A lot to learn about a serious renewable energy strategy

Whatever may happen with the climate a shift to as much renewable energy as possible makes sense (but don’t forget energy conservation as a key part of a more energy sustainable future).

Anna Berka, a research fellow in the University of Auckland’s Energy Centre, suggests that New Zealand has a lot to learn about successfully moving in this direction. She writes What NZ should learn about renewable energy:

Political and social science research on climate change shows some countries have been far more successful than others in orchestrating state-led transition to renewable energy over the past 40 years.

Without exception, it is countries that have fully embraced climate change objectives into industrial policy that have succeeded. They have seen clean technology as the ticket to new domestic technology and service markets, employment, and new export markets, as well as a means of addressing specific domestic issues such as regional development and resilience of electricity supply.

Conversely, very little tends to happen where climate change policy is not crafted around social and economic benefits directly relevant to domestic stakeholder groups. The reason? Tax payers, established industries and the media are consumed by the short term costs of climate change policy, blind to generally more diffuse and long term benefits.

And those who do promote long term benefits are often vague and sound more idealistic evangelistic rather than realistic. The New Zealand public has not been convinced that any urgency is required.

And what has already been announced by the new Government has been poorly thought through.

Announcing a moratorium on oil and gas exploration as the first agenda item in the Government’s climate change policy – without linking it to a broader programme that convinces New Zealanders they can and will benefit from the Government’s climate change objectives – could alienate both industry and the public and set a dangerous precedent.

Delivering winning climate change policies is a careful balancing act that requires a willing-to-learn government with ears on the ground. The Government must serve as a knowledge broker and matchmaker, using grants and public loans to bring existing expertise out of the woodwork, putting in place incentives to invest, regulations and public procurement programmes to guarantee demand that can scale up pilot projects.

This involves working with all stakeholders and independent research institutes to design policy instruments and set technology standards. So while market players ultimately do the heavy lifting, the role of central and local governments is essential. They need to nudge, prod and finance for a period of years, to steer the rate and quality of technological innovation in a desirable direction before market dynamics can take over and drive down costs.

It needs to combine the efforts of a smart Government and smart financial decisions with smart businesses.

A cogent argument is hindered by the zeal of some of those promoting a transition away from fossil fuels, in particular their insistence that ‘capitalism’ be scrapped in order to achieve a sustainable energy future. Linking an energy revolution with rapid  political and social revolution makes it much harder if not impossible to win public trust and support.

Our Government is deciding on the main elements of New Zealand’s climate change strategy. Once the key objectives are confirmed, policy design must be decided at political level, leaving implementing bodies to carry out specific mandates.

Countless examples show climate change policy tends to become ineffective where implementing bodies are left on their own devices to make complex trade-offs between different objectives and different stakeholder interests.

The Government seems poorly prepared for making major changes. This was highlighted with differences in expectations about the future of coal between the Minister for Climate Change and the Minister of Energy and Resources – see Ministers differ on banning coal.

The next challenge for the Government will be to bring ministries, key industry stakeholders and regulators on board and in alignment. This process won’t be helped by the fact that climate and energy policy is not integrated under one ministry.

For example, making the electricity market accessible to small-scale citizen-owned storage or generation assets is likely to require regulated power purchase guarantees, priority dispatch and buy-back rates as well as new channels to bridge the wholesale market with distributed electricity and ancillary services.

This will require full co-operation of MBIE, the market operator NZX, Transpower, distribution line companies and the Electricity Authority, who will need to adapt industry codes.

Win-wins are possible: That is, if our Government is ready to believe in the mission, rally the troops, and empower its people.

Making grand statements about new generation ambitions, bragging in Europe with incorrect claims, and imposing change without consultation as happened with the oil and gas permit announcement (followed by some rapid damage control) looks ad hoc and amateurish, and Ministers seem at odds.

The Government looks nowhere near ready to explain and implement a comprehensive and co-ordinated ‘mission’ on a transition to renewable energy.

And there is a substantial elephant in the energy revolution room – there is no obvious future without any reliance fossil fueled cars, trucks, trains, planes and ships.

Those who say we must change must first explain a lot more details about what we must change to, and how.

We don’t currently have the technology to time travel everyone to a miraculously fossil fuel free 2050, so we need to see a realistic way of getting there.