Tiwai smelter to shut down next year, Government accepting closure

This is one of those ‘shock but not a surprise announcements – Rio Tinto has announced that they won’t renew their power contract for the Tiwai Point aluminium smelter and will shut down permanently.

Rio Tinto have claimed power prices have been too high for years, negotiated a deal with the Government in 2015 – see Key says Government won’t add to NZ$30 million of support given to Rio Tinto to keep Tiwai Pt open –  but have still been losing money as world power prices have declined.

The Government has said they will support the workers and businesses affected in Southland, but they won’t try to keep the smelter running.

RNZ: Rio Tinto announces plans to close Tiwai Point smelter

Rio Tinto has announced that it will wind down New Zealand Aluminium Smelters, best known as Tiwai Point smelter.

In a statement to the Australian Stock Exchange, the company said its strategic review had “shown the business is no longer viable given high energy costs and a challenging outlook for the aluminium industry.”

The company has given Meridian Energy notice to terminate its power contract, which ends in August next year. It expects the wind-down of operations will be done by then.

It said it had had discussions with interested parties but could not secure a power contract that would have kept the smelter competitive and profitable.

The smelter’s viability has been questioned for much of the past decade as it grappled with weak metal prices, power costs, and over capacity which has seen smelters closed around the world.

It employs about 1000 people directly and creates a further 1600 indirect jobs in Southland. The smelter is owned by Rio Tinto and Japan’s Sumitomo Chemical Co.

NZ Aluminium Smelters chief executive Stu Hamilton told Morning Report they were on a path to winding down operations.

“We don’t think there’s a deal that can be done that will deliver competitively-priced power to the smelter which is necessary for it to be sustainable.

“We do believe that nothing has been left on the table but if we’re mistaken then the window is still available for a deal to be put on the table but the window for that is closing fast now that we have terminated our electricity contract with Meridian.

It looks like they aren’t mistaken, the Government seems to be not interested in trying to rescue the situation. Their official response shows they intend to deal with the closure rather than try to prevent it: Government will support the people and economy of Southland

The Government will support the Southland economy in the wake of multinational mining company Rio Tinto’s decision to follow through with its long signalled closure of the Tiwai Point aluminium smelter.

“This day has unfortunately been on the cards for some time now, but nevertheless the final decision is a blow to Southland and all those who work at the smelter,” Grant Robertson said.

“The smelter supports hundreds of jobs in Southland and the Government will work with the local community to support economic development in the region to help offset this loss.

“Rio Tinto has indicated it wants to work with the Government to support the community during the wind down of the smelter.

“As we have done in Taranaki, we will support a just transition to more job opportunities. We know the strengths of Southland and we want to build on them in areas such as agriculture, aquaculture and manufacturing. There is also an opportunity to support other energy intensive projects like green hydrogen and data centres.

“There is a degree of inevitability to the decision, as Tiwai has been on the market since 2011, and former Prime Minister Bill English told Rio Tinto in 2013 there would be no further taxpayer money provided.

“Since the smelter opened taxpayers have been subsidising Rio Tinto to keep it open, either directly or indirectly through cheaper power, and Emissions Trading Scheme allocations of over $48 million per year. The company has made the decision not to keep operating without further subsidies.”

Not only does the Government seem happy to see the smelter close, they are looking at what opportunities that may bring:

“Rio Tinto’s decision not to extend their generous power contract with Meridian will flow through to the rest of the market,” Megan Woods said.

“It is disappointing that Rio Tinto is deciding to close one of the world’s lowest carbon aluminium smelters, in favour of keeping open coal plants.”

“Eventually it will free up around 13 percent of total power generated in New Zealand which will relieve some pressure to build new generation. The increased supply will also have a positive impact on prices.

“I also want to make clear that the Government expects Rio Tinto to meet their obligations for clean-up of the site (an estimated $256 million) and do the right thing on the dross,” Megan Woods said.

RNZ: Tiwai smelter closure: A ‘tough day’ for Southland – Grant Robertson

“The message I have for the people of Southland today is the government stands alongside you and with you to start providing new job opportunities in the region.

“This is a very sad day for Southland but there are also opportunities attached to this.”

Not just a tough day, it could be a tough few years if not decade for Southland. It’s hard to see how ‘new opportunities’ will pick up the slack for two and a half thousand jobs, inevitable business losses and the wider family and community impacts.

The union representing workers at the smelter says about 1000 people directly employed by the smelter would be affected, but the decision would also impact on a further estimated 1600 workers in the supply chains.

E tū union said staff were shocked and dismayed and never thought threats to close the plant would ever eventuate.

Negotiator specialist Joe Gallagher said it was not too late to get back around the table, strike a deal, and save jobs.

Sounds like it is too late.

There was a lot of other response.

Contact Says Smelter Closure Is ‘disappointing’

Contact Energy (“Contact”) CEO Mike Fuge said Rio Tinto’s intention to effectively close New Zealand’s Aluminium Smelter (“NZAS”) by giving 14 months’ notice on their electricity contract with Meridian Energy was “very disappointing”.

He said all commercial parties involved in dealing with NZAS, including Contact, had collectively delivered significant cost reductions for electricity. “We’ve all had a strong desire to help secure the financial sustainability of the unique low-carbon smelter at Tiwai, and retain the 1,000 high-paying jobs in Southland, plus the 1,600 contractor and supplier roles.

