9/10/2023·5 mins to read
Election 2023: An energy crossroads?
With general election voting already open and election day this Saturday 14 October, there is considerable interest in how the election outcome could affect New Zealand’s approach to climate change and our transition to net zero emissions.
This includes formulating the strategy for New Zealand’s future energy system, and our plan to increase the percentage of total energy production from renewable energy. While Aotearoa has the third highest rate of renewable energy in the OECD at 40% of total energy production, the remaining 60% is from thermal sources.
Perhaps unsurprisingly given recent climate events, there is consensus among nearly all the major political parties on the need to increase New Zealand’s renewable energy capacity. New Zealand has committed to a number of domestic and international emissions targets, and although these are broadly supported, there are differing opinions on the best way to achieve our commitments.
We recap a high-level summary of the major political parties’ key energy policies below, and without assessing the current Government’s progress to date. Many of these policies are at a principled stage, providing general direction rather than a comprehensive, detailed plan. As a result, there remains some uncertainty regarding how these policies will be practically implemented by the new Government.
The Labour Party has targets of 50% of total energy consumption from renewable sources by 2035 and 100% renewable electricity generation by 2030, with a review at the 2025 emissions budget.
Key policies include:
- Ban the building of new thermal baseload electricity generation
- Commit to the second stage of a pumped hydro scheme at Lake Onslow ($70 million design and engineering work), subject to a suitable business case
- Implement a new National Policy Statement for Renewable Electricity Generation and Electricity Transmission within the first 100 days of Government
- Continue the fast-track consenting pathway for renewable energy
- Establish a regulatory framework for offshore wind by 2024
- Continue funding the Government Investment in Decarbonising Industry (GIDI) Fund
- Establish All-of-Government Power Purchase Agreements to provide security to build new renewable energy projects at scale and investigate any barriers preventing similar agreements in the private sector
- Finalise the Gas Transition Plan to identify the opportunities and benefits provided by the energy transition for the gas sector, identify pathways for the fossil gas sector, and identify the role for renewable gases and other low-emissions technologies
- Continue to implement reform of the electricity sector in line with the Electricity Price Review, with the intention of supporting affordability for consumers
- Provide new funding for the Clean Car Standard and expansion of the Low Emissions Vehicle Contestable Fund
- Continue funding the development of the existing green hydrogen roadmap
The Labour Party’s current energy policy statement is available here.
The National Party has stated that it is committed to New Zealand reaching net zero emissions by 2050, in line with our existing international commitments.
Key policies include:
- Local authorities have one year to issue resource consent decisions on new renewable wind, energy, and geothermal projects and to re-consent existing generation assets, including hydro, and transmissions and local lines
- Resource consents will have a minimum duration of at least 35 years and lapse time of 10 years
- Eliminate consents for upgrades to existing transmission and local lines infrastructure, within limits
- Issue a new National Policy Statement for Renewable Electricity Generation (NPS-REG) within a year of National taking office, making solar, wind, geothermal and biomass controlled activities under the Resource Management Act
- Fast-track permits for offshore wind, complete offshore wind regulations within one year, and require decisions on resource consent applications for offshore wind generation to be made within two years of application
- Introduce options to manage first mover disadvantage for new connections to local lines, including claw back rules to allow first movers to recover a share of those costs from future connections to that infrastructure
- Update funding rules for regulated monopoly transmission and local lines infrastructure under the Commerce Act, to provide greater cost certainty for regulated infrastructure and assist in managing first mover disadvantage
- Disestablish the GIDI Fund
- Introduce a National Policy Statement - Hydrogen to provide certainty for investment in hydrogen production and distribution
- Complete development of offshore wind regulations (including commercial permits) within one year
The National Party’s current energy policy statement is available here.
The Green Party plans to take a principled approach to decarbonising the energy system, focussing on reliable and affordable renewable energy from a system that prioritises Māori, community and public ownership over private profit. The Greens will set an ambitious total to increase renewable energy production that is consistent with New Zealand’s commitment to keep global warming to 1.5 degrees.
Key policies include:
- Establishing electricity and gas pricing mechanisms and potentially requiring generators to divest their retail operations
- Removing market-structure incentives for using coal, oil and gas by generators and electricity tariff subsidies for high-user organisations and emerging industries
- Accelerating renewable energy developments by requiring large utilities to rapidly develop consented renewable energy projects
- Mandating Transpower to regulate fair access for independent operators to support innovation and system flexibility
- Ensuring market access for independent power producers, including power purchase guarantees and regulated buy-back rates above the wholesale price
- Offering a Government-guaranteed power purchase platform to reduce barriers for new market entrants and manage risks
- Reclaiming public ownership and instituting Te Tiriti-based governance of energy assets and planning, establishing a framework for Māori and community involvement, ownership and leadership in energy projects
- Rapidly develop national guidance and legislation on offshore wind energy which includes sufficient bonds and decommissioning requirements
- Prohibit new fossil fuel permits, phase out existing extraction, prohibit building of new thermal generation plants (including gas-fired generators and peakers)
- Allow the production and use of green hydrogen only, and only for hard-to-abate industries, while undertaking a whole energy system analysis to determine whether green hydrogen should be part of that system
The Green Party’s current energy policy statement is available here.
The ACT Party’s energy policies include:
- Repealing the Zero Carbon Act, eliminating the Climate Change Commission, and tying New Zealand’s emissions cap to trading partners’ emissions
- Reversing the current Government’s ban on new oil and gas exploration
- Disestablishing the GIDI Fund
- Introducing a simplified permitting regime for offshore wind projects by adopting "suitable and well-understood standards" from equivalent OECD countries (such as Denmark) where many such projects have been delivered successfully
- Not allowing the Lake Onslow project to proceed as a government project, but supporting development by private operators if there is no cost to the taxpayer
- Removing Te Mana o te Wai from resource consenting requirements under the National Policy Statement for Freshwater Management, to facilitate easier consenting of hydro schemes, and replace it with specific allocation rights akin to Resource Management Act water permits
- Introduce a regulatory framework to support carbon capture and storage
The Act Party’s current energy policy statement is available here.
Te Pāti Māori (Māori Party)
Te Pāti Māori has stated that it supports the goal of 100% renewable electricity. Its climate and energy policies include:
- Ending new onshore oil and gas permits and withdrawing existing onshore and offshore oil and gas permits within five years, aiming to decommission sites by 2030
- Establishing a dedicated $1 billion Pūngao Auaha fund for Māori-owned community energy projects and solar panel and insulation instillations on marae, kura, homes, and papakāinga housing developments
Te Pāti Māori’s current energy policy statement is available here.
The results of the general election could reshape some aspects of the renewable energy landscape in New Zealand, but in our view there is unlikely to be any major directional shift in overall Government policy. The domestic and global momentum behind the transition to renewable energy is now so significant that we expect to see strong support of our existing emissions targets, regardless of the election result. We anticipate that parties with stronger (actual or perceived) climate and energy policies will achieve strong election results, as this is now a key issue for New Zealanders which has been highlighted by the devastating effects of Cyclone Gabrielle.
We look forward to post-election analysis of the energy sector under a newly elected Government, and will be providing regular updates on legal developments as they arise.
Get in touch
If you would like to discuss the implications of the incoming government’s approach to renewable energy for your business, please get in touch with one of our experts.