Nick Smith12 April,
2011 - Good evening. I would like to extend
a special welcome to our overseas guests
to ‘Windy Wellington’.
I have heard New Zealand
described as the ‘Saudi Arabia of wind’.
It’s an apt description.
Our long narrow country
lies in the middle of the ocean unprotected
by other landforms, and across the path
of prevailing westerly winds. We are smack
bang in the part of the globe referred to
by sailors as the ‘Roaring Forties’.
Wind is certainly one
natural resource we have in spades.
Some of you have already
visited Meridian Energy’s West Wind wind
farm just over the hill from here. It harnesses
a local renewable source to provide local
electricity generation for New Zealand’s
capital city. I’m told it is one of the
best performing wind farms in the world.
But at present only
about 4% of our electricity generation nationally
comes from wind. We can, and are, improving
on this.
New Zealand’s current
wind energy capacity is 606 megawatts. This
may seem small by global standards and given
the abundance of this resource, but it is
a 20% increase on capacity in a year.
In 2010, five new wind
farms have come on line. These are Chatham
Island, Te Uku, Mahinerangi, Lullworth and
Weld Cone. Construction continues at a sixth
(Te Rere Hau).
This shows me that generators
are seeing and pursuing opportunities in
wind energy. We are all starting to understand
that wind farms can be designed and built
in a way that fits with local conditions
– be that resource availability, electricity
demand, or site constraints – and from small
scale projects to larger ‘utility-scale’
power plants.
You will know better
than anyone just what a clean, cost-effective
and renewable resource we have in wind.
It is one of the renewable sources of energy
that this Government would like to see New
Zealand harness further.
Importance of renewable
electricity generation to NZ
The Government recognises the importance
of renewable energy to New Zealand.
That’s why we have set
a target of 90% of New Zealand’s electricity
to be generated from renewable sources by
2025.
More than 32,000 gigawatt
hours of electricity was produced from renewable
sources in 2010 which is the highest level
ever. This represents more than 74% of all
electricity generated in 2010 – a level
we have not seen for 12 years.
The bulk was from hydro-electricity
generation but we realise that in the near-term,
reliance on high levels of hydro can expose
us to issues of security of electricity
supply.
Increasing the proportion
of electricity from renewable sources like
wind and geo-thermal-based generation will
lead to a more diversified portfolio of
electricity supply.
In addition, renewable
electricity generation is a sector where
there are opportunities for low cost reductions
in greenhouse gas emissions.
The Government sees
renewable electricity generation as an efficient
and cost-effective way to help New Zealand
meet our international climate change obligations.
As a signatory to the
Kyoto Protocol, we have indicated our willingness
to conditionally cut our greenhouse gas
emissions up to 10 or 20% below 11000 levels
by 2020.
And, I announced last
month the gazettal of the Government’s target
of a 50% reduction of greenhouse gas emissions
by 2050.
Increasing the proportion
of electricity generated from renewable
energy sources has a pivotal role to play
in helping us achieve these targets.
In addition, renewable
electricity generation is an important contributor
to our clean, green brand.
I think most New Zealanders would prefer
our power was produced by renewable sources,
yet over the past 20 years the biggest percentage
increase in emissions has come from thermal
power generation, up 120% since 11000.
Take for instance, the large E3P generator
at Huntly and the backup diesel-powered
station at Whirinaki.
But over the past couple of years we have
seen a marked and positive shift. Last year
we saw 800 megawatts of new generation consented
– 45% geothermal, 40% wind and 15% hydro
– all 100% renewable. And we have the potential
to do even better.
In 2010 wind generated
1618 megawatt-hours of electricity. I am
aware of upwards of another 1800 megawatts
of generation capacity being considered
including Turitea and Hauauru Ma Raki wind
farms, which are approved in draft decisions
by boards of inquiry.
I’m told generators
have applied for consent for a further 846
megawatts and a number of other sites are
being investigated.
Untying the knots -
Resource Management Act reforms
We are seeing a major turnaround, both in
the proportion of consents being granted
that are for renewable electricity generation
projects, and in the speed at which those
consents are being processed.
Why? Well your conference
theme of ‘untying the knots’ seems particularly
pertinent to me, because this is exactly
what the Government has been focussed on
with its ongoing reform of the Resource
Management Act.
My thinking about New
Zealand’s resource management system is
underpinned by the Government’s Bluegreen
vision. This vision sets out a clear agenda
for bringing economic and environmental
considerations closer together.
The first phase of the
resource management reforms which this Government
introduced within 90 days of taking office
was focussed on removing roadblocks, and
streamlining and simplifying processes.
A key part of the reforms
is to provide clearer Government direction
and leadership on resource management issues.
We are achieving this through the use of
National Policy Statements, which I will
speak about shortly, and through the Environmental
Protection Authority.
The national consenting
option provided in the first phase of the
Government Resource Management Act reforms
has attracted a high level of interest in
applications. This new one-step process
overseen by the Environment Protection Authority,
or EPA, requires a decision within nine
months with limited appeal rights.
And the EPA has already
proven its worth. Recently Contact Energy’s
$1 billion Tauhara II 250 megawatt geothermal
power station in Taupo was the first project
to be processed under the national consenting
process of the reformed Resource Management
Act.
This major project was considered and decided
in a record time of eight months.
This is the first time in 20 years a major
project has been consented in eight months.
The average time prior to these reforms
was two years with some projects taking
as long as eight years.
I think that result
speaks for itself.
And the EPA is not the only tool in the
Government’s tool box. We are also looking
to provide greater Government direction
through the use of National Policy Statements.
And today, I am pleased
to announce that the Government has approved
a new National Policy Statement for Renewable
Electricity Generation.
