Source: Energy Resources Aotearoa
Energy Resources Aotearoa welcomes the Government taking its next step toward abundant, affordable and reliable energy for all New Zealanders by progressing a liquefied natural gas (LNG) terminal and consulting on a new Winter Energy Reliability Obligation.
Energy Resources Aotearoa Chief Executive John Carnegie says today’s announcements recognise the growing fuel and flexible generation capacity shortages in New Zealand’s energy system.
“These are much-needed steps to strengthen our economic resilience and energy security, giving Kiwi businesses and households confidence that we can keep the lights on when the weather doesn’t play ball.”
The decisions recognise how exposed New Zealand’s energy system has become by prioritising decarbonisation at the expense of secure, reliable and affordable energy, Carnegie says.
“New Zealand is now highly vulnerable in dry years, with our economy exposed to volatile prices that have cost billions of dollars in foregone GDP, weakened competitiveness, and contributed to closures and hundreds of job losses across the country.”
Carnegie says while some novel ideas have been floated recently, including shifting most of New Zealand’s thermal peaking capacity to a fuel that costs nearly twice as much per unit as its LNG equivalent, common sense has prevailed.
“Domestic natural gas remains the cheapest, lowest-risk way to fill the fuel shortage. Once implemented, LNG and the winter energy reliability obligation would give New Zealand the back-up it needs to protect energy users while the domestic gas market recovers.
Much has been made of the volatility of international prices since the Gulf crisis began, but the Government has wisely looked through this to when the conflict ends, supply will stabilise and when there will be downward pressure on prices.”
Even the most ardent critics no longer believe it feasible or pragmatic to rely only on renewable sources of energy for our energy security, Carnegie says.
“Energy independence needs more than wishful thinking. New Zealand needs clear, durable policy settings that unlock continued investment in renewables, firming capacity and deliverable gas.
We look forward to working collaboratively with the Government and officials to deliver this.”