Contact’s ‘40 per cent challenge’

30 March 2007

Contact’s ‘40 per cent challenge’ to cut electricity emissions

Greenhouse gas emissions from New Zealand’s electricity system can be cut by 40 per cent within seven years, Contact Energy chief executive, David Baldwin, said today.

Mr Baldwin said in developing Contact’s submission on the Government’s draft New Zealand Energy Strategy, it had become clear that reducing greenhouse gas emissions from electricity generation by 40 per cent within seven years was achievable.

Contact today released its submission on the draft New Zealand Energy Strategy. The submission can be viewed on the Contact website www.contactenergy.co.nz.

“The electricity generation sector can cut emissions of greenhouse gases quite quickly, and Contact’s submission on the draft strategy shows how,” said Mr Baldwin.

“This is our challenge to the generation sector. Contact is adopting the 40 per cent target as a company goal, and we hope other players will join us,” he said.

“Achieving this goal will require the right policy settings, including on carbon-pricing, the ability of new gas-fired generation to displace coal and the ability to consent significant renewable projects without unnecessary delay.

“If the eventual energy strategy delivers these policy outcomes, New Zealand’s energy generation sector can lead the world in significantly reducing its carbon dioxide emissions and building upon what is already a clean, renewable base.”

Mr Baldwin said Contact would lead the way towards realising these reductions through the Contact Energy Climate Change Action Plan, which could deliver a reduction of around 2.5 million tonnes of carbon dioxide emissions annually from generation-based activities. This would be well over half of the 3.2 million tonnes which makes up the 40 per cent target.

The Contact Energy Climate Change Action Plan is a combination of new generation initiatives, and a programme to help the company’s more than 500,000 customers reduce their personal greenhouse gas emissions by one million tonnes by 2014.

“Contact plans to invest up to $2 billion in new renewable wind and geothermal projects over the next five years, with baseload geothermal generation in particular able to displace thermal generation,” said Mr Baldwin.

Contact’s submission also illustrates how using modern gas-fired plants to displace older thermal generation can significantly reduce carbon dioxide emissions.

“While we have deferred an investment decision on our consented Otahuhu C gas-fired power station, our analysis shows this plant has an important future role to play through displacing existing high-emission plant and ensuring the country’s thermal generation is as clean and efficient as possible,” said Mr Baldwin.

Mr Baldwin acknowledged there would be competition to upgrade the country’s thermal generation fleet in order to displace older, less efficient plant, but Contact believed its consented Otahuhu C site was the best and most advanced option for New Zealand.

“The role of thermal generation for energy security must not be ignored. Even generators with only renewable plant rely on thermal power stations from other generators, without which they could not currently provide New Zealanders with a secure electricity supply.

“Introducing a market-based price for carbon and displacing old, inefficient thermal generation with new renewables and high-efficiency gas-fired plant are the keys to significantly reducing the electricity sector’s emissions.”

Mr Baldwin said while electricity generation emissions made up just 10 per cent of the nation’s total, the generation sector could lead the rest of the New Zealand economy into taking action and making a real difference.

“We understand that our customers and the public are concerned about climate change and Contact is committed to making a difference and helping to actually reduce carbon dioxide emissions.

“Our submission on the draft New Zealand Energy Strategy shows how the vision of a cleaner and more climate-friendly energy sector can be achieved,” he said.

ENDS

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