Contact’s ‘shovel-ready’ Tauhara geothermal power station remained New Zealand’s cheapest and most attractive option for new, renewable, baseload electricity generation, but Mr Fuge said the sensible option was to defer this investment. “Tauhara remains a fantastic project, however it is prudent to press pause for now. We need to factor in the impact of COVID-19 and the potential exit of NZAS and get a clearer picture of demand,” he said.

So that is one ‘shovel-ready’ project that may not happen now.

Rio Tinto Departure Makes Decarbonisation Projects ‘shovel Ready’

Rio Tinto’s smelter, which uses 13 percent of New Zealand’s electricity, is now due to close in August 2021. Greenpeace Executive Director, Dr Russel Norman, says the Tiwai closure will release a huge amount of low-carbon and affordable power back onto the grid.

“The Tiwai closure will mean cheaper power for New Zealand households. It also means there is more clean, renewable energy that can be used to power our cars and industries as we move to a zero carbon economy.

“This will cut climate emissions out of the transport and industrial sectors, while simultaneously helping to reduce New Zealand’s current account deficit by cutting the billions of dollars we spend on importing oil for the transport sector.

“With a ready supply of clean and affordable hydropower now being made available, the Government should create the conditions needed to increase the number of electric cars, buses and trains.”

Norman also says Rio Tinto’s departure blows any case for new coal, gas or oil development completely out of the water.

Rio Tinto Decision Following Strategic Review Of Tiwai Smelter

Mercury notes Rio Tinto’s announcement to wind-down operations at New Zealand Aluminium Smelters Limited (NZAS) with expected closure in August 2021.

Mercury reiterates previously made statements that it is relatively well placed to respond to the decision to close the smelter, with all of its renewable generation assets in the North Island close to load centres and largely free of major transmission constraints as a consequence of reduced South Island electricity demand.

Tiwai Closure Points To End Of Heavy Industry Under Ardern

“The closure of Tiwai Point signals the end of heavy industry under the Ardern Government,” according to ACT Leader David Seymour.

“Labour is squeezing the life out of the economy. For the past three years, it has made it much more difficult and costly for businesses like Tiwai Point to be productive.

“We have a Wellington-centric government of former student politicians that just doesn’t get how the economy works.

I doubt ACT would support a government subsidy of a foreign owned company.

New Zealand First Disappointed Rio Tinto Playing Games With Southlanders

Australian mining company Rio Tinto is playing games with the people of Southland, says New Zealand First List MP, Mark Patterson, following today’s announcement that Tiwai Point is to close.

“It is unconscionable that despite massive support from New Zealand, multi-billion dollar company Rio Tinto is bailing on Southlanders at the height of an economic crisis,” said Mr Patterson.

“New Zealand First has consistently warned that Rio Tinto would walk away, just as they did in Australia, when it no longer suited them. And with a 14 month timeframe, this looks like Rio Tinto is using local workers to play hard-ball with New Zealand power companies.

Patterson seems to be speaking to people who will be adversely affected by the closure while ignoring that NZ First are a part of the Government that is waving goodbye as Rio Tinto walks away.

The End Of Tiwai Pt Could Open Huge Opportunities For NZ

The announced closure of Tiwai Point is welcome news for the clean energy future of New Zealand, and presents huge opportunities in areas such as electrifying transport and developing new, high-tech industries, Coal Action Network Aotearoa said today.

Provided this is not a negotiating tactic, Tiwai’s shutdown should see the closing of the country’s only coal-fired power station at Huntly, which Meridian persuaded Genesis to keep it open as part of the deal it did with Rio Tinto in 2016.

Once the smelter is closed, New Zealand’s emissions will drop by upwards of 1.5 million tonnes a year, emissions the taxpayer has been subsidising NZ Aluminium Smelters for.

“We now have a massive opportunity to look at where and how we will use the renewable energy that will be freed up: we could electrify the South Island’s rail network, and make huge steps toward electric transport,” said CANA’s Rosemary Penwarden.

Union Calls For Just Transition For Workers As Smelter To Close

E tū union is calling for a ‘Just Transition’ for workers in the wake of Rio Tinto’s announcement it will be closing its smelter at Tiwai Point.

“This is a significant employer and this company is at the heart of its community. A closure will affect the entire supply chain, including other local suppliers,” he says.

Joe says the Government needs to consider a similar approach to that used in Taranaki with the Taranaki 2050 Roadmap, to ensure a Just Transition takes place.

I wonder if the E tū union supports the Labour led government letting Tiwai close:  Affiliations – E tū is affiliated to the New Zealand Labour Party.

Infracom To Factor Tiwai Closure In Infrastructure Strategy

Today’s announcement of the potential closure of the Tiwai aluminium smelter by Rio Tinto has very significant implications for the economy and energy market. This will be a key consideration in Infracom’s thinking as it develops New Zealand’s 30 year Infrastructure Strategy.

Tiwai Point Closure – Expert Reaction

Associate Professor Nicola Gaston, Co-director, MacDiarmid Institute for Advanced Materials and Nanotechnology:

“The closure of Tiwai Point is first and foremost a loss for the people of Southland who will be impacted by the loss of thousands of jobs at an awful time. However, it is not a huge surprise, on some level: Rio Tinto has threatened to pull out previously, repeatedly, in negotiating the cost of the electricity supply with Government, and the discussion about what New Zealand should do with the energy is not new.

