Low hydro lakes. High petrol prices. No more Maui gas. There’s always something to talk about on the energy front.

All of these issues have sparked debate in recent times. But the hard thing is to see beyond the issue of the moment to our longer-term energy future. When we are preoccupied with where oil prices might go next year, or where our electricity will come from in ten years, how do we think clearly about the energy system we will need in 20 years, or 50?

The government has been doing some thinking about this, and has recently released a discussion paper that takes a longer term view. The central idea is sustainable energy: what a sustainable energy system for New Zealand might look like, and how we might achieve it.

Sustainable energy would have to be secure, affordable and environmentally responsible. Easy to say: very hard to do. There are, of course, no simple answers. We just have to keep our goals clearly in mind and move towards them one step at a time, learning as we go.

We do know, however, that fundamental change must happen. Two huge challenges will force the development of a radically different energy system this century. One is the coming peak in global oil production, which will probably occur within our lifetimes or our children’s. The other is global climate change. Both of these render our current energy habits unsustainable. Both compel us to think about the decline of the fossil fuel era, and what comes next.

The good news is that we are not powerless in the face of these challenges. Humankind has changed its energy system radically in the past, and can do so again.

The place to begin is not with supply, but with demand. It is too easy to focus on expanding supply to meet our growing energy needs, and forget that our energy needs are ours to control. By making smarter energy choices we can get more value from the energy we use, waste less and start building a cleaner, more dependable energy system. These choices belong to all consumers, large and small. We all have opportunities to choose what we use, and how well we use it.

Although we can re-think our energy consumption, we will still need new sources of energy for the future. The world currently relies on oil and other fossil fuels for most of its energy. We already capture energy from the sun, the wind, the rain and the earth’s subterranean heat. We have barely begun to tap the enormous resources of clean, renewable energy available to us. But these resources, are generally, technically harder and more expensive. That's why we use oil. The global transition away from fossil fuels will need to be phased, deliberate and timely.

New Zealand’s abundant energy resources, coupled with our history of innovation and adaptability, position us well for the future. We begin the transition to more sustainable energy from the unusual position of having both more renewable energy and lower energy prices than most countries. This creates opportunities for us to be a provider of sustainable energy solutions to the world.

The Sustainable Energy paper discusses our current energy situation, the challenges and opportunities facing us, the government’s thinking on sustainable energy and our policy response so far. It identifies some possible further steps towards a more sustainable energy system. It is not a blueprint for change, but a step towards one. I hope it helps us move a little closer to a shared understanding of an energy future that fits with New Zealanders’ values and aspirations.

The Sustainable Energy document is available at http://www.med.govt.nz

SUSTAINABLE ENERGY Q & A

Q. What gave rise to this document? A. New Zealand is one of many nations pursuing growth through sustainable development – development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs.

In January 2003, the government’s Sustainable Development Programme of Action identified energy as one of four areas for action, because energy and energy developments have broader economic, social, and environmental consequences that must be taken into account when we think about the kind of energy future we want. This discussion paper follows from that programme of action.

Q. What is the purpose of the sustainable energy document? A. The document is a view of New Zealand’s energy future and a discussion of how we might shape it for the benefit of future generations of New Zealanders. It:

identifies the energy challenges and opportunities facing New Zealand; explains the government’s strategic direction in energy policy; explains how energy and energy-related policies work in that strategic direction; and identifies possible future directions for policy development.

The document is not a detailed plan or strategy for energy, nor does it propose a new policy prescription for energy. Rather, its purpose is to provide a framework or context in which energy issues can be considered going forward. The document aims to provide a context which is sufficiently broad and forward looking to ensure that there can be informed discussion about New Zealand’s energy future.

Q. What are key drivers of change identified in the document? A. Two huge challenges will force the development of a radically different energy system this century. One is the coming peak in global oil production, which will probably occur within our lifetimes or our children’s. The other is global climate change. Both of these render our current energy habits unsustainable, and compel us to think about the decline of the fossil fuel era, and what comes next.

Q. What exactly do you mean by sustainable energy? A. To deliver on the economic, social and environmental goals of sustainability, an energy system needs to be reliable and resilient; environmentally responsible; and fairly and efficiently priced.

Supply reliability is the maintenance of access to enough energy to meet demand for energy services. Resilience is the capacity of the energy system to absorb and recover from shocks and to learn, innovate and respond successfully to gradual changes and trends.

A principal environmental concern is climate change. We need to begin to restrain greenhouse gas emissions from energy production, distribution and use, so that they can be reduced over time. At the local level, we also need to control the adverse environmental effects of energy production, distribution and use; manage environmental pressures arising from growth in our energy needs, and take opportunities to enhance environmental quality.

Efficient energy prices accurately reflect the relative scarcity or abundance of energy resources, the costs of production, distribution and use, and impacts on the environment. Fair pricing complements efficiency. It requires energy providers to be adequately remunerated, while helping to ensure that vital energy services are widely available and affordable, including for the least advantaged.

Q. Who was involved in producing the document? A. An officials’ group led by the Ministry of Economic Development and comprising the Ministry for the Environment (including the Climate Change Office), the Energy Efficiency and Conservation Authority, the Ministry of Transport, the Treasury, the Department of Prime Minister and Cabinet and Local Government New Zealand.

Q. How will government officials engage with stakeholder groups over the next six months? A. The government is keen to engage with stakeholders on the issues and directions discussed in the document. The kind of transition envisaged in the document cannot be achieved by the government alone. It can only be achieved if perspectives are shared and widely held. Building shared perspectives requires effective partnerships, constructive engagement, and good quality information.

Engagement will be facilitated through a series of meetings with key stakeholders with all interested parties being invited to comment through a dedicated email, sustainableenergy@med.govt.nz, and phone number 04 472 0030.

Q. What happens at the end of the engagement period? A. Officials will be reporting on the outcome of their engagement to Ministers who will decide what further action to take, if any.

Q. Does the document signal a new approach to energy policy? What new policies can be expected? A. In the past five years, the government has introduced a number of specific energy and energy-related policies and strategies that contribute to sustainable energy objectives. These policies and strategies provide an excellent start, but they are not sufficient by themselves to support a transition to a sustainable energy system.

The document discusses the key challenges and opportunities New Zealand faces in making this transition, considers what more needs to be done to achieve sustainability and suggests possible new policy approaches. The government wants to hear what others have to say before considering possible next steps.

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