2021 Emissions Reduction Plan discussion document

Via email: climateconsultation2021@mfe.govt.nz 24 November 2021 Transitioning to a low-emissions and climate-resilient future: Emissions Reduction Plan discussion document Mercury welcomes the opportunity to provide feedback on the initial proposals and further measures that could form the basis of the government's final emissions reduction plan in May 2022. Mercury supports a transition to a low carbon economy which delivers emissions reduction, access to reliable and affordable energy and a fair, equitable and inclusive future for all New Zealanders. We are pleased the document seeks feedback into the analysis and proposals put forward by the Climate Change Commission (CCC) in relation to the energy sector which we supported.

New Zealand’s electricity sector stands ready to support decarbonisation Mercury welcomes the recognition that New Zealand’s already highly renewable electricity system will play a vital role in delivering emissions reductions across the economy. New Zealand is consistently ranked within the top ten countries in the world for balancing the energy trilemma of environmental sustainability, energy equity and energy security.1 The CCC identified the great opportunity that New Zealand’s low emissions electricity sector can provide, supporting the decarbonisation of higher emission sectors such as process heat and transport through substitution.

The electricity sector is responding positively to the challenge of supporting New Zealand emissions reductions targets by 2050. Around $2bn in new renewable generation investment is underway which takes emissions from electricity in New Zealand to a level consistent with:  the required contribution from the electricity sector to achieve the CCC’s demonstration path; and  the 2030 emissions intensity the Science Based Targets Initiative identifies for the energy sector to limit global warming to a 1.5-degree future.

This investment sees New Zealand’s renewable electricity generation increase by around 10% which Mercury estimates will be around 92% by the end of the first emissions reduction plan budget period.

Mercury is supporting decarbonisation through its own investments such as New Zealand’s largest wind farm at Turitea near Palmerston North. Mercury’s recent acquisition of New Zealand wind development options of Tilt Renewables also represents a pipeline of high-quality investments that can be flexibly brought to market as demand increases driven by the policy measures considered in the consultation paper.

Innovation is occurring led by market signals Historically investment in new generation has been supported through existing sector balance sheets rather than project financing, which has resulted in limited demand for arrangements such as Power Purchase Agreements (PPA). However, the market for PPAs in New Zealand are developing driven by an increasing focus from the business sector in demonstrating tangible emissions reduction activity and support for renewable electricity. Longterm PPA’s for new renewable projects is an innovation that is emerging as key mechanism to provide certainty to

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market participants as well as supporting decarbonisation of the electricity sector. Genesis for example have signed a number of PPAs, including with Mercury, as part of their Future-Gen programme to displace emissions from their existing thermal generation fleet 2.

Stable and integrated policy required to support future emissions reduction Achieving New Zealand emissions reductions targets will require investment a new renewable generation at a substantially faster pace than has been delivered in the past. A new wind farm the size of Mercury’s Turitea development will be required every nine months until 2050.

Ensuring energy policy supports the transition to a low carbon economy will be essential to delivering future investment. Mercury is encouraged by the consultation’s recognition of the importance of balancing the energy trilemma as well seeking views on the implementation of an integrated National Energy Strategy (NES) and renewable energy target. Mercury has long advocated for establishing a renewable energy target as a better driver for decarbonisation than the current target of 100% renewable electricity and supports this outcome as a priority action.

National Energy Strategy should prioritise sector engagement Mercury supports a NES which is required due to the need to co-ordinate the complex interactions across multiple sectors and decision makers. It will help deliver effective alignment and a multi-partisan approach to key policy mechanisms such as resource planning, local government decision making for renewables investment, and support for long-term market signals through multiple political cycles.

Currently there are many valuable processes initiated by both government and regulators considering specific elements of the energy transition. Examples include the New Zealand Battery Project being led by MBIE on options to address dry year risk and the work of the Electricity Authority’s Market Development Advisory Group on how the electricity market may need to evolve to support 100% renewable electricity. Industry is also responding with policy proposals including options to decarbonise the electricity system and the potential for new technologies such as hydrogen storage.

Mercury welcomes and supports these important contributions and considers the main opportunity from a NES is to bring together the wealth of knowledge being generated to evaluate the most optimal pathway for the decarbonisation of the energy system within the New Zealand economy. The risk posed by current fragmentation of processes and decision-making is that single point solutions may be adopted which do not consider the interconnected nature of the entire energy system and inadvertently undermine New Zealand maintaining its balanced trilemma performance into the future.

