Minister confirms critical role of gas

Natural gas is certainly going to be needed in the medium term during New Zealand’s energy transition, the Minister of Energy, Simeon Brown, told a business breakfast audience in Wellington last week.

“There is no escaping that we need non-renewable energy as part of the mix in the next period of time, as we move towards 2050.

“Gas is going to play a critical part in that transition – firming wind and solar generation to ensure that we can keep the lights on.”

Speaking at a breakfast hosted by the Business NZ Energy Council and Meridian, the Minister said the government wanted to bring more certainty to the energy markets to provide the conditions that encouraged investment.

It wanted the market to decide the priorities for the investment needed and was not in the game of “picking winners”.

Two of the Government’s immediate priorities were designed to restore certainty. The first was to scrap the Lake Onslow project which had had “a chilling effect on investment”, he said.

The second was to overturn the last Government’s 100 percent renewable electricity target by 2030 – “which was unrealistic and would simply put impossible costs onto consumers”.

This 100 percent target “made perfect the enemy of good”, he said.

The Minister said the Government was 100 percent committed to its 2050 climate obligations, but said it had to balance affordability, reliability and sustainability.

“We have to focus on all three. We need a balanced approach to energy policy.”

He said the balance had tipped in the wrong direction under the last Government.

“Something has gone wrong.”

This included the ban on oil and gas exploration, which meant “energy security was put at risk by not having the investment needed – particularly for gas, which is a critical feature in making sure our renewable energy markets are able to be firmed appropriately”.

“Overturning the oil and gas ban is something that my coalition partner, the Minister for Resources, Shane Jones, is working on currently as a priority.

“We are also looking at things like carbon capture and storage to ensure we can provide the certainty to the market so it can reinvest in gas.”

“Keeping the lights on over the next couple of years is the number one priority.”