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Submission on 'Central Wind Windfarm' Resource consent applications

Statement of Submission

Appendix 1

Appendix 2

APPENDIX ONE

CROWN SUBMISSION ON AN APPLICATION FROM MERIDIAN ENERGY LIMITED FOR RESOURCE CONSENT TO ESTABLISH, OPERATE AND MAINTAIN A WINDFARM KNOWN AS ‘CENTRAL WIND WINDFARM’

The Crown’s overall position

The Crown considers that wind power is a viable energy source; that its development will help ensure security of supply through providing additional generation capacity and diversification in electricity production methods; and that it is an environmentally responsible alternative to using fossil fuels for generation.

The proposed Central Wind windfarm is well aligned with the government’s energy objectives to deliver security of supply with an increasing focus on renewable energy sources. The proposal also aligns with the government’s commitment to action on climate change.

In developing this submission, the Crown has focused on the actual and potential effects on the environment at a national level. This submission, therefore, sets out the Crown’s views on the national impacts of the proposal, and does not consider the actual and potential effects on the local environment. 

The Crown acknowledges that there may be some adverse effects, and that some of these may involve matters which are identified in Part 2 of the Resource Management Act (including matters of national importance under section 6), which are matters to be taken into account in the decision on the application.  The Crown has identified potential adverse effects on the environment, and believes that conditions can be imposed that would ensure those effects are adequately addressed.  The conditions sought are attached as Appendix Two.

One neighbouring land owner (the New Zealand Defence Force) has reached a separate agreement with Meridian Energy Limited regarding vehicle access over Defence (Crown) land north of the application site.  This agreement will facilitate access for the construction of the windfarm and will provide secondary access for ongoing maintenance of the windfarm.  The Defence Force has provided Meridian Energy with written approval under section 94 of the RMA to the consent applications for development of the access road. 

While supporting the proposal because of its national significance, the Defence Force has concerns about the potential for radio frequency interference from the windfarm to effect military communications in the area. This issue has arisen very recently and is the subject of ongoing consultation between the Defence Force and Meridian. The Defence Force is therefore lodging a separate submission supporting the proposal on the condition that the applicant can establish that interference effects are insignificant.  

In considering this resource consent application, the consent authority will need to determine whether the proposal meets the purpose of the Resource Management Act – to promote the sustainable management of natural and physical resources. This will involve consideration of, amongst other things, the relative significance of local and national effects and how those effects are to be addressed.

Why the proposal is of national significance pursuant to section 141B(2)

Under section 141A of the Resource Management Act, the Minister for the Environment has the power to intervene in resource consent applications.  When doing so he must have regard to the factors in section 141A(3): factors of national significance, the local authority’s capacity, and the appropriate power to be exercised. These powers include making a submission on the matter for the Crown when a matter is, or is part of, a proposal of national significance.

It is considered that the relevant factors which make the Central Wind windfarm proposal nationally significant in terms of section 141B(2) include:

• the widespread public interest regarding the actual or likely effect of the proposal on the environment,
• the significant use of natural and physical resources,
• the proposal affects, or is likely to affect, or is relevant to, New Zealand’s international obligations to the global environment, and
• the proposal is likely to affect more than one region or district, given that the benefits of the proposal (such as the benefits associated with increased use of renewable energy) are likely to be national in effect.

Given this national significance, the government considered it appropriate that a Crown submission be made on the Central Wind windfarm resource consent application, so that the national effects are fully canvassed.

Contribution to Government’s Policies and Objectives

The New Zealand Energy Strategy

New Zealand, like the rest of the world, faces two major energy challenges. The first is to respond to the risks of climate change by reducing the greenhouse gases caused by the production and use of energy. The second is to deliver clean, secure, affordable energy while treating the environment responsibly.

In October 2007, the government released the New Zealand Energy Strategy to 2050 (NZES).  The NZES sets out the Government’s vision of a reliable and resilient system delivering New Zealand sustainable, low emissions energy services, through:

• Providing clear direction on the future of New Zealand’s energy system
• Utilising markets and focused regulation to securely deliver energy services at competitive prices
• Reducing greenhouse gas emissions, including through an emissions trading scheme
• Maximising the contribution of cost-effective energy efficiency and conservation of energy
• Maximising the contribution of cost-effective renewable energy resources while safeguarding our environment
• Promoting early adoption of environmentally sustainable energy technologies
• Setting a target of 90 percent of New Zealand’s electricity being generated from renewable sources by 2025. The setting of a target is required by the Energy Efficiency and Conservation Act.
• Supporting consumers through the transition.