The value of a NES will be to provide an options based approach for the range of least cost and feasible solutions to address the main challenge of securely transitioning the New Zealand economy to higher proportions of renewable energy which will deliver the required emissions reduction to meet our targets.

This objective could be best supported by establishing a forum that brings together policy makers, regulators and industry experts to more purposefully consider the energy transition challenges and opportunities under the NES process. An Energy Sector Taskforce comprising senior representatives from electricity generation, electricity networks, gas infrastructure as well as the transport and process heat sectors to provide advice would be a valuable step. The open letter provided by leading companies in the energy sector in May 2021 indicated public support for working constructively and collaboratively with government and regulators on frameworks to support rapid decarbonisation and the development of a shared NES.3 The work of Aotearoa Circle’s Low Carbon Energy

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https://www.genesisenergy.co.nz/about/sustainability/caring-for-our-environment https://issuu.com/mercurynz/docs/industry_open_letter_on_decarbonisation?fr=sYzhiMDE4MTY2Nzk

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Roadmap to 2050 is also progressing and brings together diverse expertise across private and public energy sector entities and will provide valuable input to the NES process.

Mercury considers one role of the Energy Task Force could be to specifically consider and provide expert advice to government on the options to address a main transition challenges for the economy to higher proportions of renewable energy. This could include how thermal generation assets can be phased-out while still maintaining security of supply and affordability and how electricity sector market arrangements could evolve to maintain investment signals and efficient operation.

Resource management frameworks should explicitly recognise and support decarbonisation The CCC final advice to government recommended that barriers to future renewable generation investment should be explicitly addressed in reforms to the resource management frameworks. Mercury and the wider industry have consistently called for more explicit recognition of climate change in the National Built Environment Act (NBEA), to (among other things), link into the Climate Change Response Act (CCRA) and recognize the contribution increasing renewable energy use can play in decarbonisation.

There are some encouraging pointers in the recent Environmental Select Committee (ESC) Inquiry Report recognising the need to create such linkages and the contribution increasing renewable energy use can play in decarbonization. However, there is limited detail on how this might achieve New Zealand’s greenhouse gas reduction targets and budgets. There remains a need to expressly reference the climate system and its biophysical limits and outcomes and afford them priority over competing outcomes. Without this high level prioritisation, consenting and building the renewable electricity generation and transmission projects quickly enough to meet the proposed emission budgets and plans will be challenging.

Opportunities to achieve more rapid decarbonisation – the importance of industry collaboration Mercury welcomes and supports the policy measures outlined in the consultation document to accelerate the decarbonisation of the transport and process heat sectors which are the largest decarbonisation opportunity for New Zealand. Much progress has been made and the government should be acknowledged for listening to and implementing a wide range of measures supported by industry as well as allocating targeted government funding (e.g. Clean Car Discount, Low Emission Transport Fund, GIDI fund and State Sector Decarbonisation Fund).

The development of public-private partnerships provides an opportunity for government to speed up progress towards targets at least cost to the taxpayer. Such opportunities are available to assist an equitable transition and to support the creation of innovative business models.

For example, Mercury has in the past initiated a successful electricity pricing plan pilot with Kainga Ora. In transport, through our partnership with Big Street Bikers, we are supporting the delivery of public secure parking, charging and wayfinding docks (called “Locky Docks”) for e-bike users. We also have experience in operating a subscription service aimed at making it easier for New Zealanders to get behind the wheel of an EV by eliminating up-front costs and managing insurance premiums, warrants of fitness, vehicle registration and maintenance. We would welcome the opportunity to trial these types of initiatives in novel settings alongside government agencies, whether it be for use in the community or within government itself.

To enable such partnerships, we encourage the government to think about specific ways it can encourage and participate in innovative low-carbon trials in both transport and other sectors. This may require collaboration across agencies to identify opportunities for innovation, proactively seeking expressions of interest from outside government and a suitably streamlined approach to “procurement” for trials.

Process heat conversion to renewable electricity is more likely to pose challenges in the short term due to the relative economics with biomass and capital investment cycles. Mercury sees opportunities for increased public and private sector collaboration on supporting industrial decarbonisation as renewable generation investment increases. The GIDI fund has played a valuable role in helping to support industry decarbonisation and process heat conversion and Mercury considers further scaling-up of this model could be evaluated to deliver further longterm benefits.

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Opportunities also exist to further reduce emissions from the electricity sector. Mercury and other geothermal generators are actively trialling technology to sequester and reinject carbon emissions back into geothermal reservoirs. If successful, this technology would have the potential to significantly reduce the direct emissions from geothermal generation.

