Some large rural areas have a particularly vulnerable energy supply relying mainly on generation and transmission from afar. This situation is a major factor limiting growth and attraction of new industry into these regions.  Current transmission will not keep pace even at our present growth rates and Transpower must expand transmission and affordable new generation is a must.

 

Analysing all the known future renewable energy options including wind, hydro, solar, wave, biomass, and geothermal it is clear that most of these options are technically not feasible in the foreseeable future or are far too costly to be economic. Thermal generation can be extended but it has limited expansion opportunities. There are opportunities to conserve energy and use renewables at a residential level but with the high costs involved as well as the already high costs of house construction this remains limited unless accompanied by heavy government subsidies. Wind power is promising and there are a number of possible sites but it requires upgrade of transmission lines and alternative energy sources when the wind stops.

 

 

Regional economic development is hampered by unsatisfactory electricity supply and if we continue too insist on total renewable sources costs will continue to climb. Conventional generation must remain a key element in any future energy strategy and the government needs to review its refusal to burn fossil fuels due to climate change issues. Hypocritically, it allows export of this same coal to countries with much weaker environmental controls.

 

 

Environmental complaints are based on erroneous claims of environmental damage and chemical contamination to scare us into opposing the coal use. The fact is the 19^th Century view of the world environmentalists propagate has long gone. Modern technologies mean we can now burn coal while still meeting stringent environmental standards. Coal is the most abundant energy source in the world and can be readily transported throughout New Zealand. Oil is too expensive and gas is not readily available. Suggestions of alternative power generation such as hydrogen, solar, and tidal are at least 20 years away before they come close to being viable on a commercial scale. And, the much vaunted wind option has limitations.

 

 

The Madrid-based Rey Juan Carlos University has recently published a report that outlines the damage caused by excessive government assistance to producers of expensive wind and solar energy. The result has been a dramatic rise in the cost of power in Spain with electricity rates for large consumers increasing over 50 percent. This has resulted in a massive loss of competitiveness in industry with businesses relocating into countries with lower energy costs.

 

 

According to the Ministry of Economic Development’s energy price data, in 1995 New Zealand had the second cheapest household power and the third cheapest industry power out of Australia, Canada, Germany, Japan, the UK and the USA. But by 2006 that had changed with New Zealand becoming the second most expensive for both household and industry power, with household power rising by 37.5 percent and industry power by 56.3 percent.

 

 

The proposed Emissions Trading Scheme will impose further cost across the economy, which will adversely impact on businesses and consumers alike. Officials have already estimated that such a scheme will increase electricity prices by at least 5 percent and they have also warned that there will also be flow on increases from other parts of the economy as well. For farming businesses to maintain necessary increases in productivity it is critical we have affordable and reliable energy. A farmer of New Zealand continues to advocate this position.

 

 

 

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