Thursday, September 20, 2012

Why we need the thermal ban

Charles Chauvel's Electricity (Renewable Preference) Amendment Bill was drawn from the ballot today. The bill seeks to restore Labour's 10-year moratorium on the construction of new thermal electricity generation. its an old bill, which has been before the house (and been voted down) before. But with its revival, its worth looking again at why we need it.

The biggest and most important reason - and the reason why the ban was imposed in the first place - is climate change. Thermal generation - coal and gas - was responsible for 23% of our total electricity generation last year (figures from the latest New Zealand Energy Quarterly), and is responsible for roughly 5.5 MTCO2-e of emissions - 7 to 7.5% of our total. And that's in a good year. Most of those emissions are locked in for the foreseeable future: power plants last 40 - 50 years, and we had a spurt of construction of gas-powered generation in the 1990's. So, if we want to eventually reduce those emissions, the first task is to make sure they don't get any worse, while ensuring that there is enough clean generation to take up the slack.

The second reason is the energy strategy [PDF]. Labour committed to, and National retained, a goal of 90% renewable generation by 2025. But National has no actual policies to achieve that goal - it thinks the market will do it magically all by itself. Meanwhile, current projections show that we will miss that target, thanks mainly to the continued construction of new thermal generation.

Meanwhile, we have wind and geothermal industries which are competitive, and which are already providing most of the new generation being constructed each year. But those industries face the risk of being monstered by a new gas plant, which would flood the market while locking in high emissions.

The answer to the problem then is pretty obvious: stop people from building new thermal generation. This won't result in a shortage of supply, because we have plenty of wind and geothermal on tap (we have over 2.5GW of wind projects already consented; all we need to do is build them). And it won't result in higher retail electricity prices (to the contrary - wind lowers prices to consumers because it displaces expensive thermal generation from the top of the dispatch curve). But it will ensure that we cap, then reduce our thermal electricity emissions, while moving to a much more sustainable electricity system. And in the current environment, with dwindling fossil fuels and climate change rocketing out of control, that looks like a damn good idea.