Mercury looks forward to engaging constructively with government, industry stakeholders, regulators and consumers on a finalised emissions reduction plan and continuing to support Aotearoa New Zealand to achieve its decarbonisation goals. As the discussion document outlines, we all have a role to play in working together to manage the just transition to a low carbon economy that enables our environment, our communities and organisations to continue to thrive.

Yours sincerely

Nick Wilson Head of Government and Industry Relations

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Appendix A: Mercury response to consultation questions Consultation Question

Mercury Response

Meeting the Net Zero Challenge – Transition Pathway 1. Do you agree that the ERP should be guided by a set of principles? Are the five principles set out the correct ones?

Mercury broadly agrees that the Emissions Reduction Plan (ERP) should be guided by a set of principles. We would however like to understand if there is any weighting given to certain principles over the others. In the context of our climate emergency, principles that give rise to stable policy relying on evidence-based solutions that have wider social and environmental benefits should be given priority weighting.

Whilst we have no issue with the principles proposed we would like to see the addition of a principle giving weight to the importance of the partnership between government and the private sector. We will refer to this throughout our submission as in our view successful collaboration between the public and private sectors is key to making fast and efficient progress towards our Net Zero 2050 goals. Government should be required to actively promote private sector solutions where there is a clear benefit in doing so.

2. How can we further enable private sector action to reduce emissions and help achieve a productive, sustainable and inclusive economy? In particular what key barriers could we remove to support decarbonisation.

The ERP must provide clear policy direction that will support continued investment in renewable electricity. Policy should be practical, based on good modelling and be robust enough to provide a pathway even when unexpected changes occur.

Regulatory Barriers The key barrier to private sector investment is regulatory uncertainty. This is in relation to both the environmental consenting process and electricity market settings. We submitted at length on these issues in our submission to the Climate Change Commission (CCC)4 however to summarise: 1. Environmental legislation To achieve electrification of the economy in the timelines contemplated by the CCC there will need to be strong government policy support. The Environment Select Committee (ESC) has recently completed its Inquiry on the exposure draft of the proposed National and Built Environments Act (NBEA). There are some encouraging pointers in the ESC Inquiry Report recognising the need to create linkages between the NBEA and Climate Change Response Act (CCRA) and the contribution increasing renewable energy use can play in decarbonization. However, there is limited detail on how this might be achieved in order to link NBEA outcomes with the climate change response required to achieve New Zealand’s greenhouse gas reduction targets and budgets. In Mercury’s view there remains a need to expressly reference the climate system and its biophysical limits and outcomes and afford them priority over competing biophysical limits and outcomes. Without this high level prioritisation, consenting and building the renewable electricity

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The Mercury Building, 33 Broadway, Newmarket 1023 PO Box 90399, Auckland 1142

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generation and transmission projects quickly enough to meet the proposed emission budgets and plans will be challenging. For a more comprehensive discussion of NBEA issues please see question 33 below.

The government should also consider whether the Electricity Industry Act 2010 should include a climate change objective in the statutory objectives of the Electricity Authority.

2. Electricity Market Given the size of the investment challenge in new renewable electricity it is imperative that the investment signals provided through the current market frameworks are maintained to give confidence to capital holders to continue to invest in the electricity sector. a. Mercury supports the CCC's view that meeting Aotearoa New Zealand’s 2030 and 2050 emissions reductions targets requires a long-term view of investments and infrastructure developments. Investments being made now in new renewable generation and refurbishing existing renewable generation will have asset lives that extend potentially even beyond 2050. Historical uncertainty around the future of the Tiwai aluminum smelter for example has been a major impediment to renewables investment in the South Island however investor confidence has been temporarily restored by the smelter’s power supply agreement with Meridian. b. The New Zealand Battery Project run by MBIE is considering the role of long duration storage options, particularly a large centralised scheme in the South Island at Lake Onslow estimated to cost around $4 billion. A large scale pumped hydro scheme would be a major intervention into the electricity market creating significant uncertainty and risk during a period where capital attraction to the sector is essential if the country is to meet our decarbonization goals. c.

