Portfolio: Energy

Govt slams South Island power price hikes

beehive.govt.nz — Tue, 30 Sep 2008 14:36:53 +1200

The 'alarming' power price rises announced by Contact Energy for South Island customers will be put under the microscope by government, Commerce Minister Lianne Dalziel and Energy Minister David Parker said today.

"These price rises are alarming and I fail to see how they can be justified," Lianne Dalziel said.

"The latest price increases, especially for residential consumers, follow a worrying trend of price rises in excess of general inflation, and I intend to ensure that the market is not being manipulated by electricity retailers. I want assurance that consumers are getting a fair deal."

Contact Energy has just announced price increases of 10-12 percent in Wellington and parts of the South Island. Meridian Energy and Mighty River Power have also recently increased prices.

"We were told a year ago that no more significant price rises were on the way, yet here is another major increase. This further amplifies the gap between residential and industrial tariffs in a way we find difficult to comprehend," David Parker said.

Contact Energy's argument that transmission constraints underlay the price rises, did not seem to make sense, David Parker said.

"In general the South Island produces more power than it needs every year. That is likely to be true even for this year, when a very dry winter has meant an unusually large amount of power has had to be sent from the North Island to the South. Cutting the South Island loose from the North Island would not see the South Island run out of power, therefore it is hard to understand the logic that South Island power prices should be higher than in the North.

"I note that the Electricity Commission head, David Caygill, has expressed similar concerns today.

"The concern is that Contact Energy's real reason for putting up South Island power prices is because their market power is unconstrained by real competition. If so, that is an unacceptable situation."

Ministers noted that their respective regulatory agencies - the Commerce Commission and the Electricity Commission - are currently investigating the adequacy of competition in electricity markets.

"However, we will be asking Cabinet on Monday to consider whether a broader inquiry is needed into whether these price increases are evidence of a lack of competition and market power being used to rachet up prices," Ministers said.

In the meantime, Ministers encouraged consumers facing significant price increases to shop around to ensure they have the best deal. Recent analysis by the Electricity Commission indicates that an average household consumer can often save several hundreds of dollars a year by switching to a retailer offering lower prices.

Otago DHB to save $300,000 a year on energy bills

beehive.govt.nz — Thu, 25 Sep 2008 07:41:45 +1200

Dunedin Hospital expects to save more than $300,000 a year (up to 13 percent of its energy bill) by improving the efficiency of its lighting, heating, hot water and energy management.

The government is helping fund the energy efficiency improvements, which will start later this year and pay for themselves within five years, Energy Minister David Parker announced today.

“It makes more sense to save energy than to build new generation if it’s more cost effective to do so, and that’s a principle the Labour-led government has introduced.

“It also makes sense to invest in ways that save taxpayers’ dollars, while providing the same level of service.”

The Otago District Health Board projects are being funded through Energy Efficiency and Conservation Authority’s Crown Loans programme, which lends money to public sector organisations to cover the up-front costs of energy saving projects, and through the Electricity Commission’s commercial electricity efficiency programme.

The Crown Loan will make up $1.595 million of the $1.94 million project, with the remainder ($345,000) funded by the Electricity Commission. The DHB will repay the loan over five years.

Otago & Southland DHB Regional Chief Financial Officer Robert Mackway-Jones said the biggest savings at Dunedin Hospital would be from lighting.

“By using more efficient fluorescent tubes we can save almost 1.3 million kWh a year (equivalent to the electricity used by 130 households) without compromising on the amount of light delivered.

“Hot water flow restrictors will be installed to reduce the amount of hot water which pours from taps and showers, without compromising patients’ and staff’s needs.”

Another important element of the project is replacing the 27-year old heating and air conditioning pneumatic control system with a new centralised electronic building management system, Mr Robert Mackway-Jones said.

The new system will also be more responsive so will adjust more readily to acknowledge heat from the sun and will mean areas can be isolated so their heating and air conditioning can be switched to minimal when they are not in use.

"This will not only reduce the amount of energy wasted, but also make Dunedin Hospital more comfortable for patients and staff."

Using less hot water and having more efficient heating will mean less coal will need to be burnt in the boilers which supply the steam which heats the hospital and the water it uses, reducing carbon dioxide emissions by about 2,300 tonnes a year (equivalent to getting about 700 cars off the road).

“By using energy more efficiently, the Otago DHB will be able to spend more health dollars where it really counts – on better health care,” Mr Mackway-Jones said.

Energy programmes progress report released

beehive.govt.nz — Wed, 24 Sep 2008 10:01:41 +1200

Energy Minister David Parker today released the first progress report on the implementation of the New Zealand Energy Strategy (NZES) and New Zealand Energy Efficiency and Conservation Strategy (NZEECS).

The Minister said he was happy with the progress being made in pursuing the government's goals in the energy sector.

"The underlying principles of the energy strategies are that we must build more renewables, and that we should invest in energy efficiency where this is cheaper than more energy capacity," David Parker said.

"Thanks to the passing of legislation to support the Emissions Trading Scheme and the 10-year restriction on new baseload thermal generation, we will see more geothermal and wind energy generation, rather than coal and gas. The industry has already responded with plans for an impressive line up of renewable investments.

"Households will receive a huge boost through the a billion dollar fund the government is setting up to support household energy efficiency over the next 15 years."

The progress report identifies some key areas of progress, such as a draft National Policy Statement for Renewable Electricity Generation, a mandatory biofuels sales obligation, and the introduction of a Lighting Strategy to promote greater lighting efficiency, David Parker said. (See below for more highlights.)

The energy strategies are part of the government’s broader response to climate change. They support greater development and use of renewable energy and uptake of energy efficiency, whilst maintaining security of energy supply.

The report was produced by the Ministry of Economic Development on behalf of the Senior Energy Officials Group and covers initiatives by 12 government agencies responsible for delivering the two strategies.

The first progress report covers the period from October 2007 to 30 June 2008, and can be accessed at www.med.govt.nz/nzes-publications

Other highlights include:

More than 14,000 homes were insulated with the support of grants and subsidies, 2.2 million subsidised energy efficient light bulbs were sold, and 3,455 old fridges were retired and recycled in a pilot programme
The Marine Energy Deployment Fund and Low Carbon Energy Technologies Fund were established and the first rounds allocated, and energy research funding was boosted further by $32.5m over four years in the May 2008 Budget
The Vehicle Fuel Economy Labelling scheme was launched, to require fuel consumption information to be provided at point of sale for new and second-hand cars, enabling purchasers to make more informed choices
The domestic sea freight strategy Sea Change was launched and the Seafreight Development Unit established to revitalise the domestic sea freight industry.

New opportunities for oil and gas exploration open

beehive.govt.nz — Tue, 23 Sep 2008 09:45:36 +1200

New opportunities for oil and gas exploration are opening up for Taranaki, Canterbury, Northland, and the East Cape of the North Island.

