Friday, April 03, 2020

Climate Change: The benefits of electrification

In order to meet our 2050 carbon target and do our bit to avoid making the Earth uninhabitable, New Zealand needs to decarbonise our economy, replacing fossil fuels with electricity in the energy, industrial and transport sectors. The good news is that it will mean cheaper power for all of us:

Households will pay much less for their energy in 2035, if New Zealand successfully replaces fossil fuels with sustainably-generated electricity, a new report says.

Transpower's Whakamana i Te Mauri Hiko – Empowering our Energy Future report estimates household energy costs could fall by as much as 27 per cent by 2035.

But for that to happen the country must build as much power generation capacity in the next 15 years as it did in the previous 40, and it will cost between $8-$10 billion.

In normal times, that $8 - $10 billion cost would be a barrier. But now, with the government desperate for construction projects to restart the economy when the pandemic ends, it is an opportunity. The RMA isn't a big issue - half of what we need to build is already consented (though some of those consents will expire soon and need to be extended). The bigger problem is that the electricity companies don't actually want more generation, because it would lower prices and profits. But that's nothing that can't be solved by re-nationalisation. If we're looking for projects of lasting value to build our way out of the post-pandemic depression, decarbonising our entire energy supply seems to fit perfectly.