The unintended of consequences of ill-conceived policy

Labour and the Greens announced that they were prepared to implement a North Korean style central power regulator and buying mechanism on the premise it would lower prices.

Report after report and real life examples have proven otherwise. Another unintended consequence is that renewable energy projects would be unlikely to proceed and instead thermal solutions sought.

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.

Labour and the Greens have jointly proposed scrapping the wholesale energy market in favour of a single state-operated buyer of electricity, called NZ Power, claiming the move would save hundreds of millions of dollars on consumer power bills.

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.”

Afterwards Binns said he saw “a little bit of irony . . . from a green perspective” that the proposal might favour thermal energy, but admitted the fears were based on what limited detail the two parties had provided.

“I think probably they [Labour and the Greens] owe it to the electorate to provide some details as to how this would actually operate,” he said.

Oh the irony.

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