Following his announcement of nine new onshore Taranaki exploration permits, Associate Energy Minister Harry Duynhoven today announced that oil and gas
acreage currently reserved across the offshore Taranaki Basin and the onshore and offshore Canterbury Basin are soon to be opened.

The release of these areas with recognised petroleum potential means that recently relinquished acreage will be available for new potential explorers quickly. These areas will be open for "priority in time" (pre-notified) applications from 10 November 2008.

Planned blocks offer releases for deep water acreage in the Raukumara (East Cape) and Northland basins are also well advanced. These releases will be supported by significant Crown-funded data packs and are expected to be opened for assessment before Christmas.

"The response we received to the Taranaki blocks offer shows there is strong interest in exploration in New Zealand.

"The combined effect of these offers continues the momentum to realise gas reserves for our domestic market and to discover potentially large oil and gas reserves in our deep water basins," Mr Duynhoven concluded.

More information

See map for details of the pre-notified release of acreage across the offshore Taranaki Basin and onshore and offshore Canterbury Basin.

Further information can be obtained from the Crown Minerals website:

Oil and gas bonanza for Taranaki in the pipeline

beehive.govt.nz — Tue, 23 Sep 2008 09:38:13 +1200

Map of offshore Taranaki blocks

Map of Taranaki producing fields

Taranaki can look forward to a bonanza of new oil and gas exploration, Associate Energy Minister Harry Duynhoven said today, as he announced the awarding of nine new onshore permits for the region.

"This is great news both locally and nationally. The level of proposed activities will bring considerable economic benefits to New Zealand, and particularly the Taranaki region," Mr Duynhoven said.

"I am very pleased with the enormous interest received from both national and overseas exploration companies. Over 20 bids were received, and all but one block attracted bids. The nine permits awarded are the result of a very competitive blocks round.

"Over 20 wells are proposed to be drilled within the first five years, looking for shallow and deep targets and four of these are committed to be drilled within the first 24 months of permit award," Mr Duynhoven said.

New Zealand’s local explorers have accepted the challenge. Of particular note, Todd Exploration has partnered with Mighty River Power to explore a large permitted area in the west.

There are several new entrants from Australia partnering with existing explorers in New Zealand, such as Mosaic Oil joining local explorer L&M Petroleum.

"That these new players are willing to offer their expertise and commitment to New Zealand exploration shows how confident they are in realising the huge potential that is available," Mr Duynhoven said.

Other successful companies awarded permits are Hardie Energy Ltd, and Rawson (Taranaki) Ltd from Australia, which bid with Kea Petroleum Ltd; GB Energy Ltd (Australia) which bid with Green Gate Ltd; Greymouth Petroleum Taranaki Ltd and Greymouth Petroleum 2008 Ltd.

Further details of the onshore Taranaki blocks offer permit awards can be obtained on the Crown minerals website, here: www.crownminerals.govt.nz/cms/about/media-centre/onshore-taranaki-media-pack

Notes on successful bidders

Todd: Todd Exploration Limited is a privately owned company that, together with its parent company Todd Petroleum Mining Company Limited (known as Todd Energy), is involved in oil and gas exploration and production along with retailing of natural gas, LPG, electricity generation and solar water heating systems. Todd Energy has conducted petroleum exploration and mining since the 1950's and has more than 40 exploration and production technical staff who have a long history of exploration and production in Taranaki. However, the company has only recently become a permit operator.
Todd Energy has strong assets and reserves holdings within the Maui, Kapuni, Pohokura, Maari, Manaia, McKee, Mangahewa and Karewa oil and gas fields. The company also has interests in exploration permits in offshore Taranaki and the Great South Basin.
Mighty River Power: Mighty River Power Gas Investments Limited is a wholly owned subsidiary of Mighty River Power Limited. Mighty River Power Limited is a State-owned Enterprise with the primary objective of ongoing production and provision of renewable electricity energy to the country, based around the Waikato hydro schemes and geothermal schemes. Since 2002, Mighty River Power Limited has had interests in combined cycle co-generation and hence its interest in exploring for gas reserves.
Green Gate: Green Gate Limited is a privately owned company incorporated in New Zealand in August 2003. The company has an oil and gas exploration focus and currently holds operator interests in four New Zealand exploration permits. The technical support of the bid is provided by GeoSphere which is a consulting group led by Dr Mac Beggs. Dr Beggs has considerable petroleum industry experience and has been involved in numerous exploration ventures across the onshore Taranaki basin.
GB Energy: GB Energy Limited is a public company listed on the Australian stock exchange. The company has a 75% interest in two private non-operator oil and gas exploration companies in the Czech Republic and one private Uranium exploration company in Slovakia. GB Energy Limited also has a 33% interest in a UK public company. The company’s principle scientist is Dr Paul Robinson who is also a director of the company. Dr Robinson has experience in New Zealand and extensive exploration experience in Australia, Europe and Asia.
L&M: L&M Petroleum Limited is a New Zealand incorporated company, publicly listed on the ASX and NZX. The company holds four onshore petroleum exploration permits in the Western Southland basin and an interest in an exploration permit on the West Coast. The company has its focus on exploration for oil and gas and also on coal seam gas in its Southland holdings.
Mosaic: Mosaic Oil N L was incorporated in Australia in July 1987 and listed on the ASX in February 1989. Mosaic Oil has established itself as an oil and gas exploration company with considerable present day production interests in the Surat-Bowen Basin in South East Queensland. Additional exploration interests are held on the North West Shelf of Australia and Papua New Guinea through fully owned subsidiaries. As at March 2008, Mosaic Oil production was 1,125 BOEPD and forecast to increase from a major Surat-Bowen drilling programme on existing assets to over 2,000 BOEPD by December 2008.
Hardie Energy: Hardie Energy (NZ) Limited is a fully owned subsidiary of the Hardie Holdings Group and is the holding company for the group's energy assets. Hardie Holdings is the investment group of Australian-based New Zealander Duncan Hardie, with assets in excess of A$400 million, and involvement in major infrastructure projects including the now approved Queensland-Newcastle gas pipeline. Through other subsidiary companies the group has extensive assets in coal seam gas and petroleum exploration in NSW and two tenements in the Surat Basin and two in the Otway Basin as 50% partners with Rawson Resources.
Rawson: Rawson Taranaki Limited is a subsidiary of Rawson Resources Ltd. Rawson Resources Ltd is an energy resource company, listed on the ASX. The group has exploration holdings in the Surat Basin, Queensland; Sydney Basin, NSW; Otway and Cooper Basins, South Australia; and Pedrika Basin in Northern Territory along with mineral interests in South Australia. The Rawson Group is working closely with Hardie Energy and Executive Chairman Professor Conolly is an experienced Australian explorer.
Kea Petroleum: Kea Petroleum Limited is a wholly owned subsidiary of Rift Oil plc, but the shares are in the process of transfer to Dr DJ Bennett and W Treuren both of whom have a long term involvement in New Zealand exploration and onshore Taranaki in particular. The technical support for the bid is provided by consultant Roger Brand who has considerable experience in New Zealand and particularly the Taranaki region.
Greymouth Petroleum Taranaki Limited and Greymouth Petroleum 2008 Limited are fully owned subsidiaries of Greymouth Petroleum Holdings Limited (“GPHL”). GPHL is a privately owned energy resources company with significant interests in the Taranaki region, initially through purchase of the interests of Fletcher Challenge Energy in 2002 and later by the addition of further production and exploration permits to its portfolio. GPHL presently operates 6 mining permits in the Taranaki region and has a seventh under application. The group has recently obtained an exploration interest in Chile. In addition the group has interests in the Bonus Drilling Company and is closely associated with EXCONZ; a dedicated geosciences consultancy firm.