Jeanette Fitzsimons (former Green Party leader) pointed out late last year that ETS subsidies for the smelter would total a billion dollars by 2030, and that we should consider better uses for the 13 per cent of our electricity supply, all of it renewable.

“Many of my colleagues at the MacDiarmid Institute are deeply passionate about this being the right time to invest in new tech to make the most of our renewable energy advantages in New Zealand – whether this is a form of energy storage, which could include green hydrogen generation, or something even more ambitious, such as using the energy for manufacture of other components needed for a zero carbon economy, such as solar panels – these options exist, but require a government-led business case to be developed.

Dr Anna Berka, Lecturer in Management, Entrepreneurship & Innovation, Massey University:

“Rio Tinto has flagged potential closure for some years. The current crisis has clearly pushed it over the edge. Previous governments went far to make it comfortable here; it was granted some of the lowest electricity prices, reportedly below cost. In return, Rio Tinto has been obstructive to emissions pricing, and by all indications seems to have abused our resource consent process as well. As the largest consumer of electricity in the country, its closure will have ripple effects on the entire energy sector, resulting in temporary surplus capacity – and resulting in downwards pressure on market prices, as well as very likely reducing the viability of new generation capacity currently under development.

Professor Emeritus Ralph Sims, Sustainable Energy and Climate Mitigation, Massey University:

“Few countries have surplus power generation available to meet the present electricity demand as will be the case in New Zealand once the Tiwai Point smelter starts phasing out its high electricity-consuming aluminium potlines over the next year or two.

“We know there will be growing demand over the next decade or two for electricity, especially for electric vehicle charging and industrial and commercial heating by companies, schools etc., looking to displace coal with electricity.

“This will also further reduce the combustion of gas and coal used for power generation and therefore help lower the total carbon dioxide emissions from electricity generation.

“So, in a perfect world, closing Tiwai Point should theoretically result in greater shares of renewable electricity, a reduction in greenhouse gas emissions, and cheaper electricity prices for all New Zealanders.

“However, it’s not that easy.

“So, will New Zealand electricity consumers reap the economic and environmental benefits of having cheaper hydro power suddenly becoming available once the smelter starts winding down?

“I have my doubts.”

Associate Professor Nirmal Nair, Department of Electrical, Computer and Software Engineering, University of Auckland:

“What the likely energy consequences are, which we as a country need to prepare for, is based on how this news is going to play out in the next two to 10 years or so.

“If the demand destruction of electricity load happens in the next two to three years, we will need to spend some dollars to strengthen the transmission assets there to port the electricity to North Island.”

Adjunct Professor Harvey Weake, Faculty of Engineering, University of Auckland:

“I guess the industry has been bracing for this announcement for some time. Given the plant is close to 50 years old, that is a pretty good innings for such a plant and without a major capital injection to maintain its competitiveness, it was just a matter of time. Newer plants are just more energy efficient.

“Short-term economic losses from the loss of Tiwai will be primarily through the loss of local fixed costs from that industry, but given it is foreign held, the impact to New Zealand’s economy will be pretty modest given it wasn’t projected to make significant profits anytime soon.”

Professor Sally Brooker, Department of Chemistry, University of Otago:

“New Zealand should make the most of that electricity for producing green products (e.g., hydrogen, ammonia, silica for PVs, and/or even keep making super green aluminium on a smaller scale as Jeanette Fitzsimmons suggested in an earlier Spinoff article), and use the Regional Development Fund or COVID-19 budget to develop the necessary plant at Tiwai. It is a great site to do so. And it would keep skilled jobs in Southland as, without the smelter, the region will be absolutely hammered by the job losses.

“New Zealand needs to be investing heavily in further developing green energy generation and use, as part of our current government spending/investment. We could be world leaders in going completely to green energy (including transport – electricity, green hydrogen etc), as the world looks to respond to global climate change. We start from such a strong position with our high percentage of green electricity.”

We will see over the next few days or weeks whether the Government was preparing for this and has plans for alternative use of the Manapouri power, and has alternative job and business opportunities for Southland. The Government must have known the closure of Tiwai was likely.

 

 

 

 

 

 

Do both Rio Tinto and the Government want Tiwai smelter closed?

There is no doubt that if the aluminium smelter at Tiwai Point was closed it would have a massive negative impact on Invercargill and Southland. But owners Rio Tinto are considering shutting the smelter down.

And it’s possible the Government would be happy to let this happen. The Greens have never liked big industry, Labour may be able to use the large amount of power used by the smelter to be diverted into electrifying transport, and NZ First’s regional development handouts seem to be stacked northward.

Stuff: Rio Tinto ‘not bluffing’ about threat to shut Tiwai Point smelter

A Rio Tinto “closure team” will arrive at the Tiwai Point Aluminium Smelter near Bluff next week to assess what needs to be done if a decision is made to close the site.

NZAS chief executive Stew Hamilton confirmed members of the Rio Tinto closure team would travel to Tiwai next week and be at the smelter for four days.

The work would be ongoing in the coming months, he said.

The team would be tasked with commencing the detailed work needed to assess what was required to be done, should a decision be made for NZAS to close following the conclusion of Rio Tinto’s strategic review.

The closure review work would cover a range of issues which would need to be considered when preparing for a site closure, including regulatory matters and logistics and scheduling.

Last week, Hamilton said an update of the strategic review would be given in February or March.

Hamilton said the financial position of the smelter was serious, hence the option of closure.

