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Speech: Electrify NZ

I’m going to talk to you today about a subject close to your hearts and mine, but first let me give you a little overview of where we are as a country.

New Zealand is simply the best country on planet Earth and has unlimited potential. And I came to politics because I believe, more than ever, that if we make the right decisions, New Zealand can do better, can be more prosperous, and can be more ambitious.

I don’t want to settle for drift and mediocrity, and I don’t believe other New Zealanders want to either.

But, all over the country, people are telling me that they are frustrated and worried.

They are anxious about things they can’t control. Offshore there’s the war in Ukraine and upheaval in the banking world.

Here at home, we have a worsening economy and a cost-of-living crisis that is deeply biting many households and businesses.

People are seeing that Labour has no economic strategy except to spend more money.

The Government is now spending $1 billion more each week compared to 2017 when National was in government. That’s an increase of nearly $23,000 per household each year of public spending.

Finance Minister Grant Robertson is collecting $43 billion more in tax each year - that’s $17,000 more tax per household coming into the Government’s coffers.

Yet Labour refuses to inflation-adjust tax thresholds so more people can keep more of what they earn.

The Government will inflation adjust benefit levels. It will inflation adjust superannuation. It will inflation adjust student allowances. But it will not help out working New Zealanders by inflation adjusting tax brackets.

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I have to tell you, it is a very special skill to spend $1 billion extra per week, to hire 14,000 more bureaucrats, and deliver worse outcomes.

You wouldn’t do it with your businesses, but Labour has been doing it for nearly six years with our country.

New Zealand needs a serious turnaround. It’s become a country in which it’s too hard to get things done. We’re going in the wrong direction. Not only are we not realising all that endless potential we have, we’re going backwards.

Now, I don’t accept it has to be like this.

I don’t accept that the highest inflation in 32 years and rapidly rising interest rates is the best New Zealand can do.

I don’t accept that just 2% of Decile One high school students being able to pass a basic writing test is okay.

I don’t accept that the worst waiting times in hospital emergency departments are acceptable while the Government builds a giant new health bureaucracy.

And I certainly don’t accept that violent crime being up by 33%, a 56% increase in gang membership, and a ram-raid every 10 hours is the new normal.

A National Government I lead will chart a positive course for New Zealand that’s not about Left or Right, but about going forwards instead of backwards.

So, in government, National will have five priorities:

One – National will curb the rising cost of living with a five-point plan to fight the drivers of inflation. Briefly, it goes like this:

  • We’ll give the Reserve Bank just one focus – controlling inflation.
  • We’ll stop adding costs on businesses.
  • We’ll remove bottlenecks that are getting in the way of business growth.
  • We’ll provide tax relief.
  • And we’ll bring long-overdue discipline to government spending.

Two – National will lift incomes for all.

The first rung of lifting incomes – especially for those doing it tough – is to move people off welfare and into work.

Businesses are crying out for workers, yet under Labour there are 50,000 more people on a Jobseeker unemployment benefit than there were when National left office.

Our Welfare that Works policy will help young people who are able to work, find a suitable job. If you don’t play ball, you’ll face benefit sanctions. Under National, personal responsibility will be back.

We’ll also lift incomes by enabling businesses to flourish. You know that the more successful New Zealand’s businesses are, the better the salaries and opportunities they can offer.

Three – National will restore law and order.

National will give Police more tools to tackle gangs, and ensure that there are consequences for serious repeat young offenders.

Four – National will provide better health and education services.

You likely heard the plan I announced last week to teach the basics brilliantly in primary and intermediate schools with an hour each of maths, reading and writing on average, every day.

And, Five - National will deliver resilient infrastructure for the future.

That’s what I want to talk to you about today and, in particular, about how to get the infrastructure needed to deliver abundant, clean, renewable electricity that will help New Zealand achieve its climate change goals.