Leading the way in powering New Zealand

beehive.govt.nz — Wed, 17 Sep 2008 13:52:08 +1200

I have been asked to talk about the challenges the energy industry faces moving forward, and how the government is working to meet them.

I will start by talking about the government’s goals for the energy sector and the programmes we are putting in place to reach these objectives.

I will then talk about the policy instruments we are pursuing in setting the direction for meeting New Zealand’s future energy needs. Many of you will already be familiar with these, others less so.

New Zealand Energy Strategy and a Renewable Electricity Target

Our vision for the energy sector is set out in the New Zealand Energy Strategy, released last October. This Strategy fits within the government’s broader economic transformation and environmental sustainability agendas and sets out our vision for a sustainable, low emissions energy system.

Combined with the Emissions Trading Scheme, it aims to move the energy sector from more fossil-fuel based electricity generation to renewable energy alternatives.

We have set a target to reach 90 per cent of electricity from renewable sources by 2025, and we are already on the way to achieving that.

New Zealand currently has around 6100 megawatts of renewable generation capacity, and 3000 megawatts of fossil fuel generation, providing around 42,000 gigawatt-hours of electricity.

Electricity demand is expected to grow by 20 to 25 percent by 2025. Taking into account load factors, this requires approximately 3500 megawatts of additional generation capacity. Most of this needs to be renewable. In other words, we need around 175 megawatts of new renewable generation capacity per annum to reach our 90 percent target by 2025. 400 MW is under construction right now, and a total of 1400 MW is expected to be added over the next five years.

Geothermal

Three more geothermal projects have been, or are being, constructed this year by Contact Energy, Mighty River Power, and Top Energy. These will add 125 megawatts of generating capacity over the next two years. Three more plants totalling 350 megawatts have been consented in the central North Island, including Te Mihi which will provide over 200 megawatts alone and serve as a worthy replacement for the aging Wairakei stations from around 2011.

The reliability and relative abundance of geothermal energy sources in New Zealand means it will play an important role as a stable source of baseload generation. It is a proven technology, is economic and presents great opportunity for further innovation, particularly for low enthalpy direct use applications and deeper sources of geothermal energy.

Wind

Two more wind projects, in Manawatu and Wellington, are now under construction and are expected to deliver 188 megawatts. A further five wind farms, collectively totalling 313 megawatts, have been consented. To give you an idea of the interest in wind generation, 14 more projects, totalling another 2850 megawatts, are at various stages of the consenting process.

Hydro

New Zealand’s existing hydro capacity provides great balance for wind, but the government recognises that the most accessible hydro projects have already been completed. Nevertheless resource consents have been lodged for five South Island hydro projects that would deliver collectively up to 364 megawatts of capacity.

Commerce Amendment Bill

The Commerce Amendment Bill has just been passed and two changes to the Commerce Act contained in the Bill will be of interest to those of you involved in the electricity distribution business. They are:

· A much simpler and more predictable regime for lines businesses, removing the threat of relatively heavy-handed regulation for minor breaches of thresholds, and with time limits for Commerce Commission decisions; and

· A more appropriate regime of information disclosure for small locally consumer-owned electricity lines businesses where customers are essentially the owners of the business. This will lower their compliance costs and result in savings to consumers.

The changes represent a particular win for 100 percent consumer-owned electricity lines companies, which are currently subject to the same regulatory requirements as the large, investor-owned companies.

In future, they will only have to disclose information to the Commerce Commission, rather than meet the more demanding requirements faced by other electricity lines companies.

This is because they're owned by their consumers, which means that the businesses are more likely to act in the consumers’ interests. Excessive profit-taking is less likely, as the consumers are also the owners.

Nevertheless, protection for consumers lies in the provision allowing consumers of a lines business to petition the Commerce Commission to recommend to the Minister that the business be made subject to the same regime as non consumer-owned lines businesses.

There are special provisions applying to Transpower to recognise its unique position among lines companies.

Electricity Industry Reform Amendment Bill

Then there is the Electricity Industry Reform Amendment Bill. The purpose of this Bill was to implement three main policy changes.

The first was to make it easier for owners of lines businesses to sell the output of the generation they were permitted to own under the earlier amendments to the Reform Act – EIRA as we know it.

The objective is to encourage the owners of lines businesses to invest in permitted generation, especially generation from renewable energy sources.

In summary, this will be achieved by:

· Allowing sales of electricity of up to 100 percent of the nominal annual output capacity of permitted generation;

· Allowing electricity generated from permitted generation to be traded via financial hedges to manage spot market risks; and

· Lowering the cost of corporate separation and compliance with arms length rules.

The second main change was to narrow the scope of ownership separation by focusing on geographic areas where there is potential for the exercise of market power and anti-competitive practices – namely, where lines and supply are co-located.

This will be achieved by allowing owners of lines businesses to be involved in generation and retailing without limits outside of their lines area.

At the same time, ownership separation rules will be retained where lines and supply are located in the same area.

The third main change was to amend the definition of renewables.

Currently, the owner of a lines business can only invest without quantity limitations in “new renewables”, which are defined to exclude hydro and geothermal generation using traditional technologies.

The new definition will include all renewables, to reflect the government’s policy of encouraging the development of renewable energy.

Supply to rural customers

You will also be aware of our review of continuance of supply to rural consumers post 2013.

The obligation to supply to those places supplied as at 1 April 1993 was due to expire at the end of March 2013. Following consultation, we decided to revise section 62 of the Electricity Act so that this obligation to supply will no longer expire in 2013.

This continuing obligation to supply may be met either by using lines, or by alternative local generation where the local consumers agree.

We are allowing lines companies to meet this obligation in a more cost-effective way by providing the flexibility to accommodate new energy technologies as they become feasible and cost-effective in various situations.

This will remove anxiety for some rural communities. Maintaining security of supply is a priority and this applies to rural consumers just as much as to those in towns and cities.

Now that consumers will have that certainty, I hope to see lines companies and consumers focus on whether there are better ways to meet their energy needs – for example, utilising on-site renewable sources and improving efficiency.

Energy Efficiency

It’s encouraging to see the numerous commercial opportunities being presented in the development of renewable electricity generation and in demand-side management. This is particularly true in the areas of smart metering technology and other end-use efficiency measures.

