13 March 2007

Responding to global consumer demands, New Zealand is aiming to develop a sustainable and affordable energy system that minimises greenhouse gas emissions and delivers a lasting competitive advantage over other countries.

The vision is spelled out in a draft energy strategy that covers the period to 2050 and proposes that as much new electricity generation in New Zealand as possible should be renewable. It has been welcomed by leading energy providers, with leading power company Meridian Energy saying the strategy sets a pathway towards an energy system for New Zealand that could be the envy of the world.

Koustubh Gadgil, Investment Manager with Investment New Zealand, says New Zealand has outstanding natural resources for generating sustainable energy.

“New Zealand is able to produce large amounts of low-emission electricity from renewable resources, such as hydro and wind, which are plentiful and cheap by world standards.”

A significant proportion of New Zealand’s energy generation comes from renewable resources, including water, geothermal resources and wind. There is strong potential to meet predicted increases in energy use of up to 35 percent over the next 20 years with new forms of renewable energy. New Zealand also has resources of coal and lignite that could be important in the future if carbon capture and storage become technically viable and economic.

Promoting greater use of renewable energy is also a key goal. The transport sector is a significant user of fossil fuels and New Zealand is demonstrating its commitment to reducing the dependence on and consumption of fossil fuels by legislating a Biofuels Sales Obligation, making it one of the first countries in the world to do so. Wide-ranging research projects into biofuels are underway, supported by both public- and private-sector investment.

The New Zealand Government’s energy strategy includes ways of stimulating energy innovation in other areas such as geothermal, marine energy and carbon capture and storage. This could see the introduction of tax credits for research and development into sustainable energy and an accelerator fund to help take promising technologies to market.

The Government will establish a fund to assist the deployment of marine-based electricity generation, such as wave or tidal systems.

Initiatives to encourage more solar water heating and more energy-efficient homes and buildings are also planned.

“New Zealanders are also quick to create and use new technologies and these advantages, combined with the comparatively low imprint from climate change, mean there are exciting opportunities for technology development and transfer,” says Koustubh Gadgil.

Alongside the draft energy strategy, the Government has released a discussion paper on long-term options for addressing greenhouse gas emissions and another on ways to encourage renewable energy and limit emissions in the electricity and industrial sectors.

To read the strategy, visit www.med.govt.nz/upload/43136/draft-energy-strategy.pdf.

For more information, please contact:

koustubh.gadgil@investmentnz.govt.nz

+64 4 910 4385