I want to state clearly and unequivocally that I am personally and deeply committed to New Zealand reaching the emissions reduction targets that National proudly signed up to in the Paris Accords in 2015.

National voted for the Zero Carbon Act back in 2019, which put emissions targets into law and established the Climate Change Commission, and we also support the Government’s emissions budgets. As many of you here know I embraced and championed sustainability a long time ago from my time at Unilever and Air New Zealand.

But while a National government I lead will be deeply committed to these ends, the means by which we achieve these goals will be different from this government. How we achieve our goal is a matter for debate, but committing to it is not.

National believes Kiwis should not have to do less to achieve our climate goals. We don’t need to sit at home, close down the economy and make sure we don’t travel anywhere. Instead we need to do things differently.

We can still drive cars, we can still heat our homes, and we can still grow the economy – but we need to power it with clean energy powered by rain, wind, sun or geothermal.

Most New Zealanders are concerned by climate change and many of us are taking small or large steps at home or at work to try to reduce our own carbon footprints.

As we do so, the enormity of what must be done for New Zealand to reach its goals becomes clear.

While each individual’s contribution to cutting emissions helps, emissions have increased under the Labour Government so New Zealand needs a gear shift on a national scale to get back on track to reaching its goals.

To ground everyone in the challenge ahead of us: Half of New Zealand’s emissions come from agriculture, and 40% are from energy - mainly from transport and using fossil fuels for industry and electricity. The final 10% is from other sources like steel production and landfills.

I’ll be talking about National’s plan to lower agricultural emissions on another occasion.

But today I want to focus on the huge potential to cut around 70% of those emissions that come from transport and energy, if we switch those sectors away from fossil fuels and into electricity powered by renewables like wind, sun and geothermal.

The technology already exists, and it’s getting better all the time.

The scale of the opportunity is staggering. A large-scale electrification of New Zealand’s economy could reduce annual emissions by up to 22 million tonnes by 2050 which gets us almost a third of the way to reaching our target of net carbon zero emissions.

Think about that. We can get a third of the way to net zero by 2050, and still drive our cars when and where we want, by going electric on a massive scale. That’s the size of the prize.

So, my vision is the mass electrification of the New Zealand economy with additional affordable, renewable energy.

With that, New Zealanders will know that when they turn on the lights or charge their car, the power they’re using will be coming from water, wind or sun.

But here’s the challenge: New Zealand doesn’t have the electricity to do it.

Imagine for a moment that, overnight, all private petrol-driven cars were replaced by EVs. New Zealand’s electricity system could not cope. It would have to burn more coal to supply power, electricity prices would shoot up and, in all likelihood, we’d have power cuts.

That’s the scenario New Zealand is facing, but instead of it being imaginary and overnight, it’s real and will happen in the coming years unless we can quickly unleash a lot more renewable electricity generation.

Right now, every New Zealander who switches from a petrol-driven car to an EV is putting more demand on the electricity system which faces huge hurdles to grow.

It would be absurd for people, believing they are doing the right thing, to switch to an EV only for it to mean more coal has to be imported and burned, creating more emissions, in order to produce the electricity needed to power a mass uptake of EVs.

In some parts of the world, that’s happening already. In Australia, if you buy an EV it is powered by electricity generated by coal, rather than renewables.

So, the reality right now is New Zealand’s renewable electricity supply simply could not cope with a mass-scale transition to clean power. There’s simply not enough of it.

If we resorted to producing more power by burning more coal, not only would it produce more emissions, electricity prices would go up.

But in order to encourage people to switch their hot water heating from gas to electricity, or their car from petrol to electricity, electricity needs to be affordable. As I said, Kiwis want to lower their carbon footprints, but they rightly will not do it at the expense of putting food on the table or paying the mortgage.

So that’s the challenge.

To encourage the mass electrification of whole new sectors of the New Zealand economy, we need to double our renewable electricity generation by 2050.

And National will make it happen.