There are also very significant gains to be made from improved efficiency of energy use and there is considerable potential for many of our businesses and homes to improve their energy efficiency.

The New Zealand Energy Efficiency and Conservation Strategy illustrates this point and we have many programmes underway to help New Zealanders improve their end-use efficiency.

Programmes for household energy efficiency particularly will receive a significant boost from the one billion dollar energy efficiency fund to be set up to complement the Emissions Trading Scheme. It is the biggest investment in energy efficiency this country has ever seen, and will help consumers adapt to electricity price rises.

Resource Management Act

To achieve our 90 percent renewables target, it’s essential for suitable renewable energy projects to gain resource consents.

Here are some statistics that demonstrate that the Resource Management Act is no barrier to renewable energy investment.

· 119 megawatts completed so far this year;

· 217 megawatts by the end of 2009; and

· 155 megawatts by the end of 2010.

A further 487 megawatts has been consented but construction has not yet commenced.

Transpower is investing $460 million in transmission during the 2008/09 year. Again, the Resource Management Act is not stopping this from being achieved.

For projects of national significance we can use the call-in powers that exist under the Resource Management Act to provide for a one-step hearing process under a Board of Inquiry or the Environment Court. These powers have been used for Transpower’s North Island grid upgrade, Unison Networks’ Te Waka wind farm proposal, and for Contact Energy’s Te Mihi geothermal and Waikato wind farm proposals.

We are providing guidance for local authorities on the importance of renewable energy, through a National Policy Statement on Renewable Energy. This will influence consent decisions as well as regional and local plans as they are revised.

The Policy Statement has been given to the Board of Inquiry and they have notified it for public consultation.

Two very important pieces of legislation have just been passed by the House - namely the Emissions Trading Scheme and the Biofuels Bill.

Emissions Trading Scheme

As you may have heard the legislation covering the Emissions Trading Scheme passed its third reading in the House on 10 September and is now set to become law.

It is landmark legislation and a very necessary tool to help New Zealand meet its international climate change obligations, so we can play our part in the global action to limit climate change.

It is a broad price-based measure that allows the market to seek the least cost means of reducing emissions.

Increases in emissions will cost and decreases are rewarded. Price changes will influence investment decisions and the purchase decisions of producers and consumers across the economy, driving emission reductions and expansion of more environmentally friendly alternatives.

The scheme will include every major sector of the economy, starting with forestry this year, stationary energy and industrial processes in 2010, liquid fuels (primarily transport) in 2011, and agriculture, waste and other sectors will follow in 2013.

We will continue to monitor the scheme to make sure its implementation is as fair and effective as possible.

Biofuels Bill

The Biofuel Bill was recently passed by Parliament. The legislation introduces the biofuels obligation from 1 October this year. It requires oil companies to supply biofuels in New Zealand, beginning at an amount equal to 0.5% of their annual petrol and diesel supplies and increasing in 0.5% increments annually thereafter to reach 2.5% in 2012.

To ensure that biofuels supplied towards the obligation deliver genuine environmental improvements, the legislation requires biofuels sustainability requirements to be introduced.

The Future for the Petroleum Sector

Although it is important to start the move away from our reliance on imported fossil fuels through biofuels and other substitutes, of course we will be dependent on oil for some time to come. There remains significant opportunity for the petroleum sector in delivering New Zealand’s future energy needs.

Oil

The petroleum production sector is looking particularly buoyant with four new major projects at or nearing fruition. As most of you are aware, New Zealand’s liquids production has been in decline since the Maui field peaked in 1997.

This is all about to change with the Tui, Maari, Kupe, and Pohokura projects. These projects will reach peak production by about 2010 and bring 140 million barrels of new reserves into the market. New Zealand’s total oil production will then be at a record level not seen since the heady days of Maui.

As you will know, over the past year or so, world oil prices have trended upwards, although Brent Crude has recently fallen back to below US$100 a barrel.

The prospects for the oil market provide opportunities for our economy and our companies who operate in this arena. In particular, the opportunities provided by the exploration and development of our under-explored hydrocarbon prospects are especially interesting.

The Great South Basin is one of our largest petroleum basins, covering approximately half a million square kilometres. The remoteness of the basin, the extreme weather, and water depths make exploration a high risk and costly activity.

In order to attract investment, the Government commissioned an extensive seismic survey of the northern section of the basin, the data from which was then offered freely to explorers.

The level of interest shown by major exploration companies is unprecedented for New Zealand.

The work proposed to be carried out in the first five years of exploration in the Great South Basin totals approximately 1.2 billion dollars. This is double the current total level of exploration expenditure all over the country – on and offshore.

Of course a major find would provide a very significant boost for the economy.

The next cab off the rank later this year will undoubtedly be the Raukumara blocks offer. Crown Minerals has previously expressed confidence that Raukumara has all the necessary components for hydrocarbon generation, migration and trapping mechanisms.

The Government is continuing to support oil and gas exploration, recognising that these resources will be required as part of our immediate and longer-term energy requirements.

Gas

Gas will continue to play an important, and possibly increasing, role in the industrial, commercial and residential sectors where the direct use of gas can offer advantages in terms of lower greenhouse gas emissions and reducing the load on the country’s electricity supply.

To underpin this commitment, the Government has outlined its objectives for the gas sector in the revised Government Policy Statement on Gas Governance released in April of this year.

This revised GPS was updated to take into account the New Zealand Energy Strategy and the updated New Zealand Energy Efficiency and Conservation Strategy.

Contact Energy has also announced its intention to develop gas storage at the depleted Tariki/Ahuroa field. This would be the first gas storage facility in New Zealand.

The Minister has approved rules to govern gas processing facilities, downstream reconciliation, and switching arrangements between retailers.

Regulations providing for an enforcement regime to promote compliance with the three sets of rules outlined above have been made regulations for the effective management of critical gas contingencies have been recommended to the Minister and are being processed as we speak.

The Minister has also approved a recommendation for the commissioning of an electronic matching platform for short-term wholesale gas trades. I am advised that the Gas Industry Company is very close to commissioning this platform and making it available to industry participants. The Government considers it will be important for industry participants to positively engage this initiative and to participate fully in delivering its success.

According to current projections, sometime between mid way of the next decade and 2025, a gas shortfall is indicated.

The Government’s current Onshore Taranaki Blocks Offer is therefore structured to maximise the chances of new gas being brought to market in a timely manner. I am advised that the results of this Blocks offer are due to be released shortly.

Coal

New Zealand’s lignite coal deposits are significant, particularly in Southland.

However, significant environmental challenges remain for New Zealand to maximise the use of its coal and lignite reserves. Substantial increases in the use of coal will not be favoured until technologies such as carbon capture and storage become viable.

Carbon capture and storage

Carbon capture and storage is a very important technology in order for the whole of the world to successfully tackle climate change.

A number of international research projects that are currently making progress on this issue but it will be some years before this technology is both economically viable and environmentally proven on a large scale.

Meanwhile, the government is closely monitoring developments in this space.