National Policy Statement
for Renewable Electricity Generation
As the highest level policy instrument available
under the RMA, the NPS will ensure there
is consistency in planning for renewable
electricity generation across the 78 local
authorities in New Zealand.
It sends a clear message
that the Government is prepared to provide
national direction on matters of national
significance for renewable electricity generation.
A NPS requires all councils
to make provision in their policy statements
and plans for developing, operating, maintaining
and upgrading renewable electricity generation.
It also means that the
national benefits of renewable electricity
generation must be taken into account when
councils are making resource consent decisions.
The NPS will drive a
consistent approach to planning for renewable
electricity generation activities.
This is a significant
step forward.
Clear national direction
and consistent planning provisions will
provide a greater degree of investment and
planning certainty for developers and the
community.
It means communities
will have more options for renewable electricity
generation development because the planning
consistency the NPS provides will increase
certainty, and will recognise the benefits
of small or niche renewable electricity
generation projects.
In this way, the NPS
for renewable electricity generation clearly
signals the Government’s support for diversified
locations and distribution of sources of
electricity supply.
A staged approach will
allow councils to incorporate the provisions
of the NPS into their plans and policies
within their scheduled plan revision cycle
at minimal additional cost.
But they must ‘have
regard to’ the NPS in consent decisions
when it comes into force next month.
Supporting measures
The Ministry for the Environment is working
with key agencies, local authorities and
industry representative such as the New
Zealand Wind Energy Association to scope
a workable set of supporting measures to
be developed as close as possible to the
notification of the NPS in the New Zealand
Gazette.
On this front, I expect
the Ministry will report back to me and
the Minister of Energy and Resources in
the next few months.
To give you a flavour
of what is in the frame; many of the alternatives
to the NPS – most obviously non-statutory
guidance – may act as supporting measures
to strengthen the benefits that are likely
to be obtained from the NPS.
The most likely issues
to be considered include, but are not limited
to, landscape assessment methodology, wind
turbine noise, performance standards for
wind farms, wind overlay areas and small-scale
renewable energy initiatives.
However, as I have indicated,
these issues are still to be scoped and
decisions are yet to be taken on what the
most appropriate mechanisms are for tackling
them.
So at this point let
me thank the members of your Association,
council staff, our partners the Energy Efficiency
and Conservation Authority and other government
agencies, and the many other stakeholders
who have expressed their support for the
development of measures to support the implementation
and effectiveness of the NPS. I welcome
your involvement.
I also wish to thank
the Board of Inquiry, particularly Dr Royden
Somerville QC and submitters who contributed
to earlier iterations of the NPS.
Their valuable contributions
have helped shape the final version. In
the interests of transparency, and to assist
with the development of appropriate supporting
measures, I am also releasing the Board’s
report on the NPS.
I acknowledge the Board’s
vision for the NPS was substantially different
to the earlier notified version in terms
of structure, scope and level of prescription,
and differs again to the version I am announcing
today.
In finalising the NPS,
I have had to take into account developments
in policy and practice in the six or so
years since this NPS process began. I have
also sought to have an NPS that was clear
and that did not create excessive risk for
decision-makers due to overly prescriptive
or unclear policies.
The final version sits
comfortably with me, in particular because
it identifies two matters of national significance:
first, the need to develop, operate, maintain
and upgrade renewable electricity generation
activities throughout New Zealand; and secondly,
the benefits of renewable electricity generation.
Our goal has not been
to re-jig the fundamental purpose of the
RMA but to get genuine process improvements
so that we can achieve better decisions
in a more timely way, and support council
decision-making on issues of national significance.
I am confident that
we have achieved the right balance of providing
a clear steer from central government to
local authorities that will improve certainty
for generators and investors.
At the same time we
are signalling our support for action on
climate change and security of electricity
supply, and creating conditions that will
improve the feasibility of small or niche
projects suitable to specific landscapes
and communities.
The appropriateness
of this NPS is reinforced by the results
of the cost-benefit analysis, which identifies
an approximate quantifiable net benefit
of $5.6 million.
The NPS, the Cabinet
Paper, the Board of Inquiry’s report and
a range of other supporting information
is available from this evening on the Ministry
for the Environment website.
The NPS will be gazetted
this Thursday and will take legal effect
on 12 May.
NPSs and NESs
I would like to make a general point about
the use of National Policy Statements and
National Environmental Standards for providing
greater Government direction.
These are historically
under-utilised tools.
We stood on a platform in 2008 as part of
our RMA reforms to provide greater central
government direction.
That is why we have created the national
consenting process and the Environmental
protection Authority.
That is why we are pushing ahead with an
agenda of additional National Policy Statements
and National Environment Standards.
It does not make sense for a country of
four and a half million people for us to
be re-designing the wheel 78 times.
This NPS is only the third in 20 years of
the RMA.
In 2010, we redid the Coastal Policy Statement.
We also have underway National Policy Statements
on Freshwater and on Biodiversity.
We believe we can make the RMA framework
function better with this sort of clearer
national direction.
Conclusion
Can I conclude by putting this NPS announcement
in context.
During the term of the
last Government, over half the new generation
capacity built was thermal and we saw the
proportion of renewable electricity decline
to an all time low.
We set up a three step
policy to reverse that.
In 2009, we passed our first phase of RMA
reforms providing for the streamlined National
Consenting process.
In 2010, we introduced the ETS to provide
a price signal and a competitive advantage
for renewables over thermal generation.
In 2011, we have introduced this National
Policy Statement to reinforce to local authorities
and to resource consent decision makers
the importance of renewables to our energy
future.
These steps are consistent with our Bluegreen
Vision of building a stronger economy on
sound environmental foundations.
We look forward to working with your industry
to ensure it delivers.