3. In addition to the actions already committed to and the proposed actions in this document, what further measures could be used to

Other regulatory processes are also in train to better understand how the electricity market should evolve to accommodate an increasingly renewable power system. For example, the Electricity Authority is investigating options for price discovery in the wholesale market under a 100% renewable electricity supply. The Electricity Authority is also carrying out work on analyzing competition in the wholesale market, investigating the extent to which contract price discrimination is an issue in the wholesale market and working to better understand opportunities and challenges to the future security and resilience of the power system. We also understand that MBIE’s energy markets work programme is examining the transition to a 100% renewable electricity grid. All these workstreams are interrelated yet occurring in parallel. We see a risk of a fragmented approach to future electricity market design creating uncertainty for the sector, which may in turn dampen future investment in renewable generation.

Mercury encourages the government to build partnerships with the private sector in order to achieve quicker and more efficient progress towards targets. This issue is discussed at question 1 above and throughout our submission.

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help close the gap?

Further clarity would be useful on the assumptions around the contribution from the electricity sector in the modelling (see response to Q.69) but Mercury considers additional contributions may be possible. As an example Mercury and other geothermal generators are actively trialling technology to sequester and reinject carbon emissions back into geothermal reservoirs. If successful, this technology would have the potential to significantly reduce the direct emissions from geothermal generation.

Mercury sees opportunities for increased public and private sector collaboration on supporting industrial decarbonisation as renewable generation investment increases. The GIDI fund has played a valuable role in helping to support industry decarbonisation and process heat conversion and Mercury considers further scaling-up of this model could be evaluated to deliver accelerated emissions reduction.

4. How can the ERP promote nature-based solutions that are good for both climate and biodiversity?

By including these as policy proposals for assessment and where appropriate providing funding through existing funds or targeted funds. It would be important that any nature-based solutions deliver emission reductions and do not have unintended consequences.

5. Are there any views you wish to share in relation to the Transition Pathway?

The suggested measures represent a very large body of work and so it is vital that the government prioritises activity towards the most significant abatement outcomes over short- and long-term horizons. Development of a road map in collaboration with local government, iwi Maori and the private sector will also be important so everyone has a clear idea about the workstreams will be integrated and sequenced. The National Energy Strategy (NES) should help sequence the transition towards a low carbon economy.

We also desire more clarity on what is expected of the electricity sector as part of the ERP. For example, we note that the emissions reduction contributions assumed from “energy and industry” for 2022-2025 are likely less ambitious than that of the CCC’s demonstration path (1.5 to 3.3 Mt vs.

4.3 Mt, according to our estimates). What are the assumptions for the contributions from the electricity sector specifically? The electricity sector is responding positively to the challenge of supporting New Zealand emissions reductions targets by 2050. Around $2bn in new renewable generation investment is underway which is consistent with the required contribution from the electricity sector to achieve the CCC’s demonstration path and the emissions intensity the Science Based Targets Initiative identifies to limit global warming to a 1.5-degree future.

6. Which actions to reduce emissions can also best improve our ability to adapt to the effects of climate change?

In our view faster action on current measures combined with education and leadership from government will best improve our ability to adapt to the effects of climate change. The consultation notes the areas that are most relevant.

7. Which actions to reduce emissions could increase future risks and impacts of climate change and therefore need to be avoided?

The complexity of the energy sector means that one of the greatest challenges facing government is making policy to address the big picture rather than multiple policies to address individual issues as they arise. The development of an NES will help create the overview required as will credible leadership from industry and collaboration with government. Based on actions taken by government to date to reduce emissions we recommend caution around the following: 1. Focus on 100% renewables CCC modeling shows that flexible gas supplies will be required beyond the 2030 target for the government’s 100% renewable electricity goal.

Without an appropriately managed transition for fossil fuels from the

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electricity system Aotearoa New Zealand runs the risk of perversely increasing emissions to ensure security of supply, (as is currently occurring with the increase in coal generation due to the shortage of gas supplies), or raising electricity prices and delaying the transition of the transport and process heat sectors to renewable electricity and alternative fuels. We therefore support that the government’s 100% renewable electricity goal is now referred to as “aspirational” and urge decarbonisation efforts to focus on the actions where the greatest emissions reductions can be gained.

2. Remaining technologically neutral In principle we support the government focusing on removing barriers to innovation and uptake of new technology that may play a significant role in reducing emissions rather than the introduction of direct subsidies for technologies. Nobody is in a position to foresee which technologies will prove the most successful and cost effective so allowing for trials and ‘learning by doing’ is a good approach. In the context of the electricity market for example, a significant strength has been the commitment by successive governments to avoid picking technological winners via distortionary interventions like subsidies or bans.5 This has allowed New Zealand to develop a diverse and complimentary mix of renewable and non-renewable generation technologies responsible for ensuring the country’s world leading performance in balancing the energy trilemma.