We have established a carbon capture and storage Policy Group, lead by the Ministry of Economic Development, and a Research Steering Group which includes industry participants who collectively have been tasked to examine the geological capacity of New Zealand to provide future carbon capture and storage capabilities.

New Zealand is also a member of a number of international partnerships and has applied to join the Carbon Sequestration Leadership Forum.

Summary

In summary, the government has set out a clear and achievable path towards a sustainable and profitable energy future.

We are lucky in our abundant natural resources, and these can form the backbone of a strong, resilient energy sector.

It remains essential for all parts of New Zealand’s economy and the energy industry in particular to continue to work together in maintaining the security of our energy supplies.

Over the next couple of days, you will hear from many prominent and influential figures from across the energy sector, both here in New Zealand and from a wider international context.

I hope you will contribute to the discussions on a variety of energy related issues and to consider how you can contribute to achieving New Zealand’s energy demands and environmental obligations.

Renewable generation gets boost from law changes

beehive.govt.nz — Fri, 05 Sep 2008 16:49:03 +1200

Unnecessary barriers to electricity lines companies investing in renewable generation have been removed by a Bill amending the Electricity Industry Reform Act passed in Parliament today, Energy Minister David Parker said.

The Bill is a major rewrite of the Electricity Industry Reform Act, which requires separation of monopoly electricity lines and competitive generation and retailing businesses.

“The amendments made by this legislation will contribute to achieving the government’s 90 percent renewable energy target by 2025, which is a major plank in the New Zealand Energy Strategy and in the fight against climate change,” David Parker said.

“Electricity lines companies have an important role to play in developing the country’s renewable energy sources, especially smaller renewable projects in their area.

“The changes to EIRA will reduce uncertainty for lines companies investing in renewable generation by enabling them to sell the energy they generate directly to consumers.”

While lines companies are already able to own some types of renewable generation in unlimited quantities, the new legislation widens the definition of renewables to encompass geothermal, wind, hydro and others. It’s expected that local lines companies will invest in some of the smaller projects that are not of interest to the larger generators.

It also makes it easier for lines businesses to get back into retailing by allowing them to:
• Sell 100% of the nominal output of their generation to their own consumers
• Trade in financial hedges without restriction to manage risks
• Own generation and retail without limit outside their lines area.

The risk of monopoly lines businesses competing unfairly in retail markets is managed by retaining the requirements for corporate separation and compliance with arms-length rules, but the Bill lowers the costs of compliance.

See attached Q&As

Legislation passes to enable sustainable biofuels

beehive.govt.nz — Wed, 03 Sep 2008 21:35:56 +1200

Energy Minister David Parker today welcomed the passing in Parliament of the Biofuel Bill, which he said would stimulate the market for sustainable alternative transport fuels.

“I’d like to thank the Progressive Party, Greens, New Zealand First, the Maori Party, United Future and Taito Phillip Field for supporting this legislation,” David Parker said.

“This broadly supported step is important in moving New Zealand away from a dependence on imported fossil fuels, and towards renewable alternatives with lower greenhouse gas emissions.

“I know several businesses with plans to invest in this new industry in New Zealand and create new jobs, who will breathe a sigh of relief to hear this bill has passed.

“This legislation allows for an increasing proportion of New Zealand’s transport fuel to be produced locally, from by-products of the dairy or beef industry, and in the future from wood and grasses grown on marginal land, or from algae from sewage ponds.

“The introduction of biofuels is a forward-looking move which will start to free New Zealand from the tyranny of the international oil market, and may even reduce the cost of fuel to consumers. Gull Petroleum is already selling biofuels at less than the cost of a similar non-biofuel product.”

The legislation introduces a biofuels sales obligation which means that biofuels will have to make up 0.5 percent of oil companies’ sales this year, with obligation levels rising by 0.5 percent increments to 2.5 percent in 2012.

The bill contains sustainability principles which will make sure biofuels sold towards the obligation will:
• Emit significantly less greenhouse gas over their life cycle than fossil fuels
• Avoid negative impacts on food production
• Do not reduce indigenous biodiversity or adversely affect land with high conservation values.

“I would particularly like to thank the Green Party for their assistance in formulating these sustainability principles,” David Parker said.

The requirements necessary to achieve these principles will be specified through an Order in Council, which the Minister of Energy must recommend as soon as possible.

Safety, Leadership and Culture to 2020

beehive.govt.nz — Thu, 21 Aug 2008 16:48:28 +1200

Today I would like to touch on a number of issues and challenges facing both your industry and government, particularly focussing on the area of safety.

Although there are always dangers and risks in the use of electrical energy, there is no reason why these cannot be managed effectively to protect those working in the industry.

We all recognise that safe working practices and having a safety culture are critical.

The challenge for the electricity industry is to lead by example when it comes to safety.

Government also has a key role to play in terms of its leadership through the development of legislation and regulations to improve safety outcomes.

Within the Ministry of Economic Development, Energy Safety will continue to work with industry partners to promote energy safety within the gas and electricity industries, while also encouraging industry innovation.

The Department of Labour and the Electrical Workers’ Registration Board also have a role to play in improving safety performance in the electricity supply industry and reducing the number of worker accidents.

Improving safety performance is a partnership, between you, your staff and government.

An area where improvements need to be made is in addressing the accident rates in the electricity supply industry.

As you know, as Associate Minister of Energy, I have responsibility for energy safety.

I share your concerns about the number of accidents that occur in the electricity supply industry involving electrical workers, and more particularly. line workers.

While the overall number of accidents involving these workers has been declining over the last decade, I am concerned about the recent upward trend in fatal accidents.

We all recognise that the working environment for line workers and mechanics involves a high level of risk that is rarely seen in other work places. It is dangerous work.

Few jobs have people working in close proximity to high voltage lines or working at the heights line workers do. This is why we all agree that safety must be paramount.

Although there is a relatively low level of incidents, the consequences of accidents, in terms of death and serious harm, is high.

After a period of no fatal accidents in the early 2000s we have seen seven fatal accidents in the last four years. Let’s not forget the serious injury accidents that have also occurred during this recent period.

The challenge for the electricity supply industry and government is to reverse this trend.

There have been, and continue to be, a range of initiatives to raise overall awareness around safe practice for electrical works. It is clear, however, that more needs to be done.

A number of areas where improvements in safety can be made, have been identified, not only by yourselves, but also by Energy Safety, the Department of Labour and the Electrical Workers Registration Board.

I understand the EEA has identified that supervision is key to behavioural change and that you are working towards running safety workshops to address this issue.

However, while competency training and documentation generally appear to be comprehensive and adequate, the work practices and behaviour of some electrical workers in the workplace can be inadequate.

At times competent and experienced workers are failing to follow safe work practices.

Improved supervision and better safety auditing are required, both by employers, as the service providers, and electricity distributors as the network asset owners.

While having expressed concerns about the accident rates in the electricity supply industry, I do believe the general safety culture is reasonably good. But of course there is always room for improvement.

