment in alternatives, which at this stage does not appear to be something viewed as a priority by either the Minister for Energy and Resources Dr Megan Wood or the Prime Minister.

I have stated my ideas about what should happen clearly. A potential hydrogen plant support a transition away from petroleum; the exploration of hemp as a building material since concrete manufacture releases a lot of carbon dioxide; waste to energy as an alternative source of electricity among others. I am believer in the green technological revolution and I believe New Zealand has the means and the know how to show other small nations how they can transition to a more sustainable energy platform. I am believer because there are jobs to be had, research to be done which will draw in skilled workers and infrastructure projects – should that research be positive – that could go ahead.

Since the announcement, I have heard little from Dr Woods, Ms Ardern or Mr Shaw on how they might mitigate the economic impact that they must surely know is going to be had on the country. They must surely be aware that National is going to push the economic consequences of this as hard as it can as it seeks to wrest back control of Government from Labour-Greens and New Zealand First.

To be sure the Government has passed the Zero Carbon Act, with National Party assistance on the understanding National will make changes when it next wins the election. But little has been said about developing a working group or other framework to steer this change. Nothing has been said about obvious minor steps such as recycling aluminium to reduce electricity consumption, some of which are also quite easy steps to take.

Overall I feel that this is the Government’s biggest gamble. It might pay off if it sets a precedent for other countries to follow, but I get the feeling that New Zealanders are not going to come on board until they see a plan, irrespective of what Extinction Rebellion, Greenpeace and other N.G.O.s might think about this. People are understandably concerned about their incomes, being able to provide for their families and make sure that their children have all of their needs provided for.

Unless this gamble is given some solid policy to back it up with aside from the Zero Carbon Act, I believe this is the gamble that might cost the Sixth Labour Government the election.

 

 

Infrastructure boom or bust?


Former National Party M.P., Minister for Economic Development and one time Treasurer in the Government of Prime Minister Bill English, Steven Joyce believes that it is necessary for the Government to spend more to stimulate the economy. The comments from Mr Joyce come amid an increasingly turbulent global outlook and signs that the New Zealand economy may be about to stall.

I find it interesting that Mr Joyce, from a party that is traditionally against government intervention in the economy especially where it comes to significant expenditure, seems keen on this Government spending more to stop the economy from stalling.

It is not that I necessarily disagree either, though my preferences for spending priorities will be rather different to his. Mr Joyce and the National Party had a road building programme called Roads of National Significance that they focussed their transport policy on at the expense of other transport modes. $12 billion was set aside for new motorways and extensions of existing ones, particularly around Auckland, but also with significant projects in Christchurch and Wellington.

Whilst some of the projects were definitely needed like the four laning of State Highway 1 from Belfast to Templeton, there were other motorway projects of questionable need which were constructed north of Auckland. If the money had to be spent on roading, there are three potential alternative projects in the South Island that could have gone ahead would have been:

  1. Either a second one lane bridge over the Hurunui River in north Canterbury on State Highway 1 or the addition of a second lane to the existing one;
  2. Making State Highway 70 better able to take trucks, thereby keeping them off the southern part of the coastal stretch of State Highway 1
  3. Replacing the one lane bridges over most West Coast rivers with two lane structures or building a second single lane one next to the existing structure

However a much more meaningful project would be to upgrade the South Island segment of the Main Trunk Line. This would be a useful alternative for freight that might otherwise end up on trucks that cannot or should not be navigating South Island roads, in particular the Kaikoura coastal stretch and the alpine passes. But how much thought have either party given to this? Probably not much.

The Government and National both say that they are concerned about the cost of petroleum to the consumer, but neither have bothered to explore the possibility of biofuel using waste stream product. I have mentioned potential cooking oil and fat, but there may be other sources in the waste stream as well. Depending on the feasibility this could be a potentially significant revenue and job creation scheme – researching the feasibility; developing a blend; getting it tested and certified; finding potential investors in it. The waste stream will not be disappearing any time soon given our consumption habits and the unwanted refuse it creates.

Another idea that has been subject to criticism of late is developing Waste to Energy plants. One mooted for the West Coast has run into trouble after it was found that the Mayor of Buller District Council had gone behind his council to see if it was possible. Whilst I support the possibility of a waste to energy plant, the N.I.M.B.Y.ist under current starting to appear suggests resistance would be strong and not necessarily founded on fact.

So, yes, there are things the Government could invest in, but they might not be what Mr Joyce was thinking.