Energy Resources Aotearoa Welcomes Pragmatic Approach In Electricity GPS

Energy Resources Aotearoa welcomes the refreshing pragmatism in the Government’s Policy Statement (GPS) to the Electricity Authority.

The GPS says mitigating climate change is not the job of the Electricity Authority, and Minister Brown has made it clear that the Authority should take a "fuel agnostic" approach to the electricity sector.

Chief Executive John Carnegie says, "This is a welcome dose of pragmatism and the direction we need as we transition to a low-carbon electrified economy.

This winter highlighted that we still need thermal generation to ensure a secure energy system.

"We must keep our options open with facilities like Genesis’ Huntly Power Station, which can generate energy from domestic gas, coal, and biomass" Carnegie says.

The GPS also says that the Government will not intervene in the wholesale market as this "can undermine incentives on market participants to manage their risks properly, chilling hedging and new investment leading to increased scarcity, more periods of high prices and reduced security. We couldn't agree more".

The statement clarifies that the Electricity Authority must refrain from favouring one form of fuel or technology over another, something we have consistently advocated for over the last five years. Carnegie says it is great to see the government agree with Energy Resouces' Aotearoa's long-standing position on fuel and technology agnosticism.

If thermal generation is cheaper than renewable alternatives, we should use it. It also says that the Emissions Trading Scheme with carbon pricing should be the mechanism for addressing climate change.

Carnegie says, "This is a welcome departure from ideologically driven policy, which contorted our largely renewable energy system into a vehicle for reducing emissions. Right now, thermal generation is a necessary part of our generation mix, and it is great that the government acknowledges this.

"Now we need the right regulatory and market conditions to encourage the development of gas-fired peaking plants and the fuel we so badly need to keep the lights on."

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