As leaders you have a responsibility, and a key role to play, in continuing to develop and improve the safety culture within the electricity supply industry. The EEA has identified that improving the safety culture within your industry is critical.

I am pleased the EEA is showing its commitment to improving safety performance in the electricity industry and that you are taking leadership and an innovative approach to dealing with safety issues. I congratulate you on the work you are doing.

You have already produced the draft Guide to Power Systems Earthing Practice, on which I understand you have recently completed consultation. I look forward to this being rolled out to the industry when it is finalised.

You have also developed a health and safety strategy - Electricity Supply Industry Workplace Safety Strategy 2020 - which will be the key focus for this workshop and contribute significantly to the discussions you will be having today.

I welcome this strategy and the initiative you are taking. It outlines your industry’s health and safety vision, aims and aspirations, extending to 2020.

The statement identifies key areas for actions to fulfil these aspirations. I am pleased to see the strategy is a living document that will be regularly reviewed.

It shows the EEA is taking action and is committed to improving safety, and sets out how you are going to achieve this over the next decade.

I am also pleased that you are taking an inclusive approach and welcoming comment or suggestions from industry, regulators and other stakeholders.

Looking to the future, government also has work ahead of it, in terms of developing and implementing the new electricity regulations.

I would like to take a few moments to give you an update on where things are at with the development of these regulations.

As you know last year the Ministry of Economic Development released two discussion papers on the proposed safety regulations for electricity and gas.

EEA has fully engaged in the process of the development of the electricity regulations. You have not only had input into areas that concern you directly, such as the development of the regulations relating to Safety Management Systems (SMS), but you have also provided valuable input into other aspects of the regulations.

I want to thank your industry for your input and the significant contribution you have made to the process so far.

I am pleased to be able to tell you that this week Cabinet approved the policy decisions on the electricity regulations.

The process from now is that drafting instructions will be prepared by the Ministry of Economic Development for the Parliamentary Counsel Office, who will then prepare the draft regulations. The aim is to have an ‘exposure draft’ available for discussion with industry and consumer representatives.

MED plans to consult with industry once the ‘exposure draft’ of the regulations is available, giving you the opportunity to provide further valuable input and comment. This is quite an unusual step at this stage of the process, and does not happen very often in New Zealand.

It is difficult to say how long this process will take. As you can imagine the proposed regulations are technically complex, so it could take some time at the drafting stage, and also this work needs to fit in with other priorities at the Parliamentary Counsel Office.

But, what I can say, is that we are on the home straight. It has been a long process since the development of Energy Safe to where we are now.

Of course, as is the case with all new regulations, there will be an implementation and transition period once they have been made. This will ensure that industry has the time to put things fully in place before the regulations come into effect.

Over the coming months MED will keep you informed on progress.

Finally, I would like to take this opportunity to personally thank you for your industry’s hard work and dedication when endeavouring to restore electrical supply to many thousands of New Zealanders during the recent stormy weather.

This was a difficult time for all and the situations your staff faced while doing this work was challenging to say the least.

Following an incident to a line mechanic during the storms, it was timely and appropriate that a safety alert was sent out through the EEA to remind companies that safety of persons takes priority over restoration of supply.

I wish you well with your workshop.

Major step towards greener energy by 2025

beehive.govt.nz — Wed, 13 Aug 2008 14:57:36 +1200

Providing for the country’s energy needs now and into the future while reducing New Zealand’s impact on the environment is the goal of the government’s proposed National Policy Statement for Renewable Electricity Generation announced today.

Environment Minister Trevor Mallard and Energy Minister David Parker said today’s announcement was aimed at helping achieve the Labour-led government’s goal of generating 90 per cent of the country’s electricity from renewable sources by 2025.

“How we provide for our energy needs into the future is a key climate change issue,” David Parker said.

“We must move away from the technologies of the past to the technologies of the future if we are to reduce our impact on the environment. Those technologies are likely to include wind, geothermal, solar, tidal and hydro.

“This proposed National Policy Statement will encourage the development of a diverse and resilient energy sector and create more confidence for investors in renewable electricity generation projects.”

The proposed statement will give guidance to Resource Management Act (RMA) decision makers such as councils, who must balance the national benefits of renewable electricity generation projects with local considerations.

“We’ve always said that our 90 percent renewables target does not require damming every river and putting wind turbines on every ridge line,” Trevor Mallard said.

The National Policy Statement on renewable energy announced today would require local authorities to consider the ‘reversibility’ of effects of new renewable generation.

“Obviously, the effects of damming a river are far greater than erecting wind turbines. Large dams usually mean major permanent changes to water courses, with significant impacts on wildlife and ecosystems.

“Our rivers are a resource not only for potential hydro generation but also for fishing, recreation, tourism and as a habitat for native species.”

The proposed National Policy Statement will encourage small-scale development of renewable electricity generation projects and reduce rural communities’ dependence on the national electricity grid by, for example, making it simpler to set up small renewable energy sources such as a wind turbine in the backyard.

“The government has already done major work in this area through the New Zealand Energy Strategy and the announcement of an Emissions Trading Scheme to price carbon emissions. This policy statement is another significant stage in what is one of the key challenges facing the planet,” the Ministers said.

(See below for a table summarising planned renewable energy projects.)

The proposed national policy statement is now ready to go to an independent Board of Inquiry, also announced by the government today, for public consultation. See this website for more information: http://www.mfe.govt.nz/rma/central/nps/generation.html

Planned renewable electricity developments (as at August 2008)

	Projects with RMA consents and under construction	Projects with RMA consents - not yet under construction	Applied for Consent	Proposals
Wind	189 MW	313 MW	2411 MW	787 MW
Hydro	13 MW	93 MW	343 MW	895 MW
Geothermal	260 MW	80 MW	225 MW	388 MW
Biogas	0 MW	0 MW	0 MW	2 MW
Biomass	0 MW	0 MW	0 MW	0 MW
Marine	0 MW	1 MW	200 MW	0 MW
Total	462 MW	487 MW	3179 MW	2072 MW

Source: Ministry of Economic Development

FACT SHEET

The Government’s work programme on electricity related issues

Additional to the NPS announced today, the government is also undertaking work in the following areas:

National Policy Statement on Electricity Transmission 2008

The National Policy Statement on Electricity Transmission was issued in March this year. It is a statement from central government to recognise the national significance of the national grid in RMA plans and decision-making. It is a high-level framework that gives guidance across New Zealand for the management and future planning of the national grid.

National Environmental Standards on Electricity Transmission in development

The Ministry for the Environment is currently developing two national environmental standards for electricity transmission (NES). The standards aim to provide national consistency in how electricity transmission activities are managed, assisting councils in implementing the NPS and providing for an increased national security of supply by protecting the national grid.

Non-statutory guidance in development

The Ministry for the Environment is developing non-statutory guidance for RMA decision makers to assist in the implementation of national policy statements and national environmental standards.

