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.