Clean energy can be New Zealand's competitive advantage
Aotearoa New Zealand is being challenged to be ambitious - making use of its renewable energy potential and ‘grow to zero’ to confront the impacts of climate change, in a just-released white paper by energy distributor Powerco.
Entitled ‘Grow to zero – clean energy can be Aotearoa New Zealand’s competitive advantage for economic growth’, the paper states that “unless we’re ambitious, we will not create enough wealth to have the first world infrastructure and lifestyle we want for ourselves, our tamariki and our mokopuna as we confront the impacts of a changing climate”.
“We can’t wait. Climate change is accelerating. The reality is that New Zealand is the recipient of a climate delivered by larger countries with bigger economies and, so far, they’re not moving fast enough.”
Powerco Chief Executive James Kilty says the ‘Grow to zero’ white paper makes the case for leveraging New Zealand’s low carbon energy system to foster a robust economy capable of withstanding the challenges posed by a changing climate.
“More work is needed to identify the industries and businesses that can be attracted to New Zealand to leverage our clean energy system. The first step, however, is alignment – that Aotearoa offers an international advantage that should be leveraged for the benefit of all New Zealanders,” he says.
“We’re the lucky country. We have an extraordinary endowment of renewable energy resources that we can leverage to produce goods and services in a low-emissions way, while remaining internationally competitive, and growing our economy. Capital markets around the world are looking for clean, green energy sources in which to invest, so they can reduce their emissions and meet their own targets.
“Here, in New Zealand, we have the solutions all around us. We have everything we need to attract investment here, while reducing global emissions and tracking New Zealand towards its own international targets.”
New Zealand may have a comparative head-start by having one of the cleanest energy systems in the world but could easily lose that competitive advantage if it doesn’t act to leverage it by growing existing industries and attracting new industries.
The paper calls for an energy strategy that provides clarity on the long-term direction for New Zealand’s energy system and the role of energy in meeting the country’s net-zero 2050 target. Stable direction and policy settings provide the “critical foundations to encourage investment, enable innovation and reduce any perception of sovereign risk”.
Key actions include:
- A goal to support the transition to net-zero 2050 affordably and securely, measured by the internationally accepted energy trilemma.
- Policy to be fuel and technology agnostic – the goal is economy-wide emissions reduction, not energy industry emissions reduction. Our energy system is the solution, not the problem.
- No arbitrary ‘cliff-face’ targets. This is a transition, and the pace of the transition must be set by customers and markets competing in a global context to keep New Zealand competitive.
- Encourage the use of domestic resources for energy resilience.
- Allows well-governed markets to innovate to meet customers’ needs, while maintaining an ability to intervene if security of supply and affordability threaten to impair our international competitiveness.
- Establish a climate change adaptation objective for energy regulators to support investment levels needed in energy expansion and resilience.
- Ensure an enabling international investment environment.
- Resource Management Act streamlining for energy infrastructure activities. This is about an enabling environment for routine or low impact activities, protection for existing energy infrastructure, and a fast-track consenting regime for energy projects. A National Policy Statement (NPS)/National Environmental Standards (NES) for distribution remains a gap.
- Infrastructure financing tools available for large load customers requiring significant network upgrades for connection (eg EV charging hubs).