Additional Government activity and funding support on electricity related issues

The 2007 New Zealand Energy Strategy to 2050
The 2007 New Zealand Energy Efficiency and Conservation Strategy
The 2007 announcement of an Emissions Trading Scheme which will price carbon emissions, including in the energy sector
Marine Energy Deployment Fund to bring forward the development of marine energy in New Zealand
EECA business programme to develop more energy efficient and competitive businesses including joint ventures to develop energy best practice with industry groups, and workplace education
Energy Star Rating Labels
The EnergyWise Home Grants programme to provide grants and advice for warmer, healthier and more energy efficient homes including grants to landlords for upgrading rental properties.
Home Energy Rating Scheme (under development )
The Solar water heating programme to encourage the uptake of solar water heating
Building Code review
2004 Amendment of the RMA to ensure renewable energy is taken into account in decision-making under the RMA
The Govt³ programme supports government agencies to become more sustainable.

The future for gas

beehive.govt.nz — Fri, 08 Aug 2008 17:40:11 +1200

Address to the Gas Industry Company conference
10.30am, 8 August 2008, Te Papa, Wellington

Good morning. I’d like first to offer my thanks to the Gas Industry Company for inviting me to speak to you today.

I intend to start by discussing the role of gas in the broader energy context, before talking in more detail about the Government’s objectives for the gas sector and our expectations for the Gas Industry Company and gas industry participants in meeting these objectives.

New Zealand Energy Strategy

As you know, the government released the New Zealand Energy Strategy last October. This Strategy sets out the government’s vision for a reliable and affordable energy system which provides sustainable, low emissions energy.

The world now accepts the need to reduce greenhouse gas emissions. New Zealand must play its part too.

As part of the Energy Strategy we have set a target to have 90 percent of our electricity coming from renewable sources by 2025. Our view is that all new generation should be renewable, except to the extend needed to ensure security of supply. New Zealand has plentiful supplies of geothermal and wind which makes this both achievable and affordable.

The government however does not favour substantial increases in the use of gas (or coal) for electricity generation until technologies such as Carbon Capture and Storage (or CCS) can provide low emissions supplies of energy from fossil-fuelled electricity generation.

We intend to reach our renewables target with a mixture of policies both to incentivise and to regulate.

Emissions Trading Scheme

To create incentives to invest in low-emissions alternatives, we are introducing the emissions trading scheme.

Put simply, the ETS will make it more expensive to behave in ways that increase emissions and make it relatively cheaper to behave in ways that don’t. Increases in emissions will cost and decreases are rewarded.
Price changes will influence investment decisions and the purchase decisions of producers and consumers across the economy, driving emission reductions and expansion of more environmentally friendly alternatives.

The scheme will include every sector of the economy, starting with forestry and followed by stationary energy and industrial processes in 2010, liquid fuels – primarily transport – in 2011, and agriculture, waste and other sectors in 2013.

10-year restriction on new baseload thermal generation

The Emissions Trading Scheme, as you know, is now before the House.

The Bill includes provisions to amend the Electricity Act to limit new baseload fossil fuel generation over the next ten years.

It creates a 10-year restriction on the construction of fossil fuel thermal generation above 10 MW whose fuel source contains more than 20 percent fossil fuels.

Exemptions to the restriction will be allowed under specific criteria.

The Emissions Trading Scheme by itself would not have precluded growth in fossil fuelled thermal.

For instance, if gas prices led to electricity prices marginally below the cost of renewables, because of our size it would only have taken a handful of new gas plants to take us along a largely non-renewable path.

This path would lead to higher emissions and would not result in significantly lower electricity prices.

We consider that investment in a major new fossil-fuelled plant during the next ten years would not be consistent with our vision of transitioning to a sustainable low emissions energy system.

The pricing of emissions, together with the renewables preference, will give a strong signal to investors that they should build renewables rather than more gas or coal-fired stations.

Currently, over 400 megawatts of generation is under construction – all of it renewable. Over the next five years we are expecting around 1400 megawatts of new generation. Over half of it is geothermal and almost all of it is renewable.

Not doom and gloom

Of course the flip side of a greater focus on renewables in electricity generation is a lesser focus on fossil fuels.

So what does this mean for the petroleum sector? It clearly does not mean ‘doom and gloom’.

Industrial demand has already increased, with Methanex having substantially increased their New Zealand production.

Fossil fuels, especially gas, will continue to have a critical role for some time to come.

They provide security, versatility and stability in the delivery of electricity.

The gas sector has an important role to play in achieving the government’s objective of maintaining security of energy supply at competitive prices as the country makes the transition to a sustainable energy future.

Contact Energy is intending to build a 200 megawatt peaking plant at New Plymouth. E3P and other gas-fired plants have a continuing need for gas. Huntly could use more.

Gas will continue to play an important role in the industrial, commercial and residential sectors where the direct use of gas can offer advantages in terms of lower greenhouse gas emissions and reducing the load on the country’s electricity supply.

There is still considerable opportunity for gas, and the relative economics of gas against coal will improve under the Emissions Trading Scheme.

Gas supply / demand balance

The world is beginning a transition away from the domination of fossil fuels to other energy sources, however that transition will take decades.

There is still going to be a demand for gas for domestic, industrial and commercial use, as well as for gas-fired electricity generation needs.

The government continues to support and stimulate exploration for oil and gas reserves. Our recent successes in this area will help to ensure that we can use our indigenous resources, rather than imports.

In the short to medium term we have sufficient supplies of gas for New Zealand’s needs. Of course the longer the projection period, the less certain the supply/ demand balance is, as a consequence of the wider possible range of future demand and supply.

We have the Pohokura field, which is less than a third the size of Maui, and the Kupe field is planned to be producing sometime in 2009.

According to current projections, sometime between mid way of the next decade and 2025, more gas supplies will be needed.

Should new gas supplies be found outside the Taranaki basin, the issue of moment then becomes delivery or export infrastructure. It seems likely that gas will be found as a by-product of oil. If found in quantity, it remains to be seen whether it will be most profitably used in New Zealand or whether in future it is exported by developers.

Gas infrastructure is concentrated in the Taranaki region simply because that is where gas resources have historically been seriously explored for and developed with existing processing and pipeline facilities.

The Government’s current Onshore Taranaki Blocks Offer is structured to maximise the chances of new gas being brought to market in a timely manner. I am advised that the results of this Blocks offer are due to be released shortly.

Government Policy Statement on Gas Governance (GPS)

The government has outlined its objectives for the governance of the gas sector in the revised Government Policy Statement released in April this year.

This revised GPS was updated to take into account the New Zealand Energy Strategy and the updated New Zealand Energy Efficiency and Conservation Strategy and also to reflect general changes that have taken place since the last GPS was published in October 2004.

The key challenges for the gas industry, however, remain similar to those in 2004. Namely the need to improve gas transmission and wholesale arrangements to ensure that our gas transmission and distribution networks can handle the transition from a long-term, stable gas supply to a more diverse supply.
I note Contact Energy’s announcement to develop gas storage at the depleted Tariki/Ahuroa field. This would be the first gas storage facility in New Zealand and is a timely development which will provide much needed flexibility to the market.

