New gas-fired power plant a $100 million mistake

National MP Jonathan Young recently celebrated the prospect of Todd Energy spending $100 million to build a new gas-fired peaking plant in Taranaki.

He also appeared to show the same enthusiasm for nuclear power during a recent Question Time in Parliament, where he asked the energy minister to consider building a plant right here in nuclear-free New Zealand.

Young is wrong – on both counts – but let’s focus our attention on why a new gas-fired power plant will be a $100 million mistake for New Zealand.

A quick glance at what’s happening in Australia or the US should raise warning bells for anyone with a stake in this project.

The state of California has cancelled well-established plans to build new gas peakers because a powerful combination of solar panels, battery storage, and demand management can already do the job at lower cost. Instead they’ve decided to put solar panels an all new-build homes.

South Australia’s famous Tesla battery was installed in less than 100 days. It’s already created significant cost-savings for energy users by outcompeting expensive gas generation.

The global renewables boom is great news for a region like Taranaki, where the workforce has unique skills in the energy sector. Taranaki could become a hub for clean energy jobs. We could be building offshore wind farms along the coast and solar panels across people’s rooftops.

Countries investing in clean energy are now finding more opportunities here than in oil, gas, and mining. The two fastest growing occupations in America are solar installers and wind turbine technicians, and the International Renewable Energy Agency says solar already creates twice as many jobs as coal or gas, per unit of electricity.

All of these market signals show that investors should be very wary of Todd’s plans for that $100 million.

It’s a project that will only create six new jobs, and could, by the looks of things, become obsolete almost as soon as it’s built.

Putting economics aside for a moment, let’s also consider the fragile climate that sustains life on this Earth. In order to protect ourselves from the storms, floods and droughts that come hand-inhand with climate change, our country has set an ambition to reduce our climate pollution to zero. We’ve decided to stop looking for more carbon-intensive fuels. Instead, we’ve committed to generating 100 per cent of our electricity from clean renewable sources by 2035.

It begs the hundred million dollar question: why on earth would anyone spend so much money building an asset that will be stranded in 15 years’ time?

Supporters of the Todd Energy project must be banking on New Zealanders not being serious about creating a safe future for our children.

No-one would disagree that all Kiwi kids deserve to grow up in a warm and healthy home. But the spiralling cost of electricity now means that three in 10 families can’t afford to give their kids this basic right. Our current energy system relies on expensive gas and coal-fired plants to run during cold winter nights. This pushes up prices for households exactly when they need it most, making a killing for energy companies.

Building more expensive peaking plants may boost power company profits, but it’s not the answer to keeping families warm in winter.

We must support families to insulate the 600,000 homes in New Zealand that have nothing between the floorboards to keep the heat in when the temperatures plummet.

It’s about helping people and communities to generate their own clean power from the sun, and store it in batteries so they can use it when they need it most. All of these things reduce peak electricity demand, at the same time as keeping energy bills affordable.

Of course, helping families warm up their homes and lower their costs doesn’t boost power company bottom lines. That’s why energy utilities are still talking about building expensive gas peaking plants. These plants push up electricity prices, and are paid for through household bills.

New Zealand is a country that prides itself on agility, innovation, and rolling up our sleeves and doing it ourselves.

We should not accept a future built on more of the same outdated, expensive technology.

It’s time to embrace the transformational opportunities of a society powered by new, clean technology, and how we can use it to enhance our lives.

The global renewables boom is great news for a region like Taranaki, where the workforce has unique skills in the energy sector.