The New Zealand Energy Efficiency and Conservation Strategy (NZEECS) was also released in October 2007 as a companion strategy to the NZES.  It is the government’s detailed action plan for energy efficiency, conservation and renewables.  It is a requirement under sections 8-9 of the Energy Efficiency and Conservation Act 2000. The purpose of that Act is to promote, in New Zealand, energy efficiency, energy conservation, and the use of renewable sources of energy.

The Central Wind windfarm would make a significant contribution to the government’s renewable electricity target.  It would help New Zealand move towards a sustainable energy system by:

• securely delivering energy services at competitive prices;
• maximising the contribution of cost-effective renewable energy resources while safeguarding our environment; and
• contributing to a reduction in New Zealand’s greenhouse gas emissions.

How the Central Wind windfarm would achieve this is set out in more detail below.

The NZES builds on the government’s Sustainable Development Programme of Action. That programme identified energy as one of the target areas for sustainable development not only because of its correlation to both economic growth and its potential environmental impact, but also because consumers and businesses are heavily reliant on its supply.

The Crown is of the view that the consent authority should have regard to the NZES and the NZEECS in terms of section 104(1)(c) of the Resource Management Act, and in light of section 7(j) which requires persons exercising functions and powers under the RMA to have particular regard to the benefits to be derived from the use and development of renewable energy.

Security and reliability at competitive prices

Maintaining security of energy supply at competitive prices is essential for a modern economy.  Supply interruptions and steeply rising prices cause social stress and hardship. 

Long-term security of supply requires:

• Building enough generation capacity to meet demand;
• Ensuring there is enough fuel (taking into account the uncertainty of hydro inflows and wind flows) to generate sufficient electricity at all times;
• Building and maintaining a transmission system to convey power from generation plants to consumers, particularly at peak times; and
• Making the most of cost-effective energy efficiency opportunities.

Building enough generation capacity to meet demand

Demand for electricity is growing. Electricity demand is projected to grow at around 1.3 percent per annum over the period to 2030¹. 
Energy efficiency and conservation measures, along with technologies such as solar water heating, are vital and necessary parts of New Zealand’s future energy mix. However, these measures and technologies will not be enough to offset the need for new generation in the short to medium term. There is a pressing need to build new generation capacity to meet this growth in demand.
New Zealand currently has around 6300 MW of renewable generation capacity, and 2900 MW of fossil fuel generation, providing around 40,000 gigawatt hours of electricity per year. Under current forecasts, electricity demand is expected to grow by around 22% by 2025, which would require approximately 3200 MW of additional generation capacity to maintain security of supply. 
The Central Wind windfarm, at a maximum capacity of 130 MW, would contribute to the increased generation capacity required to satisfy demand, while reducing New Zealand’s dependence on non-renewable energy sources.

Ensuring there is enough fuel to generate sufficient electricity at all times

Diversification of generation types and location is also important for ensuring there is enough fuel to generate electricity. 
Around 55 percent of New Zealand’s electricity is generally from hydro generation. New Zealand’s heavy reliance on hydro-generated electricity leaves it vulnerable to the effects of dry years.  In comparison, wind currently contributes 2.2 percent of total electricity generation. 
One of the considerable advantages of electricity generated by wind is that it can help complement hydro-generation. Typically, there is still wind available in dry years or during periods of low expected rainfall, allowing water to be conserved and reducing reliance on fossil-fuelled generation.
Wind is an intermittent resource, and this intermittency needs to be carefully factored into the electricity system’s operations. However, the Central Wind windfarm will also promote a reliable electricity supply through its geographical location. Most of New Zealand’s wind generation at present is in the Manuwatu².  Spreading windfarms across New Zealand reduces the risk of disruptions to the electricity supply if the wind is not blowing at a particular location.

