Thursday, October 19, 2006



Gas for Auckland?

Contact Energy have called for tenders for their proposed 400 MW gas-turbine at Otahuhu. The power station would produce base-load electricity to ensure Auckland can meet its soaring demand. However, as the Greens point out, it will also emit 1.14 million tons of CO2 a year, costing the taxpayer $34 million every year at current carbon prices. That's $170 million over CP1 - a substantial fraction of our estimated $656 million cost of meeting our Kyoto obligations.

All things considered, I far prefer gas to coal. Otahuhu C will be an efficient, modern power station which will produce almost twice the output of Marsden B while producing only half the emissions. At the same time, we should recognise that it costs us money. That $34 million a year represents a substantial transfer of wealth from the taxpayer to Contact's shareholders, adding 6 cents a share (around 20%) to their annual dividend. And that is simply not something we should be doing. If companies want to emit greenhouse gases, they should be forced to pay the full cost of doing so, rather than being allowed to simply dump those costs on the taxpayer while their shareholders laugh all the way to the bank.

6 comments:

$34m pa!!!! Chickenfeed compared to the vast sums "Liarbore" have stolen off the taxpayer...no?

Or have I just had a kiwiblog education?

Sad how serious comments like this, and others that you have clearly put a lot of work into (and are WELL worth the read thank you) get virtually ignored, while anything to do with the right-wing "outrage de jour" gets dozens of noisy little deposits.

Posted by Philip Wilkie : 10/19/2006 07:53:00 PM

There is an argument that gas is a versatile direct heating fuel, chemical feedstock and transport fuel. Coal on the other hand is basically only good for burning and can only be converted to a more useful form (e.g syngas) through an expensive and energy inefficient process.

Which would point to using coal before gas.

Of course we could generate *all* the power NZ needs from hydro and wind - we'd just have to accept the alteration of a few landscapes.

Posted by Rich : 10/19/2006 08:43:00 PM

Philip: its the perenial state of blogdom. Highly partisan issues get comments, wonking and serious research don't (unless they can be used to spin some highly partisan point). But wonking is what I like to do, and its always enjoyable when people show some interest.

Rich: unfortunately, coal is just too filthy, and those wanting to burn it show no sign of using technology which would make it marginally less filthy (not to mention more efficient).

I think I want Otahuhu C to go ahead - but at the same time I want that externality internalised, either through emissions trading or regulation for offsets (as we very briefly had in the 90's, after the Stratford decision). But we really shouldn't be handing a fat environmental subsidy to a private company, and enriching its shareholders at the expense of the global environment and New Zealand taxpayer.

(And yes, at the same time I also want to see more renewables - but gas is likely to have a role at minimum for peak load, and so I want it to be the cleanest, most efficient gas possible, as well as dealing with its emissions).

Posted by Idiot/Savant : 10/20/2006 01:28:00 AM

We don't have any pumped storage in NZ do we? It does a good job at dealing with peak loads - I think it's usually used with a nuclear generator - which have very little flexibility in output.

Posted by Rich : 10/20/2006 12:55:00 PM

Rich: not explicitly, but effectively we do to the extent that wind allows our hydro dams to avoid using water. And one of the windfarms currently in the pipeline - Trustpower's Mahinerangi project - would be explicitly linked to an existing (small) hydro scheme so as to effectively store power for later.

Posted by Idiot/Savant : 10/20/2006 01:07:00 PM

So, let's see:

* Hydro is unavailable because NZ doesn't have many more water sources that can be altered to generate power...check.

* Coal is just plain nasty to use as a fuel to generate electricity, even though modern supercritical coal-fired power stations include modern flue gas desulphurisation systems, which home-based coal burners could never use due to scale...check.

* Wind is so economically marginal that Meridian have significantly scaled back their "Project White Hill" at Mossburn (the project was greenlighted in its reduced form only after the Govt granted Meridian $9m in carbon credits); also, very few sites exist where wind is stable enough to generate electricity...check.

* Nuclear [gasp!] has no greenhouse gas pollutants, and is many orders of magnitude more efficient than fossil-fuel or bio sources, but merely uttering the word causes people to fall all over themselves to condemn it - never mind that Japan, which has roughly the same land mass as NZ, is powered by over 25% nuclear sources...check.

But...but...no one complained when the Govt gave Meridian $9m in subsidy (i.e., carbon credits) to build White Hill.

So, if gas is a greenhouse no-no, coal is a double greenhouse gas no-no, there are no hydro sources left, and wind offers very little replacement value (never mind that wind turbines play hell with bird migrations), I have to wonder: where in the hell do these people expect that they will get their energy generation from?

There is precious little geothermal available, and barring the solution posed in the famous Tui commercial with "Daisy" the cow, there are no other sources available for large-scale power generation in New Zealand.

Meanwhile, China and India, comprising almost 40% of the planet's entire population, have no care or responsibility to follow Kyoto.

Unreal.

Posted by Wanderlust : 10/24/2006 02:14:00 AM