Proposed National Policy Statement for Renewable Electricity Generation Management: Section 32 Evaluation

Preface

Executive Summary

1 Introduction

2 The Status Quo

3 Alternatives to the Status Quo

4 Section 32 Evaluation Methodology

5 Evaluation of the Proposed National Policy Statement for Renewable Electricity Generation

6 Risks and Uncertainties

7 Conclusions

Appendix A: Estimate of Costs

7 Conclusions

This report provides an evaluation of the proposed national policy statement for renewable electricity generation in accordance with the requirements of section 32 of the RMA.

Analysis of the status quo leads to the conclusion that the RMA does not clearly establish the significance of the benefits of renewable electricity generation projects, which by their nature can compete with other environmental values and are often felt at the national level.  Renewable electricity projects will in almost all instances require council officers and decision-makers to weigh competing environmental, social and cultural values throughout the resource consent process.  Within a regulatory framework that does not clearly establish the weight to be given to the benefits of renewable electricity generation, or provide clear guidance on how to balance national versus local effects, these judgements are complicated and can take time for a responsible decision-maker to make.  This will have a compounding effect and will have a significant bearing on the time it takes to process consent applications.  It is, therefore, considered that the critical factor influencing the time it takes to gain consent is the compounding effect of uncertainty within the regulatory framework.

Similarly, and perhaps more importantly, without clear indication of the significance of the benefits associated with renewable electricity generation, decision-makers may find it difficult to weigh these benefits when considering applications subject to Part II of the RMA.  This has led to uncertainty in the marketplace, potentially discouraging investment in some instances and potentially frustrating development opportunities into the future.

Because of the high-level guidance provided by the proposed NPS and the complexity of the marketplace and regulatory framework within which it will apply, it has not been possible to accurately quantify the costs and benefits of the proposed Objective and policies.  However, it is possible to identify areas where costs and benefits are expected and to make preliminary estimates of the potential economic costs of the proposed NPS.

The principal benefits and costs of the proposed NPS can be summarised as follows:

• the proposed NPS will promote an increase in the proportion of electricity generated from renewable sources in accordance with the government’s target for renewable electricity generation of 90 per cent by 2025.  This will result in the development of a diverse and resilient generation sector, which will in turn increase the security of electricity supply.  A reduced dependence on fossil-fuel generation will minimise the country’s exposure to fluctuations in resource (oil and gas) prices, limit the extent of its economic liabilities on the international carbon market flowing out of New Zealand’s international climate change obligations, and have positive implications for the wellbeing of New Zealanders

• clear statutory recognition of the national benefits of renewable electricity generation provides generators with a degree of certainty that decision-makers will give appropriate consideration to these benefits when considering plan provisions and applications

• the total present value cost of the proposed NPS is estimated to be $23.5 million.²⁰  Specific costs associated with the project are:

  • government: guidance and workshops: $260,000 (undiscounted cost in the first year following approval)
  • local authorities (territorial authorities, unitary authorities and regional councils):staff training, plan change notification and hearings: $19.9 million (undiscounted cost spread over years two to five following approval), public education and advocacy in support of innovation in the field of renewable electricity generation: an additional $3.1 million (undiscounted spread over 20 years following approval)
  • generators: plan advocacy: $7.3 million (undiscounted cost spread over years two to five following approval)
  • local community stakeholders and NGOs: the NPS is likely to stimulate an increased level of community involvement in plan formulation via submissions, with the costs of advocacy amounting to $3.4 million (undiscounted cost spread over year’s two to five following approval)

Overall, this evaluation has found that the proposed NPS will promote the sustainable management of natural and physical resources.  The Objective of the proposed NPS is considered the most appropriate way to achieve the purpose of the RMA, and the policies of the proposed NPS are considered to be effective, efficient and the most appropriate for achieving the Objective.

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