Competitive pricing

Fair and efficient pricing of energy should reflect the relative scarcity or abundance of energy resources, and the costs of production, distribution and use. The availability of historically low cost energy has been a key component of economic growth and development, and for maintaining a high standard of living for New Zealanders. It is government policy that energy prices should, in principle, reflect the full costs of supply, including environmental costs. 
Part of fair and efficient pricing is ensuring that cost-competitive forms of generation are brought into use in a timely fashion. If lowest cost options are not used, using more expensive sources will place upwards pressure on prices.
The government is intending to introduce an emissions trading scheme (ETS), which will put a price on greenhouse gas emissions from thermal electricity generation. Under an ETS, the electricity sector will face the costs of greenhouse gas emissions from 2010. Electricity generated from fossil fuels will cost more to produce. Figure 1 below shows the estimated costs of fossil fuel and renewable electricity generation for new capacity (assuming medium term emissions price of $25/tonne of CO2-e and a $9/GJ gas price). The graph shows that new geothermal, wind and combined-cycle gas turbine (CCGT) are all available at around the same price.  With increasing emissions and gas prices, the economic viability of New Zealand’s considerable wind generation resources becomes even more compelling.  

Figure 1: Typical costs for new electricity generation

View figure at full size including text description

Increases to electricity costs can also be mitigated by having a diverse array of energy sources.  Fossil fuels can be subject to price shocks or supply disruptions, which can sharply increase thermal generation costs. 

Maximising the contribution of cost-effective renewable energy resources

As mentioned above, New Zealand relies heavily on hydro power for our electricity, with approximately 55 percent generated from hydro. A further ten percent comes from other renewable and waste heat sources⁴, and the remainder from fossil fuelled plants⁵. New Zealand’s electricity generation system can be described as a mixed hydro-thermal system, where hydro energy is used as much as possible, depending on lake levels, and thermal power stations run as necessary to make up the rest of the required supply. 
However, New Zealand’s energy composition is about to undergo change. The government has set a target of 90 percent electricity to come from renewable sources by 2025. This will require substantial increases in renewable electricity generation. 
The government believes there is no need for new baseload fossil fuel generation in the short to medium term.  The government has introduced to the House the Climate Change (Emissions Trading and Renewable Preference) Bill that will restrict the construction of new baseload fossil-fuelled electricity generation for the next ten years, except to the extent necessary to ensure the security of New Zealand's electricity supply. This makes it especially important that consents for new renewable generation are approved.
While New Zealand has a wealth of renewable energy resources, economic and consentable sites are limited. Many of the best hydro sites have already been developed, and resource consent issues exist for the remainder.  Geothermal energy is limited to certain parts of New Zealand and is subject to resource sustainability constraints. Bio-energy, using wood or methane collected from landfills, is likely to continue playing a small role. Solar energy is not yet extensively used because of its cost. Harnessing marine energy is a potential future source of energy, assuming robust and cost-effective technologies are developed.
The government considers wind and geothermal energy to be the most likely renewable energy sources to meet growing demand for electricity and to achieve the government’s 90 percent renewable electricity target. 
New Zealand is ideally situated to generate electricity from wind. Located directly across the path of prevailing westerly winds, many regions of New Zealand have a wind resource that is among the best in the world.  Technological advancement, when combined with New Zealand’s wind resource, provides a major opportunity to utilise this renewable resource for electricity generation.

Wind energy plays a small, but increasing role in New Zealand.  In the 2007 calendar year, 2.2 percent of electricity came from windfarms.  This is an increase of 50 percent since 2006.

In 2005, the Ministry of Economic Development and the Energy Efficiency and Conservation Authority commissioned a wind energy integration⁶ study to develop a methodology that can be used to quantify the potential for the integration of wind generated electricity into the New Zealand electricity system and to undertake an initial application of this methodology⁷.  The study found that wind energy could potentially reach 35 percent of total probable capacity and have market share of 20 percent of total electricity generated. The analysis indicates that there is potential for much higher levels of wind integration than currently occurs.

Wind energy, as with other renewable energy sources, is an environmentally responsible alternative to electricity derived from fossil fuelled generation because it does not produce greenhouse gas emissions such as carbon dioxide (CO2).  Through installing and utilising new generating capacity from renewable resources there is the potential to prevent or reduce greenhouse gas emissions from new or existing fossil fuelled plants.  Developments such as the proposed Central Wind windfarm would assist in helping to reduce climate change impacts from energy use.

Resource Management (Energy and Climate Change) Amendment Act 2004

The Resource Management (Energy and Climate Change) Amendment Act 2004 seeks greater alignment between local authorities’ plans and national energy objectives outlined in the NZEECS and climate change policies, and aims to ensure that councils consider the contribution that their regions and districts can make to meeting New Zealand’s commitments under the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol.