“It’s the first time Rio Tinto has announced a strategic review for the site and that means they are actually going to formally go through the process of assessing all the options including curtailment and closure.”

It was “hard to know” how likely closure was, but it was one of the options, he said.

“We have been losing money for some time and we need to make a fundamental improvement in the financial status of the smelter.”

Options ranged from operating at the status quo, which would require cheaper power, to closure of the plant, he said.

Energy Minister Megan Woods  ruled out taxpayer help to keep the Bluff smelter open.

Thomas Coughlan (Stuff): MPs turn up the heat as Rio Tinto Tiwai Point closure consensus grows

There’s a barely perceptible consensus emerging within Parliament that Rio Tinto’s Tiwai Point aluminium smelter should close.

No-one wants to say it in public – what politician would want to stick their neck out for job losses? – but for their own reasons, politicians from most parties think the smelter’s days are numbered.

The reasons are complex. Some of a free-market persuasion see Tiwai as a business on life support, kept alive as a result of a sweetheart deal from Meridian Energy and propped up by a $30 million cash payment from the government in 2013.

Others say the smelter should close for environmental and social reasons.

It consumes 13 per cent of New Zealand’s entire electricity supply. Almost all of its electricity is sourced from a hydro dam in Lake Manapouri that was built for the purpose of supplying the smelter. This allows Tiwai to claim it produces the greenest aluminium in the world, but it also means that an enormous amount of clean hydro-energy is tied up supplying the smelter. Freeing up the 13 per cent capacity and feeding it into the grid would mean we could probably afford to reduce our reliance on the Huntly coal generator.

This coal-fired power plant is kept online to accommodate for peaking periods and dry seasons, when the hydro lakes that generate the majority of our electricity are stretched.

In fact, the strongest arguments for closing Tiwai aren’t actually about closing Tiwai at all – they’re about significantly reducing our reliance on Huntly.

But Manapouri and Huntly are a long way apart.

Someone, either the government or consumers, would also have to step up to pay the cost of getting the electricity from Manapouri to the rest of the country. It’s already hooked up to the national grid, but Treasury estimated in 2012 that an additional $200m will need to be invested to upgrade the lines.

That doesn’t sound much in the whole scheme of things.

But the cost to Southland would be huge.

Southland would be particularly hard hit. Nearly 1000 jobs would go and investors who bought shares in the power companies partially privatised by the previous government would be burnt badly.

Labour and Greens tried hard to burn the partial privatisation of the power companies, arguably reducing the value to the Government in the sales.

The biggest effect of closing the smelter would be on New Zealand’s emissions. Again according to Treasury, Huntly produces 20 per cent to 50 per cent of the generation sector’s total emissions – these would be slashed by closing the smelter.

Some would see that as a compelling reason to let Tiwai close. But:

Tiwai is itself a large emitter, but here’s the rub: it’s a much cleaner smelter than anyone else has got. Closing it would just mean a much dirtier smelter producing aluminium elsewhere. It’d make our emissions look good, but do little for climate change.

Similar claims were made with the oil and gas exploration ban – it could lead to importing more dirtier fossil fuels.

But New Zealand has to take a hit somewhere. We can’t keep saying our aluminium, like our agriculture, is dirty, but cleaner than everyone else’s.

he unforgiving truth is that extra generation will have to come from somewhere and 1000 jobs and $200m worth of power lines is a rather low cost for the “nuclear-free moment” this Government wants climate change to be.

But shutting Tiwai, oil and gas and downsizing dairy may just move the emissions problems to less clean and less efficient places in other countries.

There is another issue we need to face – if New Zealand wants to make a major change to electric transport, it needs more electricity. Or it needs our largest electricity user to shut down, freeing up a large amount of hydro energy.

And there’s another possible complication. Shutting the Huntly coal station, and moving to greater reliance on hydro electricity for transport, leaves us vulnerable to the weather.

Perhaps we can hope that climate change will make our rainfall more reliable, to keep the lakes and dams that power the country full.

Climate change linked by Greens to inequality, power, corporations

It’s common to see Greens link climate change and environmental issues with a major reform of the world’s financial and business systems.

They don’t seem to recognise the good that large companies, big money and corporations have done for the world. They have also inflicted significant problems. But is a war on big business the best way to combat climate change?

One of the ways of dealing with climate issues is to develop alternatives. Socialist style governments are unlikely to lead the way or succeed there.

The motives of the Greens are admirable, but the means with which they want to achieve major change is, at best, a huge experiment that is certain to be difficult to achieve smoothly if at all.

 

“Whiteness”, decolonisation and dumping capitalism

Max Harris writes about Racism and White Defensiveness in Aotearoa: A Pākehā Perspective

More accurately that should be ‘one Pākehā’s perspective’.

I want to talk about an aspect of whiteness in Aotearoa New Zealand. And when I say “whiteness”, I’m not just talking about skin colour. I’m talking about the power, privilege, and patterns of thinking associated with white people.

I think that there are a wide variety of ‘patterns of thinking associated with white people’ – whatever ‘white people’ means.

Whiteness is connected to economic power and class — and is probably least understood by those it privileges. Most white people seem blind to its existence, while most non-white people are not.

Sweeping generalisations. Harris speaks for himself, fair enough, but not for ‘white people’. He doesn’t back up his ‘most white people’ and ‘most non-white people’ claims.

I think for those of us who identify as Pākehā, or grew up in Pākehā-dominant spaces, there’s a special responsibility to strive to be aware of our own advantages in Aotearoa New Zealand.

