A green advocacy group is criticising the Government’s liquefied natural gas (LNG) import plan, saying installation of solar power and heat-pump hot water systems would give much better bang for buck.
The New Zealand Green Building Council released a report on Q+A which pointed out the LNG plan would cost more than a system of grants to allow new builds to have much more energy-efficient water heating and rooftop solar.
Green Building Council chief executive Andrew Eagles said billions in generation costs can be saved under his organisation’s plan, both for the government and for individual households.
“We were really interested to see what we could do with modern new technology like solar and hot water heat pumps,” said Eagles.
“We can get over 15 years, about $6 billion worth of savings for Kiwi households.”
He said the LNG terminal would also create a “single point of failure,” and would link domestic energy costs to those of the international markets, leaving New Zealand vulnerable to the types of extreme spikes that occurred after Russia invaded Ukraine.
The Government’s LNG plan was announced this week in response to domestic electricity price spikes in recent years that have left businesses reeling and households facing significantly elevated electricity bills.
“New Zealand is experiencing a renewable electricity boom, but a rapidly declining gas supply has left our electricity sector exposed during dry years, when our hydro lakes run low,” said Climate Change Minister Simon Watts.
“The result is greater reliance on coal and diesel, and ultimately higher electricity prices, putting more financial pressure on families and making businesses less competitive.”
As part of their announcement, the Government noted that other options such as renewable projects were considered, but not advanced due to a range of factors “such as expected time to construct, feasibility of generating power reliably on the required scale, and effects on electricity market incentives.”
“LNG was the preferred option after consideration and analysis of the options. LNG was found to lower electricity prices at relatively low capital cost and deliver spillover benefits.”
Andrew Eagles said he didn’t accept the contention that LNG would smooth out the highs in electricity prices.
“When we hook up to an international energy price, what other countries have seen is that it dramatically increases those energy prices because you’re competing with a global market.”
“There’s potential for it to help in a dry year problem, but what the Cabinet papers show, what’s becoming more apparent, is that we’re going to be using it more and more from 2028, 2029 as our domestic gas runs out, and we’ve got other solutions,” said Eagles.
Eagles estimated a Green Building Council plan would cost an initial $2.5 billion, but then deliver savings over time, as opposed to the LNG plan, which would have lower upfront costs, but would cost money into the future to both maintain the import terminal and buy LNG.
Minister want to bypass own fast-track law to speed up new gas terminal
The government plans to rush through as many of the required approvals as possible ahead of the election, "to give the preferred supplier greater policy certainty that New Zealand is committed to developing the facility", a Cabinet paper said.
Thu, Feb 12
8:51
For the full interview, watch the video above
Q+A with Jack Tame is made with the support of New Zealand On Air
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