Please also see our comments at question 2b above in relation to Lake Onslow.

Treaty partners 12. Reflecting on the CCC recommendations for a mechanism that would build strong Te Tiriti partnerships, what existing models of partnership are you aware of that have resulted in good outcomes for Maori?

Through our own experience we can attest to the benefit of genuine, active and enduring partnership with iwi/Maori. Mercury has long-term commercial partnerships with Tauhara North No. 2 Trust and Tuaropaki Trust in geothermal electricity generation in the central North Island. We also have longstanding relationships with the Waikato River iwi. We also have helped establish and support a range of programmes with iwi/Maori and other regional organisations such as educational initiatives, environmental and ecological restoration projects and a range of Māori cultural support initiatives.

Equitable transition 13. Do you agree with the objectives for an Equitable Transitions Strategy (ETS) as set out by the CCC? What additional objectives should be included.

We broadly support the objectives for an Equitable Transition Strategy (ETS) linked to the Government’s Economic Plan. We note however that an “equitable” transition seems to only apply to communities, small business and the work force. An ETS should address all groups who are impacted by decarbonisation including industry. For example, no mention is made of managing the risk of stranded assets, such as gas pipeline infrastructure and the impact that will have on larger operators who create significant employment opportunities and other positive spin offs. We would welcome greater specificity.

We support the CCC’s focus on measures to increase the likelihood of an equitable, inclusive and well-planned climate transition. For example, the transition to a low-carbon transport system should ensure equitable access,

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be it micro-mobility, public transport and/or electric vehicles. Equitable access in our eyes should address not just socioeconomic disparities but also the needs of those who are differently abled.

14. What additional measures are needed to give effect to the objectives noted by the CCC, and any other objectives you think should be included in an ETS?

As we have mentioned above, the development of public private partnerships provides an opportunity for government to speed up progress towards targets at least cost to the taxpayer. Such opportunities are available to assist an equitable transition and to support the creation of innovative business models.

For example, Mercury has in the past initiated a successful electricity pricing plan pilot with Kainga Ora. In the transport sphere, we are passionate about exposing Kiwis to the joys of electric transport, whether it be an e-scooter, ebike, e-bus or EV. Through our partnership with Big Street Bikers, we support the delivery of public secure parking, charging and wayfinding docks (called “Locky Docks”) for e-bike users. We also have experience in operating a subscription service aimed at making it easier for New Zealanders to get behind the wheel of an EV by eliminating up-front costs and the need to worry about managing insurance premiums, warrants of fitness, vehicle registration and maintenance. We would welcome the opportunity to trial these types of initiatives in novel settings alongside government agencies, whether it be for use in the community or within government itself.

To enable such partnerships, we encourage the government to think about specific ways in which it can encourage and participate in innovative lowcarbon trials in both transport and other sectors. This may require collaboration across agencies to identify opportunities for innovation, proactively seek expressions of interest from outside government and a suitably streamlined approach to “procurement” for trials.

16.

Mercury would strongly support revenue recycling from higher NZ ETS carbon prices to help decarbonisation projects and this could include support for lower socio-economic groups. We are pleased to see this under consideration in the ERP under Funding and Financing and would urge Treasury and the Ministry for the Environment to develop the appropriate mechanisms to enable this.

Please also see our response to question 14 above.

19. How could the uptake of low-emissions business models and production methods be best encouraged?

Government should play a leading role in decarbonisation and be focussed on action. The government can demonstrate leadership through education and its own procurement to drive ‘Avoid, Shift and Improve’ behaviours to accelerate decarbonisation, particularly in the transport sector. In particular: •

Government is in a unique position to model the behaviours required to enable New Zealand’s transition to a low carbon economy. In addition to setting the strategic direction for climate change, it can help New Zealanders understand why and how we must contribute as individuals and businesses to lowering our emissions. The government’s handling of the Covid-19 pandemic has shown how well-orchestrated and consistent communications can modify behaviours significantly. A similar approach should be adopted to tackle the decarbonisation transition - encouraging people to change or adopt new behaviours around reducing/avoiding travel, using active modes, using public transport and/or EVs.

•

An ongoing all-encompassing education programme should be backed up by government leadership in adoption of low carbon transport. For example, we strongly support government transport

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procurement processes giving priority to EVs and/or shared mobility alternatives. In this way, New Zealanders will start to see what the new normal should look like, as modelled by our elected representatives.