While I have no problems with the term Pākehā I don’t identify as Pākehā. I identify as a New Zealander. I don’t think I have any special responsibilities based on someone else’s pigeon holing of me.

White advantage is maintained in many ways: through intergenerational wealth, discretionary decision-making, and everyday racism.

Some people may take advantage of racial privileges – and not just ‘white people’.

One aspect of how racism is talked about in Aotearoa is white defensiveness in response to discussions of racism. By white defensiveness, I mean an anxiety, closing-down, and insecurity among white people and white-dominated institutions when racism is raised.

Perhaps some people feel some of those things. I don’t.

I see at least four types of white defensiveness.

First, there’s Denial: kneejerk responses that attempt to deny that there is racism, rather than taking claims seriously or considering its roots.

The second type of white defensiveness is Diversion. This is where, in instances in which facts about racism or colonisation are raised, the conversation is derailed through a claim that Māori themselves are guilty of some other wrong.

A third form of defensiveness is Detriment-centring. That’s where there’s a focus on the disadvantages faced by Māori, but without any acknowledgment of the advantages or protective factors which flow from being Pākehā.

The fourth form of defensiveness is the demand to Move on. This is where defensive demands are made for discussions about racism to end.

Let’s move on this discussion.

This discussion isn’t meant to demonise white people, or Pākehā, either. It’s about being honest and open about our advantages — and thinking about how to dismantle the system that produces them.

Dismantle the system?

Pākehā people can, and should, remain proud of our heritage and roots. But we also need to be aware of the injustices of the past and present, and how we may have contributed to them.

One very valid question is how all this relates to class and New Zealand’s system of capitalism.

Dismantle the system of capitalism?

We need to talk more about class in this country — to speak back to another lamentable and longstanding myth that we are somehow class-free. Fortunately, a new generation of activists in New Zealand is breathing fresh life into that conversation.

I think that class in a new Zealand perspective is a largely different different thing – I wouldn’t call it an issue.

There’s a need to support Māori-led efforts at decolonisation: the process of understanding and undoing the negative effects of colonisation, and recentring indigenous views.

Decolonisation? Harris doesn’t explain what that might entail.

We all must also push for a different economic order, given the way that the twin forces of capitalism and colonisation have amplified the power of whiteness.

He associates capitalism with whiteness – it is not just white people around the world who have benefited substantially from capitalism, and who continue to benefit from it, despite it’s shortcomings.

Harris seems to be suggesting dismantling ‘colonisation’ and capitalism.

Dismantling systems of oppression, including those based on race and class, is important for the powerful as well as the powerless.

While this is an interesting discussion there is a major omission.

Dismantling colonisation, capitalism and systems of oppression are a big deal.

But Harris makes no attempt to explain how this dismantling would happen, who would decide what is dismantled and how, nor what would take their place.

Many things in our world and our country are imperfect, but dismantling your house, or dismantling your country, must be retrograde steps unless you have somewhere else you can live.

It’s all very well to pile on ‘white people’ guilt, and to condemn colonisation and capitalism, but without any attempt at viable alternatives it seems to be a half cocked argument.

Like our form of democracy both colonisation and capitalism have some crap aspects, but they remain worse than everything but all the alternatives – unless perhaps Harris can suggest something better.

How will we get to net zero emissions by 2050?

A goal of Net Zero Emissions Economy by 2050 is the number one policy for Green co-leader James Shaw, but Shaw either isn’t sure how to achieve it, or seems unwilling to openly say what he wants – a drastic cut in cow and sheep numbers.

Net Zero Emissions was number one on the Labour-Green C&A agreement.

Sustainable Economy

  1. Adopt and make progress towards the goal of a Net Zero Emissions Economy by 2050,
    with a particular focus on policy development and initiatives in transport and urban form,
    energy and primary industries in accordance with milestones to be set by an independent
    Climate Commission and with a focus on establishing Just Transitions for exposed regions
    and industries.

a. Introduce a Zero Carbon Act and establish an independent Climate Commission
b. All new legislation will have a climate impact assessment analysis.
c.  A comprehensive set of environmental, social and economic sustainability indicators will be developed.
d. A new cross-agency climate change board of public sector CEOs will be established.

It seemed like an idealistic pledge without much of a plan.

But it is still far from certain about how this might be achieved. Shaw is looking for ideas, and points at some, but even they say “how we plug the gap between 95% and 100% in New Zealand isn’t obvious yet.”

Briony Bennett claims “Changing land-use from dairy, sheep and cattle farming to new forests or low-emissions crops and horticulture (growing fruit, vegetables and flowers) is key to achieving carbon neutrality in New Zealand by 2050.”

That seems to be something that Shaw and the Greens are not prepared to come out and push openly.

Bennett has a Masters in Energy Economics and Policy from Sciences Po, Paris. She moved back to New Zealand in late 2017.

Before Christmas, the new climate change minister and Greens’ party leader announced the Government’s intention to pass a Zero Carbon Act, whereby the New Zealand economy would achieve carbon neutrality by 2050. Industry, think-tanks and public sector officials have produced huge volumes of data, modelling, analyses and arguments since then. Within the last few weeks, the Interim Climate Change Commission was announced and the Productivity Commission published a 500-page draft report on the transition to a low-emissions economy. We all want to know what do we need to do to reach net zero.

It seems that Green co-leader James Shaw made the pledge first, and is now looking for ideas on how to achieve it.