Specifically the Act amended section 7 (other matters) of the RMA to require decision-makers to have particular regard to the efficiency of the end use of energy (section 7(ba), the effects of climate change (section 7(i), and the benefits to be derived from the use and development of renewable sources of energy (section 7(j)). The government believes that all of these matters will be met positively by the Central Wind windfarm.

Government’s strategic direction on climate change

The energy system has global and local environmental effects. A key global environmental concern is climate change.  Without more effective international action to reduce greenhouse gas emissions, the likely effects of climate change in New Zealand include rising average temperatures, rising sea levels, more frequent extreme weather events and a change in rainfall patterns.  Globally, the major greenhouse gas generated by human activity is carbon dioxide from energy use.  A number of actions are being undertaken both internationally and nationally to combat climate change, including the emission abatement targets set by the Kyoto Protocol and development of an emission trading scheme.

Over the past decade, climate change has emerged as the major global environmental impact of energy use. Burning fossil fuels for energy produces gases, particularly carbon dioxide, that accumulates in the Earth’s atmosphere and enhance its natural ‘greenhouse effect’. Greater use of renewable energy resources that have low emissions of greenhouse gases is one option for reducing the emissions of greenhouse gases, and ultimately the climate change impacts, of energy use. Windfarms, and most other forms of renewable energy, have very low levels of greenhouse gas emissions associated with them.

The proposed Central Wind windfarm is therefore aligned with the government’s strategic direction for its climate change policies, which includes (amongst other things) the need to act to address the risks for New Zealand, the need to reduce greenhouse gas emissions, and recognition of the crucial role of new energy technologies and technologies that have recently become cost effective.

The potential for additional low-cost renewable electricity supply, and the benefits in terms of limiting greenhouse gas emissions in New Zealand, are significant. Wind energy has been used very little in New Zealand and is just beginning to expand rapidly. Established windfarms represent 3.5 percent of total installed electricity generation capacity so far, and provide 2.2 percent of annual electricity production⁸.

New Zealand remains resolved to meet its Kyoto Protocol commitments. Until recently, it was thought that New Zealand was well situated to meet its Kyoto obligations, but the stronger than expected growth in net emissions, as well as some analytical adjustments in the carbon accounting, means New Zealand faces a greater than anticipated challenge. The imperative to act is stark, and to meet its commitments under the Kyoto Protocol, New Zealand will have to pay the international price for emissions during 2008-2012 that are in excess of 1990 levels.

If the proposed Central Wind windfarm did not go ahead and the electricity instead came from a coal-fuelled generator, approximately 335,373 tonnes of carbon dioxide would be released each year.  If gas-fired generation was the alternative, almost 141,662 tonnes of carbon dioxide would be released.

By contributing to the reduction of greenhouse gases, the proposed Central Wind windfarm would assist New Zealand in meeting its commitments under the UNFCCC and the Kyoto Protocol and contribute to the government’s longer term climate change objectives.

Government Policy Statement on Electricity Governance

The Government Policy Statement on Electricity Governance (GPS) sets out the objectives and outcomes the government wants the Electricity Commission to give effect to, and is made pursuant to section 172ZK of the Electricity Act 1992.  Earlier this year the GPS was reviewed to ensure it was consistent with the NZES.

• The Government’s objectives with respect to renewable electricity are that:
• undue barriers to investment in renewables should be reduced or removed
• the efficient uptake of renewable generation should be promoted
• the national transmission grid should be planned and made available so as to facilitate the potential contribution of renewables to the electricity system
• the specification of the grid planning processes and approval criteria should allow grid upgrade plans to facilitate the efficient and timely development of renewable generation resources, taking into account any difference in lead times for transmission and generation investment.

The GPS also sets out the Government’s expectation that the Electricity Commission will investigate the extent to which hydro and other generation sources can be integrated fully with intermittent wind generation in order to ensure that the maximum economic potential of wind generation can be achieved. 

Conclusion

Given the significance of wind power for meeting national objectives, the Crown supports the proposed Central Wind windfarm.  It is expected that the proposed Central Wind windfarm will provide a significant contribution to New Zealand’s renewable electricity target, help ensure security of electricity supply, and support the government’s strategic direction on climate change. It is anticipated that any potential adverse effects on the environment can be dealt with through the imposition of appropriate conditions while still allowing the Central Wind windfarm to proceed.  The Crown has identified potential adverse effects on the environment, and believes that conditions can be imposed that would ensure those effects are adequately addressed.  The conditions sought are attached as Appendix Two.

Last updated: 29 August 2008