The future of thermal power generation in New Zealand

Abstract

This study focuses on a potential conflict between economic policy and environmental policy in New Zealand. On the one hand, New Zealand has an economic policy of deregulation; on the other, an environmental policy aimed at limiting greenhouse gas emissions is being developed. The first has been a hallmark of Labour's economic reform since 1984; the second reflects the tremendous concern that has arisen over the threat of global climate change. One of the aims of deregulation is the opening up of electricity generation to competition. Electricity supply authorities may soon own power stations. One competitor, the giant multinational, Consolidated Zinc Rio Tinto Australia (CRA) showed signs recently of wanting to break Electricorp's monopoly. The CRA proposal was for a 1000 MW coal burning power plant at Bream Bay in Northland. A simple back-of-the-envelope calculation on the carbon dioxide that would be emitted by this proposed plant triggered off this study. This single power plant would increase energy related carbon dioxide emissions in New Zealand by about 30% and it seemed to us that this would more than negate any strategies aimed at reducing carbon dioxide emissions. While this report was still in a draft form and undergoing review, the immediate issue was defused by an announcement from CRA that the Bream Bay plant was to be deferred indefinitely. Shortly afterward, Electricorp announced that the mothballed Marsden B power station is to be commissioned. In the light of these announcements, we have made some minor changes to the report