Friday, August 24, 2007

Closing Huntly

Genesis Energy announced today in passing that it is planning to move the 1000 MW coal-fired Huntly power station to reserve over the next ten years. This is a good move - Huntly was resonsible for 4,942 MTCO2-e in 2005 - 6.4% of our total gross GHG emissions. Shutting it down completely would solve our Kyoto CP1 deficit overnight. Unfortunately, it would also leave us with a major electricity shortage, so it will have to be progressively shut down as it is replaced by renewables and more efficient gas-fired generation. The question now is how quickly we can do that - how quickly we can get those consented windfarms built and generating.

A side-effect of this however is that the economic impact of a dry year on electricity prices is going to be much higher - if Huntly generates less, its electricity will have to cost more if it is to pay for itself. Major electricity users therefore have a big incentive to invest in energy efficiency, and in hedging. Unfortunately, that sort of forward thinking seems to be beyond our business community; instead, they'll wait for a crisis, then squeal loudly for the government to bail them out by approving cheap, dirty generation so they can enjoy their supposed right to environmentally subsidised electricity.