The Government has done next-to-nothing on energy strategy so far; it is relegating the people in the sector who really know and care to giving it advice that it might or might not take. We need better.
Opinion: Germany’s allies badgered it for years about its dependence on Russian gas. But it only took the issue seriously after Russia invaded Ukraine. Now Germany and its European neighbours are scrambling to transform and secure their energy systems.
Some EU members, though, are already much further down the road to clean, reliable and economic energy. They are succeeding because they are ambitious and organised.
That’s the vital lesson for us in New Zealand as we get serious about transforming our own energy sector. This column is about that work. But first, a few more insights from Europe to help us.
Countries with high solar potential (such as Spain and Cyprus) and low solar potential (such as the Netherlands and Germany) are now generating roughly one-tenth of their power from solar. That suggests effective government policy, rather than local conditions, has been a crucial factor in determining which countries have seen the greatest growth in renewables.
“These countries demonstrate that if you put the right policy framework and incentives in place, very rapid growth is possible, and fossil fuels fall fast,” Charles Moore , the European programme lead at Ember, a UK-based NGO expert in energy transitions globally, says in a recent article in Energy Monitor.
It’s notable how far and fast the best countries have moved, as this chart shows:
Some countries have raced ahead to transition electricity systems
But also how slowly many countries have acted even though renewables are already far cheaper than gas.
Clearly complacency, vested interests, inertia and a lack of political will are serious drags on progress:
Renewables are more competitive than gas in many markets
Here in Aotearoa we have many energy advantages, particularly the high proportion of electricity already generated by renewables; and abundant, untapped sources to totally decarbonise our energy system including transport and industrial heat.
Now we also have our first, system-wide idea of what we have to do, and how we can do it, thanks to Low Carbon Aotearoa: An Energy Roadmap to 2030, a project of The Aotearoa Circle of business and government leaders. Its recently released final report is essential reading for anyone who uses energy. For the first time it sets this vital subject in its complete economic, social and environmental contexts, all within a Te Ao Māori well-being framework.
Starting last May, the project team involved dozens of sector leaders, organisations and government agencies, with 11 people from EY, the professional services firm, as its secretariat.
Its co-leaders were Chris Jewell and Bella Takiari-Brame. She is chair of The Lines Company, which serves central North Island electricity customers, and a director of ACC. He was chief financial officer of Genesis Energy until he recently became CFO of Lodestone Energy, which is building NZ’s largest, to-date utility-scale solar electricity project.
The road map scores 11 key measures of our energy sector on a scale of 1 (“very far off track based on the difference between current and target future state, and our current trajectory”) and 5 (“very well on track to meet or exceed our target future state”).
Transport and building emissions score 1. Energy affordability for households and communities; transition to renewables; industry emissions; and security score 2. Energy affordability for businesses; air quality; and reliability score 3. Resilience scores 4. And energy access scores 5.
Crucially it also tried to calibrate the energy sector’s impact on land, soils, water and biodiversity but to no avail. “There is currently no national tracking or reporting of land used for energy activities. As the land required for some activities (e.g. solar, biofuels) increases, this may become important to track.”
It looks to the future based on five principles: Systems thinking; just transition; informed and empowered consumers; well-signalled change; and being future-oriented and innovative.
When the Government takes over the work, relegates the sector to giving feedback, and defaults to timid bureaucracy and short-term political considerations the end result is usually deeply compromised. The strategy falls far short of what’s needed.
It focuses that future via eight themes: “Keeping whānau warm, dry and healthy; Redesigning how people move around; Rethinking freight and aviation; Setting low carbon trajectory for business and industry; Ensuring a co-ordinated transition; Enabling the new energy infrastructure we need; Achieving a diversified and reliable electricity sector; Moving towards a regenerative energy sector – we are far off track to meet the objective.”
In most fields, it gives data benchmarks for today and, where it can, targets we have to achieve. While many goals are ambitious, the ones on energy efficiency and liveability of housing are by far the most disappointing. This, though, was because of lack of data and ambition in the housing sector itself.
Lastly, it analyses the sector’s current and future states, coupled with commentary on “what we’re aiming for” and “what we’re trying to avoid.”
This is to-date the most complete, clear and cogent analysis of our present energy sector and the big future we need it to play, fast. It achieves this by rising above the rivalries and conflicts-of-interest that generally dog the sector. That’s abundantly clear from the report itself and from conversations with some key people deeply involved with producing it.
Finding a collective future
It’s typical of the highly collaborative and constructive way The Aotearoa Circle has worked since it was founded four years ago to put our natural capital at the heart of the future we’re creating for the nation.
The Circle’s first big project was on the finance sector to ensure it could play powerful roles in making the whole economy sustainable, and be sustainable itself. That led to the sector creating Toitū Tahua: Centre for Sustainable Finance. The Circle’s list of completed, current and planned workstreams is here.
In all such collaborative work in a sector, it takes time to build the social capital among members. Then they put aside their current preoccupations and conflicts and start working ambitiously and creatively on their collective future.
In many ways, the next step is the hardest: the Government has to join with the sector to create a truly national strategy which is widely supported and incentivises transformation.
But when the Government takes over the work, relegates the sector to giving feedback, and defaults to timid bureaucracy and short-term political considerations the end result is usually deeply compromised. The strategy falls far short of what’s needed; and the discouraged sector slumps back into near-term, self-centred and competing positions.
That’s exactly what happened to the Land and Water Forum 2009-18. Its members achieved deep and complete consensus on water reforms. But Key’s National-led government picked and chose only the elements it liked. That destroyed the consensus and deeply discouraged all those who had worked so hard to achieve it.
The nexus of issues around land use and water quality remain highly divisive; and the current government is trying once again to find and embed solutions.
Every single climate challenge we have to meet is even more complicated than those water issues. Only complete engagement of government and all participants involved in each issue, working in co-operative and co-equal ways, will solve them.
A few countries, notably in Scandinavia, do work in that way. Can we do so in Aotearoa? The energy sector is the prime candidate for doing so for the first time. It is crucial to us achieving a net zero economy, it is well-defined, closely linked and has shown with this Low Carbon Road Map it can rise to the challenge.
But tellingly The Circle called its work a Road Map “so as not to offend the government. They consider national strategy their purview,” said a participant in the work.
So, how’s the Ministry for Business, Innovation and Employment (…and energy and many other aspects of the economy) getting on with energy strategy? In reply to my phone calls and email, an MBIE spokesperson wrote:
“In May 2021, the Climate Change Commission recommended that the government develop a national energy strategy to decarbonise the energy system.
The Government has committed to developing such a strategy and further details will be available when the Government sets the emissions budgets for three budget periods and finalises an Emissions Reduction Plan. The Government has committed to announcing its decisions by 31 May this year.
Work on an energy strategy will begin in earnest after the Emissions Reduction Plan is published and there will be a chance for organisations to feed into the formation of the strategy later in the year.
Given the strategy isn’t yet being developed and the details of its scope still to be determined, we politely decline the request for an interview. We would be better placed to do so once work is well underway.”
In other words, the government has done next-to-nothing on energy strategy so far; it is holding tight to the strategy role; and is relegating the sector – the people who really know and care – to giving it advice; which it might or might not take.
That’s exactly the sort of government behaviour that helped get us into this mess; it’s precisely the sort of government behaviour that will guarantee we won’t get out of it – on climate or any other subject.
Come on, government. You need our help; we need yours. Involve us. Together we can solve the climate crisis.