21 March, 2013
Speech to New Zealand Wind Energy Association
Thank you for the opportunity to address your annual conference. It’s great to be here. Your industry is an exciting one – with its challenges, and opportunities.
To get a sense of this, I am going to start by taking us all back a few years.
In 1993, New Zealand got its first wind power turbine prototype. Over a few short years, the technology moved into the mainstream and its growth is now consistently in double digits.
Not bad in just 20 years.
Today, wind power makes up 4.5% of our power, and growing.
What’s so good about this is wind energy is renewable energy, with the attendant environmental benefits this brings.
This Government has committed to an ambitious target of 90 percent renewable electricity by 2025.
And let’s be very clear – we are committed to this. We are confident about our renewables future.
While there has been a recent slowing in electricity demand impacting some generators’ short-term investment plans – seeing some delays or cancellation of generation projects – renewables will continue to grow as a proportion of our power supply.
None of this means we will only explore renewable energy options. We must take a balanced, pragmatic approach.
But neither does it mean that wind is somehow a soft option. No. It has to stack up financially against other energy sources.
Which is why I am in favour of wind. It does stack up.
Wind has grown to 4.5% of our energy source without subsidies from the Government.
More generally, renewables today are cost-competitive with fossil fuels so, as I have said, I am confident that the majority of electricity generating capacity to be built over the next decade will be renewable.
I believe, as I know all of you do, that a secure supply of energy for New Zealand is fundamental. And what I have learned is this: a secure supply of energy is a diverse supply.
This is another reason to be supportive of wind. At 4.5%, wind power increases our energy diversity, smoothing out the peaks and troughs when, say, hydro power may be low.
As a recent Bloomberg column reinforced to me, energy can be viewed as an ecosystem where a range of energy technologies are desirable. And in ecosystems diversity beats monoculture.
Wind power certainly has a valuable role to play.
The global picture with wind is as impressive as the local one.
Between 2000 and 2010, global installed wind capacity and global electricity generation from wind each grew by an average of 27 percent a year, to where wind energy now accounts for 2.5% of global electricity generation.
While it’s not quite as high as here, it’s reached a point where it is a significant contributor.
And just as wind energy’s renewable nature, cost-competitiveness and ability to bring diversity and thus resilience are factors here, so they are elsewhere.
As the Global Wind Energy Council puts it, “the fundamentals that have driven the industry’s dramatic growth over the past two decades remain and will only get stronger over time.”
None of this is to say, however, that you haven’t faced hurdles as an industry. You have, with the burden of regulation being high on your list.
Perhaps near the top of the regulatory load have been the Resource Management Act and its consenting regime, which I know has caused headaches for some of you.
We are very aware of this and that’s why we’ve implemented a number of improvements in this area since we became Government.
These include introducing the National Policy Statement for Renewable Electricity Generation; creating the Environmental Protection Authority; and making 150 amendments to simplify and streamline the RMA.
I hope these initiatives have made your lives easier.
But we appreciate there’s more work to do in this area.
We still hear concerns about costly, cumbersome and time-consuming resource management processes.
That’s why my colleague, Environment Minister Amy Adams, recently announced a work programme for further reforms to the RMA.
As part of her announcement, she cited an example that I think is worth repeating here.
I expect Meridian Energy’s Project Hayes is a case you’re all familiar with.
Regardless of the merits of this project, the consenting process that it went through was unnecessarily costly.
This was a $2 billion wind farm project which, by the time it was eventually refused by the Environment Court after three years, had incurred nearly $9 million in costs for the applicant, and no doubt, an additional many hundreds of thousands of dollars in community and submitter costs.
I understand that much of the cost involved could have been avoided, if it were not for the inconsistent and unclear nature of the local plans.
We anticipate that our proposed reforms will help reduce problems such as this.
Building on the improvements to the resource management system that we’ve already implemented, we’re now keen to tackle more complex challenges.
Some of these are addressed in the 2012 Resource Management Reform Bill currently before Parliament.
We’ve also just released a discussion document containing a comprehensive package of resource management reforms.
I encourage you to participate in this consultation process.
At the same time, if you have other concerns – outside the realm of consenting and the RMA – I encourage you to talk to me, and relevant officials, about these.
As I said in my address to the Downstream forum in Auckland a couple of weeks ago, I see closer engagement between central and local government and business, iwi and communities as a priority.
I hope my attendance here today is a positive step in that direction.
As many of you probably know from first-hand experience, there’s also a lot that can be achieved from wind farm developers initiating meaningful engagement with local communities from early on in the process, and into the operational phase.
Meridian’s Te Uku wind farm is an excellent example of what I’m talking about.
Meridian, Waikato Regional Council and the Waikato District Council collaborated closely throughout the project development phase, and this has continued into the operational phase.
Ngati Mahanga was engaged to develop a nursery and plant 40,000 native plants on-site.
Regular community liaison meetings identified a strong interest, leading to educational wind farm tours, school visits and seminars to educate people of all ages on how renewable energy can contribute to an environmentally-sustainable future.
This is great – and I hope to see even more examples of this type of positive engagement in the future.
In the wind industry’s relatively short time in New Zealand and abroad, it has – you have – achieved a lot. I’ve no doubt the path ahead is even more exciting.
I look forward to working with you as the opportunities unfold.
Thank you – and I wish you the very best for the rest of your conference.