News Release
26 September 2008
Otago DHB Facing Over $1 Million In Increased Energy Costs
Energy Minister David Parker announced a $1.595 million loan to the Otago District Health Board for energy efficiency
improvements on 24 September which is predicted to save them $300,000 per year on energy bills, but according to
analysis done for the Greenhouse Policy Coalition, the emissions trading legislation will result in a conservative cost
increase for the DHB of $1,299,000 for energy.
Catherine Beard, executive director of the Greenhouse Policy Coalition says while it is excellent that the DHB is
investing in energy efficiency, the cost savings will be more than wiped out by the higher prices coming the way of all
energy users as a result of the emissions trading legislation.
"According to publicly available information the Otago District Health Board has a 30 MW coal fired boiler which uses
around 18kt of coal p/a. Assuming efficiencies achieved as a result of the new investment in energy efficiency reduce
that consumption to 16,810kt of coal per annum. At today's carbon price of $40/tonne of carbon you are looking at
needing to find an additional $1.3 million per annum."
Catherine Beard says the increased costs are conservative as they don't include the increase in electricity costs the
DHB will face as a result of the carbon charges.
Catherine Beard said the Greenhouse Policy Coalition, which represents industrials in the energy intensive sector,
believes that the emissions trading legislation is high risk for the economy because there are no limits to how high the
carbon price can go.
"In the absence of a deep and liquid global carbon market, carbon prices are currently being determined by political
decisions in Europe, rather than reflecting least cost emissions abatement."
"There are many problems with the legislation that will need to be fixed if we don't want to cause unnecessary economic
pain. One such problem is the lack of any mechanism to ensure a low and stable price. Australia is contemplating
achieving this via a price cap."
ENDS