Monday, November 29, 2021

Climate Change: We can do it!

RNZ reports on the other story to come out of the government's emissions budget Cabinet paper: the scale of the changes we need to make:

The massive scale of the nationwide changes needed quickly to cut climate gas emissions is laid bare in newly-released government documents.


The number of cyclists needs to increase by half in three years and by 340 percent by 2035, while public transport use needs to go up 60 percent and 210 percent over the same timeframes.

In three years, the amount of electricity generated from wind and solar needs to increase 106 percent and 180 percent respectively.

By 2035, wind will have to have increased 360 percent, while solar will need to increase 2200 percent to make up the 6 percent share of total energy needed.

While I can't talk about cyclists (which sounds like a job for the transport experts at Greater Auckland), I can run the numbers on renewable energy. And they're quite promising.

First, solar. According to MBIE's electricity statistics, this is estimated to generate 159 GWh a year (estimate because they don't actually know how many rooftop solar installations there are). 180% of that is 286 GWh, which is about 70% of the 400 GWh of new solar plants announced earlier this year by Lodestone Energy. All of which are meant to be up and running by the end of 2023. So, we'll beat the expected first budget target, and if the industry can sustain that pace, then we might make the 2035 one (and on that front, its only likely to get cheaper and easier).

As for wind, according to Wikipedia we have 817.7 MW of installed generation (this excludes Turitea, which is half-built; including the northern half would take it to 936.7). So we basicly need another GW of new generation installed by 2025, which is a big ask. The good news is that there's already 416 MW (including the unbuilt part of Turitea) of that in the construction pipeline for the next two years. So the market is already going to provide about 40% of what we need. What about the other 60%?

The good news is that there's plenty of projects consented and waiting to go. And one of them - Castle Hill - would solve the whole problem in one hit (for the next budget period). But Genesis doesn't want to build it, because it would reduce the need for Huntly and so drive power prices and profits down. The government could solve that by using its majority ownership of Genesis to force them to do, by paying them to do it, or just by buying the project and doing it themselves. The latter option would cost ~$1.6 billion, which is a hell of a lot of money. But its less than three years of the social cost of the 4 million tons of carbon the electricity industry emits every year. In other words, if the government took its own $150/ton carbon price seriously, it would spend that money directly to reduce emissions and avoid incurring it.

In the longer term, we need to quadruple the amount of wind power in Aotearoa. The market clearly is not going to provide that by itself. But the government can, and should, step in to address this market failure, using tax and ETS revenues to pay for it. At its own social cost, its cost-effective to do so.

As for the how, until recently New Zealand had a publicly-listed company whose sole purpose was to build more windfarms (ironicly, it got bought by one of the big gentailers to add to its portfolio). The government should establish a new SOE for this purpose. This would also give it direct leverage on the electricity market, letting it counteract the more sociopathic impulses of the major gentailers. The problem, as with so many other things, is to get them to start seeing it as an investment, which saves them money in the long-term, rather than as a short-term cost.