The challenge is ambitious. It’s exciting. And today I’m going to tell you National’s plan to achieve it. It’s called Electrify NZ and shortly I’ll outline the first part of it.

The good news is that, New Zealand is truly blessed with world-class renewable resources providing cheap, reliable, baseload power. And last year 87% of out electricity was renewable – the third highest in the OECD.

I pay tribute to the New Zealanders who built the Wairakei power station in the 1950s. Here we are in 2023 and it’s still going strong.

People also saw the potential of the Clutha and Waikato Rivers and had the foresight to use them to provide the following generations of New Zealanders with thousands of megawatts of reliable and renewable electricity.

It’s no exaggeration to say that renewables are the new oil. A country would once have been considered fortunate to have oil reserves, but now it’s lucky to have renewables. In that respect, New Zealand truly is the lucky country.

Wind farms are meeting an increasing share of New Zealand’s electricity demand each year.

But for environmental reasons, large-scale new hydro is now a very difficult proposition so a huge step up in wind and solar farms are required to deliver the doubling of renewable electricity that is needed.

The wind and the sun are already with us, but sadly the regulation is not!

I’ll talk about the details of Electrify NZ in a moment. But first I want to talk about why it is so difficult to build renewable generation and lines infrastructure in this country.

The planning system puts barrier after barrier in the way of anyone who wants to build renewable generation or lines assets, adding years to projects. And it is getting worse.

A couple of days ago I visited a world-leading wind farm near Wellington. It provides power to 75,000 homes and it took just two years to build.

But it took eight years to get the consents to allow the build to commence. Eight years! That sums up everything that is wrong with the current process.

Renewing consents for existing generation assets are also difficult. For example, hearings and appeals to reconsent the Clyde and Roxburgh dams, and Wairakei, ran from 2001 to 2007.

It took 18 years to re-consent the Rae-tihi hydro dam, and the number of consent conditions increased from 4 to 136.

Sapere Research Group has estimated that since 2010, resource consent costs have increased by 140% and the time to get a consent has increased by 150%. That’s staggering – consenting costs up 140% and consenting time up 150% in the last decade.

This is unsustainable and utterly unacceptable because New Zealand will frankly not be able to electrify its economy if compliance for every big energy investment lasts the best part of a decade.

This will not continue to happen under a Government I lead. National will remove the obstacles that are holding back investment and growth, and jeopardising our goal of achieving our climate change targets.

I’m sorry to say that Labour’s proposed RMA changes will only make things worse. Many submitters on the new plans, including the Wind Energy Association, say it will be harder, not easier, to build a wind farm after Labour’s had its way.

Let me quote the CEO of Contact Energy discussing the proposed legislation: “If the Bills pass in their current form, then you can kiss goodbye to our decarbonisation goals. It is as simple as that.”

To electrify New Zealand, a massive surge of investment in renewable electricity generation, as well as investment in the transmission and distribution networks is needed so New Zealand can double its supply of renewable energy.

National knows how to do it and our Electrify NZ plan has two components:

  1. Turbo-charge new renewable new wind, geothermal, and solar power projects by setting a one-year limit for consent decisions, with consents to last for 35 years.
  2. Unleash the transmission and distribution infrastructure – poles, lines and pylons – required for an electric future by scrapping consent requirements to upgrade existing assets, and introducing new pricing rules to support new infrastructure

Let me go through both of those.

National will make it easier to build renewable generation, transmission and local lines.

We will require resource consents for renewable generation and transmission to be issued within one year.

Re-consents for existing generation and transmission assets will also be issued within one year.

We will also legislate so that consents last for a minimum of 35 years. Labour wants it to be 10 years. That is far too short. If you’re potentially spending hundreds of millions of dollars building a new wind farm you need certainty that you will have permission to operate that asset for a long time.

We will issue a new National Policy Statement for Renewable Electricity Generation and introduce National Environment Standards for each type of renewable generation to make it clear for applicants whether or not their plans for renewable generation will be consented.

