Labour/Green policy would lead to less renewables

I saw a tweet by Chris Tremain which said:

Meridian acknowledge at Financial Review that Labour/Green Single Electricity Mkt proposal would have negative impact on renewables! Wow!

Surely this is not true. With all their claims we must go carbon free and have more renewable energy, would they really have a policy that would discourage renewables? It seems so.

Hamish Rutherford at Stuff reports:

The head of New Zealand’s largest electricity generator says the Opposition owes it to New Zealand to give more details of its power plans.

And he warned the plan could undermine investment in renewable energy.

Today Mark Binns, chief executive of Meridian Energy, told the commerce select committee that while a lack of detail meant it was hard to properly analyse the plan, Meridian believed it would favour thermal generation over renewable plants such as wind farms.

“Our view is it would potentially impact on renewables because it would make thermals, particularly gas plants – which are easier to consent and easier to put in place quickly – more viable in that environment,” Binns told MPs..

“If you have a central buyer, the Crown has the responsibility for deciding the next wind farm or other power that is required, and wind farms take between five and 10 years to consent.

“Why would we keep investing in developing renewable options, given the uncertainty around central buyer?

“The reality is it’s much easier for someone like Todd Energy to basically get a piece of land with gas to the front door, and strap on a jet engine to a lump of concrete and generate electricity.”

Now Meridian know what they are talking about. They are the largest provider of renewable energy and it is a big part of their brand. They are very big on renewable energy. But as their CEO points out, the Labour/Green policy will encourage non-renewables.

Also not even Gareth Morgan agrees with their policy:

Today economist Gareth Morgan waded in to the debate, saying the issue of poverty was linked more to tax and welfare than the electricity market.

“There is little reason to think that the benefits from the Labour-Greens proposal would go to the people that actually need it,” Morgan blogged today.

He also dismissed the idea that the plan was a way to solve the problem that owners of hydro plants get to use water, a public resource, for free.

“If it is now deemed unfair that hydro generators can use water for free, then charging generators for water use would be a better remedy than tinkering with the electricity market,” Morgan wrote.

He added there was “no evidence of price gouging” in the wholesale electricity market, and the problem, if there was one, was more likely in the retail market.

I can’t think of a single reputable figure who thinks the Labour/Greens policy will work. It was savaged by Professor Frank Wolak, whose work they cited as the reason for their policy.  Helen Clark refused to do it, because she knew it would not work. It’s arguably the worst of their many bad policies.