This points to Bennett as a Guest Writer at The Spinoff:  NZ has pledged zero carbon by 2050. How on earth can we get there? (abbreviated):


100% renewables

Around 85% of New Zealand’s annual electricity supply is generated from renewable sources. Gas or coal-fired generation is used to meet winter demand peaks and back up supply in low rainfall years. Hydroelectricity constitutes more than half of the national power mix. In a high hydrology scenario, with good seasonal rainfall and snow melt, hydro-power can meet up to 65% of our annual power needs, but dry years present a great challenge and a barrier to reaching 100% renewables.

Under current resource management laws, it is highly unlikely that a new large-scale hydro-power scheme would get built in New Zealand. We could feasibly expand lake storage in current schemes, but not double it, which is what would be required. Further, this would do little to address the main barrier to reaching a 100% renewable power supply, which is our dry-year risk.

Wind power

At an emissions price of $75 or greater it will be economic to build enough wind farms to reach about 95% renewables in New Zealand, according to Concept Consulting.

Today, a significant number of wind projects have actually been consented, over 2.5GW according to the NZ Wind Energy Association, but project developers are waiting for prices to rise before starting construction. However, wind power cannot ensure our power supply is 100% renewable in a dry year since it is not guaranteed to be available during winter peaks when demand is at its highest.

Grid-scale or rooftop solar exacerbates the seasonal storage challenge as it only generates during periods of low demand and has a much higher output during the summer. We need power sources that are as flexible as coal and gas-fired power plants to meet seasonal demand.

Big batteries

Grid-scale battery storage projects have been making headlines around the world. Tesla installed a massive battery in South Australia after Elon Musk made a promise to do it in 100 days or for free on Twitter. Bloomberg New Energy Finance’s (BNEF) lithium-ion battery price index shows a fall from US$1,000 per kWh in 2010 to US$209 per kWh in 2017.

Nevertheless, this technology cannot economically provide seasonal or dry-year power storage of the scale required at present. They just do not pack as much punch as hydro storage.

…this suggests we need 400 million batteries, or over 250 Tesla Powerwalls per household. Even at a discounted price of just US$2000 this would require an investment of over US$500,000 per household or US$800 trillion in total. More than four times our current GDP. We could spend that money more wisely to reduce our greenhouse gas emissions.

Car culture

Power sector emissions have declined 13% since 1990 and make up less than 10% of total emissions. In the same period, transport emissions rose 70% and constitute 20% to New Zealand’s emissions. Car ownership reached its highest level ever last year, at 774 light vehicles for every 1,000 New Zealanders.

This is the beast we must tackle. Electrification is the key pathway with existing technology to cut the majority of transport emissions. To charge electric passenger vehicles and e-buses, electrify trains, and reduce fossil fuel usage for heating, a reliable and affordable electricity supply is crucial.

Power outlook

With more wind, batteries and additional geothermal power plants, it is technically feasible to reach the 100% renewables target when we have average or high rainfall. This would be achieved at great expense and put significant upwards pressure on power prices. Other flexible technologies, such as demand response or renewable power-to-gas, hold great potential to help New Zealand reach 100% renewables. Biomass or tidal power generation could emerge as affordable means to generate electricity in New Zealand in the next few decades.

Solar and wind offer a comparatively low-cost pathway to reduce emissions in most countries that currently have a high share of coal and gas-fired generation, but how we plug the gap between 95% and 100% in New Zealand isn’t obvious yet.

Planting trees

All pathways to net zero, require forestry to play a major role. Afforestation is like a credit card, buying us time to develop alternative technologies to replace current agricultural and industrial processes. A methane vaccine for animals or other biological inhibitors that can be mixed with their feed are being researched, but these technologies remain unproven. Selective breeding, though it can take decades, will also continue reduce the amount of methane produced per animal.

Farming

The New Zealand Emissions Trading Scheme (ETS) is our main tool for encouraging decarbonisation. The scheme requires emitters to pay for each tonne of carbon dioxide or other greenhouse gas produced – this is called an emissions unit. Farmers are currently exempt from participating in the ETS, which covers energy, waste and industry. To achieve net zero this will have to change since agriculture contributes over half of our emissions. To ensure a gradual transition for farmers, they should receive free emissions units upfront and have trading at the full emissions price phased in over time.

Changing land-use from dairy, sheep and cattle farming to new forests or low-emissions crops and horticulture (growing fruit, vegetables and flowers) is key to achieving carbon neutrality in New Zealand by 2050.

This implies that fewer sheep and cattle will be farmed in the future. Reducing, though perhaps not eliminating, dairy and meat exports raises important questions about food production. The carbon footprint associated with a diet rich in animal protein is an issue that is likely to loom larger in public debate.

There are few affordable means to cut emissions from pastoral and dairy farming without reducing herd populations at present.

If all sectors are covered by the Emissions Trading Scheme, businesses that reduce their emissions will be rewarded and pay for fewer emissions units. It is the main tool we have to encourage the changes and innovation required in all sectors to dramatically cut our emissions and reach net zero by 2050 in New Zealand.


So Bennett largely explains that it will be difficult to attain 100% renewable power – and she promotes electric vehicles as a way of reducing fossil fuel emissions, but this would require substantially more electricity.

She is basically saying planting a lot of trees is one way of getting to zero net emissions, but that’s only a short term solution,

Her primary suggestion is effectively applying the Emissions Trading Scheme to farming to drastically force cow and sheep numbers down.