As long as an application complies with the strict standards, including restrictions on where a solar or wind farm can be built, councils can set conditions but, in most cases, will not be able to decline it.

Labour has mucked around on a new National Policy Statement for six years and generators tell us it is critical to unclogging the planning system.

Finally, we will set a minimum lapse time of 10 years for renewable generation consents. In most cases, consents currently lapse after five years if they are not used. This can add considerable risk for renewable generation investments that have long development times.

We’re confident these changes will make it much easier to get a renewable project consented and importantly unleash the $30 billion investment the private sector wants to make in renewables over the next 25 years.

This also means New Zealand doesn’t need a massive new $16 billion white elephant Lake Onslow project, funded by taxpayers who have better uses for that money in public services like hospitals and schools.

Onslow represents not only more of the wasteful spending that Labour’s known for, but also a return to the bad old days of heavy-handed government intervention in the electricity market. The very prospect of Onslow and the ongoing regulatory uncertainty is already stymying investment in new renewables. Nobody knows what’s going to happen so everybody is waiting. Meanwhile, the need for investment gets more pressing.

The second major change we will make is to make it easier to build and upgrade transmission and distribution infrastructure.

It’s all very well having more renewable generation, but it needs to get around the country.

New Zealand needs more than $30 billion of investment in transmission and local lines this decade, according to a recent estimate. A significant part of that investment will be upgrades to existing lines.

National will introduce a National Policy Statement for Distribution so, in most cases, resource consents won’t be needed for upgrades to local electricity infrastructure like power poles, transformers and substations.

The NPS will set clear limits for the maximum changes that can occur without consent and will define lines corridors where lines companies can work without obtaining resource consents.

We will also update the National Policy Statement for Transmission to require consents for new lines to be granted in one year, and make clear that, within limits, no consents are required for upgrades.

The other part of this challenge is new pricing rules to drive investment in electricity transmission and distribution.

Our electricity lines companies are natural monopolies, so their investments, pricing and returns are regulated by the Commerce Commission. The system generally works well, but the rules are now 15 years old. They were written in and for a different era.

We will update the Commerce Act and associated regulations to provide greater certainty around cost recovery for regulated infrastructure.

All these changes will help New Zealand do what it needs to do and get to where it needs to go, to play its part in the global challenge of reducing the risks and harms of climate change.

The plan I’ve outlined to you today is not the only part of National’s Electrify NZ plan. Nor is it the only part of National’s climate change policy. But providing abundant and affordable clean energy is a vital foundation for simultaneously lowering emissions and growing the economy.

Lowering emissions and a growing economy are often seen as mutually exclusive. They’re not.

With Electrify NZ, it’s not a case of one or the other. New Zealand can have both.

Electrify NZ will mean companies moving from coal boilers to electricity. And they’ll do it without corporate welfare from government.

Electrify NZ will mean lower power bills than New Zealanders would have if we don’t do this.

Electrify NZ will mean the mass adoption of EVs. The anti-car ideology can cease. New Zealanders will be able to go where they want, when they want, affordably, in electric cars and buses powered by wind, water, and the sun.

Labour’s choice is to say ‘100% renewable’ all the time because it’s a good headline. But actually it’s the wrong target and it is not ambitious enough.

It’s not enough to turn our existing electricity generation to renewables. We need to convert entire swathes of the economy from fossil fuels to clean electricity. That means doubling the amount of renewable electricity we produce.

If we get this right, Electrify NZ will take New Zealand about a third of the way to meeting our net zero ambition.

All this is possible with a government focussed on the right outcomes, and that knows how to get things done. That will be my government.

Under National, getting things done means unlocking billions of dollars of investment into clean energy, lowering emissions, and powering economic growth.

It means the mass electrification of the New Zealand economy. It means Electrify NZ.

Thank you very much.

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