Posted on 1-4-2004
Hodgson Cold On Coal
01.04.2004, Liam Dann, NZ Herald
Energy Minister Pete Hodgson is trying to dampen enthusiasm
for a
coal-powered solution to New Zealand's electricity generating
problems.
He told delegates at the National Power Conference in Auckland
that
renewable sources would ultimately meet most of the country's
needs
because they were cheaper. Coal-fired power stations might be
built in the
next 10 years, he said, but they would have to be economic with
the carbon
tax. Those in the industry who were hoping the carbon tax would
go away if
the Kyoto Protocol was not ratified had missed the point, he
said. "A
price on carbon is being irreversibly embedded in the global
economy," he
said. "New Zealand cannot shut itself off to development.
Attempting to
would simply turn us into a museum for outdated technology,
just as we
once turned our nation into a quaint South Pacific car museum."
The carbon charge would add about 1c a unit to the cost of power
generated
by gas-fuelled plants and about 1.5c a unit for coal-fuelled
power. "A
carbon charge is not so much about pricing fossil fuels out
of the market
as about pricing alternative, low emission, energy efficient
technologies
into it." The extent to which coal was an option would
be determined by
the amount of new gas found, he said. Hodgson said that after
Project
Aqua's demise the days of large-scale hydro-electric projects
were over.
"We are at a turning point in New Zealand's energy history,"
he said.
"Future hydro development is likely to be small to micro
in scale."
The gradual erosion of hydro's dominance of the electricity
system would
at least decrease New Zealand's vulnerability to shortages in
dry years,
he said. But no new source would be as cheap as hydro electricity.
Hodgson
said comment after the axing of Aqua had not recognised that
work had
started on other energy projects. Projects which would start
producing
between now and 2007 would provide 840MW of power. He included
among those
the 400MW Genesis gas turbine at Huntly, which is scheduled
to be running
by December 2006.
But Genesis chief executive Murray Jackson cast doubt on the
timing of the
project, telling conference delegates the company had not been
able to
find enough gas to go ahead with it.
Hodgson also included the Government's 150MW oil-fired reserve
generation
plant at Whirinaki in Hawkes Bay. That plant has been commissioned
for
emergency use and will not add to baseline capacity.
Among smaller projects, Hodgson highlighted Meridian's 90MW
Te Apiti wind
farm. The resource consent process for that project took only
four days.
Wind power was becoming more attractive as capital costs fell
and
electricity prices rose, he said, and was expected to develop
rapidly over
the next few years. "Clearly wind cannot be the only answer
to our growing
electricity needs," he added, raising a chuckle from delegates
who had
already expressed a lack of patience with political hot air.
Hodgson also repeated his confidence that more natural gas reserves
would
be found. "There is no doubt that New Zealand has plenty
of gas," he said.
"We just have to drill enough holes to find it."
The Government was investigating whether it could provide a
more positive
environment for gas exploration, and decisions would be made
in the next
month or two.
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