Is this what Shaw and the Greens want? If so they should come out and say it.

Shane Jones wants to shit kick through bureaucratic brick walls

Shane Jones is promoting more power for politicians over public servants, and has claimed it takes too long to have funding allocated to projects. This is a bit scary given the amount of money he has to hand out to the regions, but it is on his personal wish list and he didn’t speak on behalf of the Government.

Stuff: NZ First’s Shane Jones wants ministers to have more power over public sector

Cabinet Minister Shane Jones, says he would like to “soften that line” between governance and the bureaucracy, including allowing ministers to appoint top officials.

In an interview on the provincial growth fund Jones, the Regional Development Minister railed against a bureaucratic system he characterised as a “treacle-riddled”, slowing down process around funding economic projects, without evidence of improved efficiency.

This is scary given Jones’ short record to date in proposing funds for shaky projects and then claiming he forgot about getting advice pointing out serious shortcomings.  See Shane Jones ‘genuinely forgot’, Sage ‘memory let her down’.

“I’m looking forward to fighting an election to change the way that politicians relate to the bureaucracy,” Jones said.

“I know we have this separation of governance and the bureaucracy, but I’m really attracted to the idea where the Aussies have softened that line, and key ministers bring in their s…-kickers to get things done. That’s always been my preference.”

I’m sure a number of ministers would like to shit kick their policies through bureaucratic brick walls, but there are good reasons to have some checks on impatient and extravagant politicians.

Jones said his comments were not Government policy and were “not consistent with the State Services Act” but were ones he would like to campaign on in the future.

Campaigning on bureaucrat bashing may win some votes from the plebs, but it should meet resistance from Parliamentary voters.

Among other things the State Sector Act gives the State Services Commissioner the power over chief executive appointments, without influence from the Beehive, at least in theory.

Unlike many other countries, public servants are required to act in a politically neutral way.

The Public Services Association warned in December that the influence of ministerial advisors, Beehive staff which are appointed to serve the interests of their minister, are undermining this neutrality.

This aim at public service neutrality may be flawed but it is very important in New Zealand. Giving more power to ministers, unfettered by public servants, would be a big risk as we don’t have checks and balances that other countries have – no Lords and no Senate to oversee Parliament.

A much more powerful Jones in charge is something we should be very wary of.

Jones followed up the interview on Facebook:

“Surely I’m not the only one who would like to see less bureaucracy in this country? Meeting high governance and probity standards should not come at the expense of efficiency and pace in my books”.

He wants to have the power to push through what he wants at the expense of probity standards?

That should be a worry with any Minister. Especially so of Jones given his record to date.

Allowing Ministers to shit kick through the bureaucracy would be a very risky removal of one of the few means of checks and balances we have.

Some tough love for the Green party

Ex political journalist John Armstrong has some views on Metiria Turei and her political crash and burn,  which is unlikely to go down well in the Green camp. Tough truths.

Metiria Turei could have said a lot during the seven or so months which have passed since her hugely dramatic and equally traumatic exit from politics.

Her ghost stalks the Greens, however. In particular, it is stalking the upcoming election of a new female co-leader to fill the vacancy created by her spectacular demise.

In some quarters of the party, Turei the Welfare Fraudster is both martyr and saint; a veritable Joan of Arc and Mother Theresa all rolled into one.

It was much easier to blame the media for her fate, however, than admit to the real reason why she had to quit.

Her consistent refusal to divulge any detail about the circumstances surrounding her fraud was tarnishing the party’s image.

The party’s stance was untenable. It was blaming the media for doing their job. It was saying it was okay for James Shaw to join the Opposition hunt for the scalps of Bill English and Todd Barclay, National’s errant former Clutha-Southland MP.

The application of similar scrutiny to Turei’s behaviour was somehow deemed out of bounds.

That’s fairly typical of Green supporters, in my experience. They are very critical of people and ideas they disagree with, but get almost apoplectic when their party or MPs are put under scrutiny.

Turei’s downfall was the first time in a very long time that the Greens had felt the heat of the media blowtorch on its highest setting.

Now that they are party to government, such bouts of relentless questioning and grilling by the media will be the norm. The Greens can expect it to occur on anything and everything no matter how big or small or how important or trivial.

They really wanted to finally be a part of a Government. Now they are in power they have to expect they will be put under more scrutiny – they were generally given a very easy time when in opposition, so the scrutiny of power is coming as a bit of a shock to some.

The question is whether the Greens have the necessary political management mechanisms in place to ensure the party is not an accident constantly waiting to happen.

The omens are not good. The party’s handling of the New Zealand First-instigated legislation which will block MPs from party-hopping has been as shambolic as it has been shabby.

Perhaps they (the Green Party and their MPs) will learn how to deal with being in awkward political situations that inevitably occur when in Government, and the scrutiny that goes with the territory, but those learnings are likely to be lagging or lacking in the rank and file.

One senior party figure should be exempted from such accusations of complacency, however.

He suggests that Julie Anne Genter is unusually realistic for a Green and would make a good replacement for Turei as co-leader. More on that in Green leadership – sickly sweet political correctness versus political realism.

Power by percentages

Now the final numbers are in for the 2017 election they can be scrutinised – number crunching is a lot more fun than watching the media go into another frenzy of speculation while they wait for parties to sort out our next government.