Another major challenge for the gas industry is to meet consumer expectations in light of ever increasing energy costs. Many of the objectives in the GPS aim to ensure consumers get a fair deal.

These include:

Contractual arrangements between gas retailers and small consumers to adequately protect the long-term interests of small consumers
Greater clarity on the type of consumer complaints resolution system the Government is seeking
An efficient market structure for the provision of gas metering, pipeline and energy services
The respective roles of gas metering, pipeline and gas retail participants are able to be clearly understood.

In addition, the revised GPS seeks advice on the extent to which policies to enhance the direct use of gas in industrial, commercial and residential applications could mitigate greenhouse gas emissions and the likely costs of implementing those policies.

The co-regulatory model to date

The co-regulatory arrangement commenced with the established of the Gas Industry Company in 2004. As the approved industry body, the Gas Industry Company sought to draw on industry expertise while providing appropriate government oversight.

As a relatively young organisation I am pleased with the progress Gas Industry Company has made to date and I thank the Chair, Board members and CEO in particular for their efforts. Rules have been developed and approved to govern gas processing facilities, downstream reconciliation, and switching arrangements between retailers.
Regulations providing for an enforcement regime to promote compliance with the three sets of rules outlined above and for the effective management of critical gas contingencies have been recommended to me and are being processed as we speak.

I have also approved the Gas Industry Company’s recommendation for the commissioning of an electronic matching platform for short-term wholesale gas trades. I am advised that the Gas Industry Company is very close to commissioning this platform and making it available to industry participants.

All of this is commendable and I would like to also thank industry participants for the amount of work completed to date.

However the job is not yet finished. The rules and recommendations that have been approved need to be implemented. It is only then that we will be able to determine whether the government’s objectives are being satisfactorily met.

Likewise, significant work remains to be done with regards to transmission and distribution arrangements, consumer outcomes and retail arrangements, and examining whether policies to enhance the direct use of gas would mitigate greenhouse gas emissions.

To take just one area of work, I am aware of the various governance, interconnection, balancing and capacity trading issues related to transmission access arrangements. Each of these issues is highly technical and may prove quite contentious given the commercial interests at stake.

Continued success

For the co-regulatory regime to succeed it will require ongoing industry buy-in, the Gas Industry Company to listen and remain cognisant of industry concerns and the timely consideration of recommendations by relevant government agencies.

In summary, fossil fuels are going to play an important role in the world’s economy for some time to come. New Zealand has valuable resources which will continue to be profitable.

Thank you once again for the invitation to speak to you today. I trust you will have an interesting conference.

EECA Board appointments announced

beehive.govt.nz — Fri, 08 Aug 2008 11:59:51 +1200

Energy Minister David Parker today announced three appointments to the Energy Efficiency and Conservation Authority (EECA) Board.

The Deputy Chair, Alastair Patrick, has been reappointed for a term of three years
Joel Cayford has been appointed as a member for three years
David Caygill, has been cross-appointed as a member until 7 October 2010, to coincide with the conclusion of his term as Chair of the Electricity Commission.

Alastair Patrick has been a member of the EECA Board since June 2005.

Mr Parker said. “Mr Patrick has extensive central government experience and is an expert in transport policy and infrastructure.”

Joel Cayford has significant experience in local government processes, including corporate governance as Chair on both the Auckland Regional Council’s Transport Policy Committee and the North Shore Council’s Works and Environment Committee.

The purpose of David Caygill’s cross-appointment is to facilitate an effective working relationship and coordination of programmes and information-sharing between the Electricity Commission and EECA.

"Mr Caygill will make a valuable contribution to the EECA Board,” Mr Parker said. “He has a mix of legal, regulatory and governance experience as well as a deep understanding of the electricity sector."

The two new members replace Russell Longuet and Dennis Parker (no relation to the Minister), who have come to the end of their second terms. Mr Parker thanked the two retiring members.

"I want to take this opportunity to acknowledge the valuable contribution these members have made to the Authority and its work programme. During that time the Authority has made significant progress on many major issues, including in developing the New Zealand Energy Efficiency and Conservation Strategy and liaising with business."

The other five Board members are Roger Sutton (Chair), Andrew Pearce, Greg Sise, Penelope Hulse, and Toni Owen.

Further background information:

Alastair Patrick is currently a contractor for Beacon Consulting, which provides high level consulting services focusing on border security agencies. Services provided include information systems strategy, programme and project management, procurement, sourcing, business process improvement and technology architecture. Between 1991 and 2003 Mr Patrick worked for the Ministry of Transport, the last three years as Manager of Infrastructure and Services.

Joel Cayford has a PhD in physics and specialist knowledge of waste and recycling industries, network utility economics and function, and urban planning and development processes. He also has a background in commercial negotiation, community service and campaigning.

David Caygill has extensive governance experience through serving on numerous public and private sector boards and as an industry regulator in his former role as Deputy Chair of the Commerce Commission. His extensive electricity sector experience includes chairing the Ministerial Inquiry into the Electricity in 2000, chairing the Grid Security Committee and chairing the industry’s attempt at establishing self-governance through the Electricity Governance Establishment Committee.

Marine energy generation fund open for applications

beehive.govt.nz — Thu, 31 Jul 2008 16:27:59 +1200

Round two of the four-year government funding initiative to kick-start the deployment of marine energy generation devices in New Zealand opens today.

Energy Minister David Parker is calling for interested parties to apply for funding from the Marine Energy Deployment Fund, which is offering grants of up to $2 million a year over four years.

“New Zealand’s waves and tides are a world-class resource for energy generation, so there’s a huge untapped potential for us to harness that energy. We want to help get marine energy generation devices into the water to give us some practical experience of what works in the New Zealand environment.”

Marine energy could contribute to government’s target of 90 percent renewable electricity for New Zealand by 2025, David Parker said. Currently around 60-70 percent of our electricity is from renewables.

“Marine energy will play an increasingly important role in our electricity network. It will also contribute to a more diverse mix of renewables, which means better security of supply for our country.”

The first Marine Energy Deployment Fund grant of $1.85 million was recently awarded to Crest Energy for a tidal stream generator project at the entrance to Kaipara Harbour, north of Auckland, subject to resource consents being obtained.

“We’re looking forward to supporting more projects like this to take marine energy generation another step closer to commercial reality in New Zealand,” David Parker says.

The Marine Energy Deployment Fund is contestable, which means individuals or organisations will have to apply for funding. Applications will be assessed by an expert panel, with funding offered to appropriate projects that best meet a number of criteria. Applicants will be expected to supplement any grants with commercial investment.

Applications for the second funding round close on 24 November 2008 and decisions will be made by 30 May 2009.

Full details of the Marine Energy Deployment Fund including the criteria, guidelines and application form are available on the EECA website.