Planning rules will need amending if the country is to increase its use of renewable energy at least cost to the environment and consumers, MPs heard today.

The current national policy statement on renewables is “very weak” and doesn’t give councils sufficient direction on how they should be approaching projects, Meridian Energy chief executive Neal Barclay says.

The company has also been working with officials on how the national policy statement on fresh water management could be amended to better reflect the country’s reliance on hydro generation.

“They are hearing us, so I think we are seeing some movement on that,” Barclay told Parliament’s transport and infrastructure select committee today.

“There’s no free lunch here. If we want to avoid carbon emissions and we want to decarbonise our economy then we are going to have to take a position on these renewables and we’re going to have to make sure they can get consented.”

The government wants to see greater electrification of industry and transport to help meet its climate change goals. Last year, national grid operator Transpower estimated that up to 60 terawatt-hours of new renewable generation – equivalent to about four wind farms a year – could be needed to meet that new demand and also replace the country’s coal- and gas-fired generation over time.

Barclay told the committee that Transpower’s projections are “quite bullish” and that he believes on-going energy efficiency gains will tend to “feather-off” the volume of new generation capacity required over time.

Hydro, geothermal and solar will all play a role, but rapidly falling costs mean wind will meet most of the country’s future load growth, he said.

Even if only two or three new wind farms were being built annually “it’s going to change the landscape in this country – there’s no doubt about it,” Barclay said.

“That’s why we’re calling out for a national policy statement on renewable energy that acknowledges that, and gives councils the right degree of direction when they’re assessing the national versus the local impact of new generation.”

Trustpower spent almost five years consenting the 100 MW wind farm Genesis Energy and Tilt Renewables are advancing near Waverley.

About two-thirds of the submissions on Kaimai Wind’s proposed development near Paeroa are opposed. The company wants to install 24 turbines – some up to 207 metres high – on the hills east of Tirohia. A hearing is expected mid-year.

Meridian is currently reworking consents it has for wind farms near Waiouru and north of Napier so it can deploy larger, more efficient turbines.

Barclay told the committee that community buy-in is key to consenting new projects and generators should be held to the highest standards.

But he said the consenting process is long and drawn out and projects “end up going through the Environment Court inevitably.”

“If we can do something that doesn’t take away the onus on companies like us to do the right things by the communities and those affected parties, but can speed the whole thing up and get the right outcome, that’s really what we need.”

Earlier today, Transpower chief executive Alison Andrew told the committee that New Zealand’s hydro-generation means it can integrate more variable renewables like wind and solar into its power system, and more easily, than other countries can.

But that depends on the country maintaining sufficient deep fuel storage – currently provided with coal and gas – for when the lakes are low.

Other options, like pumped hydro, are all “quite costly.” New options will develop over time, but the country needs to be careful not to remove the thermal generation it relies on when the lakes are low until it has a cost-effective alternative.

“This is a challenge we have to solve,” she said. “We need to work toward a solution on this.”

Yesterday, Barclay told journalists and analysts that the government’s target to achieve 100 percent renewable electricity supply by 2035 is not economically feasible; 95 percent may be.

Today he told the committee that gas is likely to remain the most economic option for backing up hydro for the foreseeable future.

The country doesn’t need to dam new rivers, but amending the consents for some schemes could “stretch” the resources available and also help meet that deep storage challenge.

Barclay said Meridian’s consented projects give it options to bring forward during the next eight years. It is now looking to extend that pipeline. Other generators also have consented options and all have the right commercial incentives to bring those to market.

Barclay said some of Meridian’s longer-term options could include partnerships with communities, as currently happens with some Danish wind projects. Having a community “owning a piece of the kit” changes their perspective on why it is there, he said.

“I don’t see new generation being the issue at all. The big issue is largely about the deep storage we need to ensure that we can continue to support our hydro backbone.

“If we can stretch the existing lakes, in terms of the flexibility that the hydro operators have, that can be worth a lot. It can actually go a long way to improving the deep storage issue.”

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