•

Remove regulatory barriers (see question 2 above);

•

Government should improve access to decision makers and be open to partnering with the private sector to trial innovative ideas and speed up progress towards targets, (see our cover letter and question 1 above).

Aligning systems and tools – Government accountability 21. In addition to the CCC monitoring and reporting on progress what other measures are needed to ensure government is held accountable?

Whilst the ERP is a comprehensive document, there is little clarity or specific commitment as to how targets will be achieved. To incentivise action, Mercury would like to see more specific and short-term goals included in the ERP. Short term goals are essential steppingstones if longer term targets are to be met. Further, government cycles and governance mean no one is around to be held accountable to longer term targets, so there must be short term targets to hold this government accountable.

Regarding specificity of targets, please refer our response to question 5 on the need for more clarity on what is expected of the electricity sector as part of the ERP.

22. How can new ways of working together, like mission-orientated innovation, help meet our ambitious goals for a fair and inclusive society and a productive, sustainable and climate-resilient economy?

Mercury is strongly supportive of mission-oriented innovation as it aligns with our view that government and the private sector need to be working more collaboratively in order to achieve our climate change goals. We would welcome further discussion on this matter with government.

23. Is there anything else you wish to share in relation to government accountability and coordination?

As mentioned in our cover letter, Mercury would like the government to establish an Energy Sector Taskforce to provide advice and support to the government on climate related policy decisions. Sometimes government is removed from the realities that businesses face and an advisory group of this nature could help keep policy supportive of the decarbonisation actions required.

Funding and financing 24. What are the main barriers or gaps that affect the flow of private capital into lowemissions investment in Aotearoa?

26. What else should the Government prioritise in directing public and private finance into low-emissions investment and activity?

Please see our response to question 2 above.

We recommend the following priorities: •

Look at fitness for purpose of existing systems and funding mechanisms to support the transition away from private vehicle travel. E.g. whilst the Public Transport Operating Model (PTOM) that is currently under review may have facilitated adequate outcomes in the context of its original objectives, it is likely insufficient to support the transition to cleaner public transport that is required now. For example, it does not readily address how bus operators will be

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incentivised to upgrade to more costly electric fleets. Similarly, we agree that the National Land Transport Fund (NLTF) was designed to maintain “the essentials” of New Zealand’s transport system and that emissions reduction is a step change far beyond what it was ever intended to do. This must be rectified. Mercury supports better alignment across disciplines and across central and local government so that integrated planning can be progressed and backed up by the requisite funding and prioritisation of transport decarbonisation initiatives.

27. Is there anything else you wish to share in relation to funding and financing?

•

Make it easier for a range of businesses in the private sector to access funds such as GIDI through increased funding and simplified and broader application.

•

We support initiatives like the State Sector Decarbonisation Fund and clean-powered public service fund to decarbonise process heat and vehicles in government. Government should be taking a lead and modelling the behaviours expected of the wider community and private sector.

•

Spending should be prioritised using clear and transparent criteria towards lowest marginal cost abatement over short- and long-term horizons.

•

Providing targeted funding and other support for developing, trialling and supporting new technology and approaches. For example, we support broadening the Low Emissions Vehicle Contestable Fund to become the Low Emissions Transport Fund with increased funding.

The settings on targeted funding and support like these need to be carefully selected (e.g. funding too focussed on early stage research could come at the cost of scaling commercial business models and vice versa.)

•

The private sector has skill, expertise and funding to contribute to decarbonisation that will help accelerate action and progress towards targets. To enable such partnerships, we encourage the government to think about specific ways in which it can encourage and participate in innovative low-carbon trials in both transport and other sectors.

This may require collaboration across agencies to identify opportunities for innovation, proactively seek expressions of interest from outside government and a suitably streamlined approach to “procurement” for trials.

Please see our response to question 16 above.

Emissions pricing 28. Do you have sufficient information on future emissions price paths to inform your investment decisions?

Yes, please see our response to Q59.

30. Do you agree the treatment of forestry in the NZ ETS should not result in a delay, or reduction in effort, in

In principle yes, the faster Aotearoa can decarbonise the better but it will be important to consider the costs and benefits along with risks and opportunities.

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reducing gross emissions in other sectors of the economy? 30 31. What are your views on the options presented above to constrain forestry inside the NZ ETS? What does the Government need to consider when assessing options?

What unintended consequences do we need to consider to ensure we do not unnecessarily restrict forest planting?

We have no specific comments, it will be important to fully assess all the options with a focus on avoiding unintended consequences.

