Editorial: Genesis’ coal, gas call - NZ needs sensible energy, power supply approach

More wind farms are being built but more are needed to ensure consistent supply. Photo / Brett Phibbs

EDITORIAL

The move by Genesis Energy to buy more coal because of concerns about declining gas production has upset environmentalists, who believe it is a backward step.

No one really wants New Zealand to have to burn coal to produce power. But the reality is we are not quite there when it comes to being able to offer a smooth supply of power using renewable energy.

There are times when it doesn’t rain enough to fill up the lakes and the wind doesn’t always blow consistently. Power generators are spending billions on building more solar and wind farms.

At the same time, demand is rising with the move to electric vehicles - be it a car, truck, bus or ferry.

But we aren’t able to guarantee a winter without potential blackouts yet. Gas has been a solution to fill the gap but supplies are falling. Genesis chief executive Malcolm Johns says gas production has dropped about 30 per cent faster than expected.

The less gas there is available, the more the company has to rely on coal.

The previous Government’s decision to stop oil and gas exploration in 2018 came too soon. New Zealand needed to ensure it had reliable alternatives lined up before turning the switch off.

It takes time to get resource consents in place for solar and wind farms and then build them. It also requires getting investors on board to back the project and convincing them they will make enough of a return to make it worthwhile.

Gas is a stop-gap measure. It has lower carbon emissions than coal. Genesis will be importing coal from Indonesia, so that will also add to emissions through transporting it.

New Zealand has its own coal reserves but they are lower quality than Indonesian coal.

Lifting the ban on oil and gas exploration is ranked 19th on the National-led Government’s new 36-point “to do” list.

But even if that happens soon, it won’t be a matter of just flicking the switch. Oil and gas companies have been put off operating in New Zealand and will fear a political climate where a change in government can see a flip-flopping in policy.

And even if operators do come back and find gas, it takes up to six years to bring the field to fruition.

New Zealanders want to know with certainty that on a cold winter’s night they can flick on their heater without worrying about the power going out.

A bi-partisan approach is needed across the political spectrum to ensure that through successive governments there is a plan to ensure continuous power supply while also transitioning to low emissions.

About 85 per cent of New Zealand’s power is already supplied through renewable energy.

But it needs to be reliable as well.

The Government needs a plan to ensure continuous power supply now and into the future as well as lowering carbon emissions. Otherwise New Zealand risks an expensive carbon offset bill in the future.