Increasing security of supply into Auckland

Thank you for the opportunity to join you at the commissioning of your new gas-fired turbine generator, which will play a role in maintaining security of supply in and north of Auckland.

---------------------------------

Address at the commissioning of the Mighty River Power Southdown Expansion
9.30am, 29 March 2007, Southdown Co-generation Power Station, 202 Hugo Johnson Drive, Penrose, Auckland

Thank you for the opportunity to join you at the commissioning of your new gas-fired turbine generator, here at your Southdown Cogeneration Station.

This is an important addition to your portfolio of generation, located as it is close to the heart of our most rapidly expanding city.

It will play a role in maintaining security of supply in and north of Auckland.

It does not, of course, in any sense obviate the need for transmission upgrades to ensure long-term security of supply for the greater Auckland region and points north.

The Electricity Commission and Transpower agree that a major new transmission line into Auckland from the south will be needed by between 2011 (Transpower) and 2013 (Electricity Commission).

The 36 percent increase in the capacity of the station will assist the capacity of the electricity system as a whole.

You will know, from the draft New Zealand Energy Strategy, that our long-term goal is to have the country's electricity produced from renewable sources to the greatest extent possible.

As articulated in the NZES, our vision is for a reliable and resilient system delivering New Zealand sustainable, low-emissions energy.

We plan to do this by:

- Providing clear direction on the future of our energy system

- Maintaining high levels of security and reliability at competitive prices

- Maximising how efficiently we use our energy to safeguard affordability, economic productivity and our environment

- Maximising the proportion of energy that comes from our abundant renewable energy resources

- Reducing our greenhouse gas emissions

- Promoting environmentally sustainable technologies.

The impact of unmitigated climate change is a serious issue facing all countries.

Given the imperative for the world to reduce greenhouse gas emissions, and the likelihood that emissions will carry an economic cost to our country in the future, it is vital that we alter our growing energy emissions.

As you know, we have a long tradition of providing much of our energy from local renewable sources, and your company has played a major part with its string of Waikato hydro stations.

In fact, the complementary nature of the Southdown station and the Waikato hydro system has enabled you to provide a consistent level of total generation output over a wide range of climatic conditions in recent years.

The cogeneration concept on which this station operates enables you to deliver both electricity and steam from the single natural gas source - a very efficient use of the raw fuel, with the ability to now produce up to 1400 GWh of electricity per year, and up to 24 tonnes of steam per hour.

Turning now to another of your company's interests, I believe that in the debate over the increasing use of renewable sources, geothermal energy hasn't always received the attention that it deserves - and in my view, its bright future deserves more recognition.

The draft NZES proposes that for the foreseeable future, all new generation capacity come from renewable sources, except to the extent needed to maintain security of supply (a constraint that is some distance away).

By the foreseeable future we really mean until carbon capture and storage technology arrives as both a technically feasible and cost-effective alternative.

While of course fossil fuels will continue to play an important role in electricity generation for many years to come, their use does produce greenhouse gas emissions.

Geothermal energy is an environmentally responsible alternative to energy derived from fossil fuels, because it is a low carbon-emitting source relative to fossil fuels.

Carbon dioxide emissions could be significantly reduced if geothermal energy was further developed. This would assist New Zealand in meeting its commitments under the Kyoto Protocol, and would help the world reduce its greenhouse gas emissions.

Geothermal energy is renewable, requires no external fuel, and in many instances is expected to cost less than other types of renewable electricity.

It also operates at high load factors, providing reliable base load.

Our geothermal resource base is large, and is already the second largest renewable energy source contributing to the national energy supply.

About 6 percent of total electricity generation, and 34 percent of primary renewable energy supply, is derived from this source.

Your company has rightly recognised the considerable advantages of geothermal energy as a supply that is not dependent on wind or rain, and its very important role to play in providing diversity of secure energy supply during dry or calm periods in our weather patterns.

I was consequently delighted to learn that construction of your new geothermal power station at Kawerau commenced late last year.

This is indeed a sizable project - at a cost of around $275 million and an output of 90 MW - and demonstrates your further commitment to harnessing renewable sources of energy.

I understand that you have further plans to develop around 400 MW of geothermal energy over the next five to ten years.

I have also noted your interest in exploring wind energy initiatives, with wind monitoring being undertaken for prospective sites.

This demonstrates a commendable long-term commitment to renewables,
and is the sort of initiative that the government will encourage and support in any way that it can.

Returning to this station, your expansion here is an illustration that recent efforts to find more gas in New Zealand have succeeded.

New Zealand's known gas reserves have increased significantly in the last two years, which is also very good news for those interested in our electricity security of supply and prices.

The confidence that you will have access to affordable gas supplies for this new facility will have been central to your investment decision.

Thank you again for inviting me, and I look forward to "pushing the button" in a few minutes.

ENDS

© Scoop Media