32. Are there any other views you wish to share in relation to emission pricing?

See our comments at question 16 above on the importance of developing and implementing a policy on recycling revenue from the NZ ETS and maintaining a work programme to monitor and continuously improve the implementation of the NZ ETS.

Planning 33. In addition to resource management reform, what changes should we prioritise to ensure our planning system enables emissions reduction across sectors? This could include partnerships, emission impact quantification for planning decisions, improving data and evidence, expectations for crown entities, enabling local government to make decisions to reduce emissions.

The proposed emission budgets and emission reduction plans under the Climate Change Response Act 2002 are heavily dependent on increased electrification. Mercury has previously submitted to the CCC6 and the Environment Select Committee (ESC) Inquiry on the exposure draft of the Natural and Built Environments Bill (NBEB)7 regarding the need for strong government policy to prioritise consenting and building the renewable electricity generation and transmission projects to meet the expected increased demand for electricity in the necessary timeframes.

Copies of those submissions are attached.

The ESC Inquiry report8 identifies that there is more to be done to incorporate the built environment into the purpose of the NBEB. Two important tools have been drafted in the NBEB – ‘outcomes’ and ‘limits’, which are intended to trickle down into a National Planning Framework, and eventually plans enabling activities. The direction that the outcomes and limits sections take in the NBEB is therefore very important. Mercury sees a real risk that neither the ‘outcomes’ nor ‘limits’ adequately provide for the scale of electrification that must be required to achieve the ERP. In relation to the NBEB’s ‘outcomes’, the ESC Inquiry report has recognised the important nexus between reducing greenhouse gas emissions and

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https://haveyoursay.climatecommission.govt.nz/comms-and-engagement/future-climate-action-foraotearoa/consultation/view_respondent?uuId=470208098 7

https://www.parliament.nz/en/pb/sc/submissions-and-advice/document/53SCEN_EVI_111944_EN5781/mercurynz-limited 8

Environment Select Committee Inquiry on the Natural and Built Environments Bill: Parliamentary Paper to the House of Representatives 1 November 2021 recommendation 5.

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increasing the ‘utilisation’ of renewable energy (redrafted Outcome 13A(c)(i)).

However, the section does not specifically provide for ‘electrification’ or recognise the need for the development of additional electricity generation.

Moreover, there remains no prioritisation between outcomes. The renewable energy/climate change outcome sits alongside a range of other outcomes without any elevation or consideration of its overarching nature and significance with respect to achieving the CCRA’s Emissions Budgets and the ERP. Consequently, there is a considerable risk that climate change outcomes may be overlooked in pursuit of other outcomes.

The NBEB’s environmental ‘limits’ as proposed will be set for a number of topics, none of which specifically include climate change. So, it remains unclear if limits could be set for the climate system which is not specifically identified in the redrafted clause 12B(1). As currently drafted, the ‘limits’ have the potential to exclude or prevent critical electrification projects (both generation and transmission).

The ESC identified that there is a work programme to determine how the NBEA can be used to progress the achievement of emissions reduction goals under the Climate Change Response Act and to resolve conflicts between outcomes, but how this is achieved remains unclear 9. The NBEB in its current form does not yet provide the clear and strong direction for provision of renewable energy and electrification needed in the ERP. Given the above, while the NBEB includes recognition of the importance of renewable energy use as a means of reducing emissions, a weakness remains as to specific recognition of the role renewable electricity plays and how conflicts with other outcomes are to be resolved. As currently drafted, there is a real risk that the NBEB will hamper, rather than support or promote the ERP and the achievement of the budgets.

The ERP represents a substantial opportunity to restate the electrification challenge and chart a direction for the necessary links between the Climate Change Response Act 2002 (CCRA) and the NBEA. We suggest that the ERP identify the relationship between the National Planning Framework and Regional Spatial Plans under the Strategic Planning Bill and the CCRA’s Emissions Budgets, and the strategic documents that give effect to the ERP (including in particular the National Energy Strategy). Specifically, we suggest that the ERP provides that: •

the National Energy Strategy identify the additional expected demand for renewable electricity generation necessary to provide for the transition away from fossil fuel energy use; and

•

the NBEA reform and implementation processes that will be ongoing throughout the first emissions budget should consider: o

setting environmental limits related to GHG emissions that are consistent with emissions budgets;

o

requiring the National Planning Framework and Regional Spatial Plans to be consistent with the ERP and emissions budgets;

o

requiring the National Planning Framework and Regional Spatial Plans to seek to provide for adequate renewable generation consistent with the ERP and the strategic documents issued under it, in particular the National Energy Strategy; and

provide for emission impact quantification in relation to development projects 9

Ibid -recommendation 23.d. and page 44.