Power is supposed to be approximately proportional, but any government will have received just over half the votes, which is substantially less than half the eligible voting population.

  • Estimated eligible voting population: 3,569,830
  • Total enrolled: 3,298,009
  • Total valid votes: 2,591,896

Voting percentages:

  • Percentage enrolled: 92.39%
  • Percentage of enrolled voters who cast valid votes: 78.59%
  • Percentage of eligible voters who cast valid votes: 72.61%

Percentages of power if National and NZ First form a government:

Votes % of vote % of Govt votes MPs
National 1,152,075 44.4% 86% 56
NZ First 186,706 7.2% 14% 9
Total 1,338,781  65

National has about 6 times the number of votes and MPs as NZ First, so theoretically should have about 6 times the power and 6 times the number of ministers (20-21 for National, 3-4 for NZ First).

Votes % of vote % of Govt votes MPs
Labour 956,184 36.9% 73.3% 46
NZ First 186,706 7.2% 14.3% 9
Greens 162,443 6.3% 12.4% 8
Total 1,305,333  63

Labour has about three quarters of the vote, with NZ first having just over an eighth and Greens just under an eighth.

This equates to about 17-18 Labour ministers, 3-4 for NZ First and 3 for Greens.

If Labour and NZ First form a government with Greens supporting them from outside government:

Votes % of vote % of Govt votes MPs
Labour 956,184 36.9% 83.7% 46
NZ First 186,706 7.2% 16.3% 9
Total 1,142,890 55

Labour has about 5 times the votes of NZ First so NZ First would be theoretically a bit stronger in this arrangement in forming a government, but with Labour would have to get green approval for any legislation.

But of course the reality is things come down to negotiating ability and strength.

 

Greens launch electricity policy

The Greens launched their electricity policy today. Most of it is wordy and not easy to get a quick understanding of it.

The Empowering New Zealand comprehensive plan for the electricity sector includes:

  • $112 million for winter warm-up payments to help low-income households cover their power bills
  • setting a goal for 100 percent renewable electricity by 2030 (in average hydrological conditions)
  • an investigation into the electricity wholesale market
  • encouraging lines companies to work together and embrace new technology to bring down costs
  • modernising industry rules to encourage competition, transparency and use of data.

“Our plan will see more than half a million Kiwi households pay less to heat their homes every winter,” Green Party energy and resources spokesperson Gareth Hughes said.

“Setting a goal for 100 percent renewable electricity generation is bold, achievable, and the right thing to do for our planet.

“New Zealand can help lead the global clean energy revolution, creating jobs and exporting our clean energy expertise to the world, but we need Government leadership to make it happen.

“We have consulted the electricity industry to design a future-focused system and I’m confident the plan we announced today is ready to be acted on by the next government,” Mr Hughes said.

Of course it is subject to the Greens becoming a part of the next Government and getting Labour and perhaps the Maori Party or NZ First to agree to this policy.

A key feature is a handout to families with a joint income of less than $50,000 p.a. of varying amounts depending on where they live. You have to dig in to their documentation to find the nitty gritty:

GreenPowerHandout

These seems to be an odd way to help out poorer families, with a substantial administration overhead.

Why is the West Coast payment so low? Is power that cheap on the Coast? Or do they use a lot of coal and not so much electricity?

It’s not clear exactly how it would work but it appears to be a cash handout able to be used for anything, it just happens to be calculated on average power price increases for the winter. Which makes the power aspect more marketing than anything, and more complicated than it needs to be.

I don’t think this will be a ‘priority policy’ in Green campaigning. There’s a lot of other details that will sound fine to some but most won’t care if the understand.

Read it all if you like:

Moving on from Trump’s speech

There have been many interpretations of one of the most picked over speeches in history, President Trump’s inauguration speech.

Some see it as a unifying speech for all American people (that is, the United States of American people, not the other North Americans, the Central Americans or the South Americans).

Others think that it targets white Americans and alienates others.

While the speech will have been very carefully crafted and checked before going to air it is impossible to prevent negative interpretations. While many people only see good in President Trump, many others only see evil.

Trump has spoken publicly a lot over the past two years, through the Republican primaries, through the presidential campaign, and since then leading up to his inauguration.

He has talked and talked and talked the talk.

Now it’s time for him to walk the walk. Trump is president, that’s a done deal. Now the real dealing begins. He acknowledged this in his speech:

The time for empty talk is over. Now arrives the hour of action.

We won’t know how he will be as President until we see what he actually does. It may take years to get a good idea whether his radical ideas and unconventional approach works or faisl.

There will be some some successes and some failures. The US and the world waits, with some hoping the pluses outweigh the minuses, and others in dread.

If Trump is true to his word his biggest battle won’t be with immigrants or ISIS or China or Russia, it will be Washington.

How Washington reacts will have a major influence on Trump’s presidency. Washington is probably the biggest bureaucracy in the world.

Saying ‘drain the swamp’ is easy, and it was a successful campaign slogan.

Draining the excesses and inefficiencies, while maintaining and rebuilding a functioning capital, will be a massive task.

Trump has promised to give power to the people.

What truly matters is not which party controls our government, but whether our government is controlled by the people. January 20th 2017, will be remembered as the day the people became the rulers of this nation again.

The people have never been the rulers of the nation, they just get to vote occasionally.

The people, or at least some of the people, voted for Trump’s biggest promise – to give them power, for Washington to listen to them and work for them.

This is Trump’s biggest challenge.