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so that decision-makers have a strong evidence basis for the cumulative benefits to be gained from emission reduction initiatives.

34. What more do we need to do to promote urban intensification, support low-emissions land uses and concentrate intensification around public transport and walkable neighbourhoods?

It is contemplated that the Strategic Planning Act will through regional spatial strategies provide a means of better integrating urban growth and infrastructure provision. Regional spatial strategies provide an opportunity for transportation planning and urban intensification to be conceptualised with emissions reduction outcomes in mind. The aspiration is to bring together processes that are currently highly fragmented across resource management, transport and local government legislation and regulation.

The ERP could play a valuable role in identifying opportunities for digital data management and emission modelling to support decisions on intensification and transport mode choice and design. By way of example, airsheds are currently managed by regional councils and vehicle emissions are regulated under the Land Transport Act10 but there is no means to manage overall emissions. The Infrastructure Commission has similarly identified the need to make the right infrastructure choices to minimise carbon emissions from building new infrastructure and to reflect the true cost of carbon in infrastructure projects11.

An integrated approach to data management to improve access to quality data would lead to more informed decisions and a greater likelihood that emission reduction outcomes can be achieved.

Research 40. What are the opportunities for innovation that could generate the greatest reduction in emissions?

What emissions reduction could we expect from these innovations, and how could we quantify it?

The private sector has skill, expertise and funding to contribute to decarbonisation that will help accelerate action and progress towards targets. To enable such partnerships, we encourage the government to think about specific ways in which it can encourage and participate in innovative low-carbon trials. This may require collaboration across agencies to identify opportunities for innovation, proactively seek expressions of interest from outside government and a suitably streamlined approach to “procurement” for trials.

Behaviour change 40. What information, tools or forums would encourage you to take greater action on climate change?

Please see our response to question 19 above.

Mercury would like to see more action from government in this regard and a behaviour change fund may support acceleration of measures such as: •

A climate change campaign focusing on the positive actions consumers can take to reduce emissions such as reducing vehicle kilometres travelled (VKT) using public transport, e-mobility and sharing models and adopting active modes of transport; and

Government showing leadership in the adoption of electric vehicles and use of alternative modes of transport.

41. What messages and/or sources of information would you trust to inform you on the need and

As we have mentioned above, a government decarbonisation campaign will help create public awareness on changes required to incentivise action.

We also suggest that some form of public emissions tracker that identifies progress towards targets in each sector might be a useful source of

10

Land Transport Act 1998 s155 (1)(a).

Infrastructure Commission Draft Infrastructure Strategy - Rautaki Hanganga o Aotearoa 12 October 2021; pages 31 and 44.

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benefits of reducing your individual and/or your business emissions?

information/reference tool going forward.

Transitioning key sectors Transport 52. Transport Do you support the target to reduce VKT by cars and light vehicles by 20% by 2035 through providing better travel options, particularly in our largest cities, and associated actions?

Yes, Mercury supports the target to reduce VKT by cars and light vehicles by 20% by 2035 through providing better travel options. We commend the Ministry of Transport (MoT) for its consultation “Hikina te Kohupara” and the incorporation of feedback from that consultation into the ERP. The list of measures to reduce VKT is comprehensive. Funding should be unlocked to enable quick wins and spending overall should be prioritised towards lowest marginal cost abatement across short and long-term horizons. Further recommendations include: a. The government must begin by demonstrating its own commitment to transport decarbonisation. For example, the government can show such leadership through an ongoing all-encompassing public education programme as well as leading the field in its procurement of low carbon transport. b. We also believe that there are key pieces of work that will enable and accelerate other initiatives. For example, addressing limitations in the PTOM would accelerate decarbonising buses and help keep our cities moving. Increased funding for the NLTF will also be necessary to unlock these and other initiatives. c.

Priority should be given to initiatives that improve alignment between central and local government. Some initiatives could be combined with others to provide even greater efficiencies. One way to advance such an integrated transport decarbonisation approach could be to include transport as part of the National Energy Strategy.

d. Public and private sector partnerships will be necessary as not all modes (e.g. shared mobility) and supporting infrastructure (e.g. secure bike parking facilities) will be deployed by the public sector.

Public and private sector interaction will also foster greater innovation and attractiveness for individuals making transport choices around convenience, cost and comfort. e. We would support investigating changes to the usual procurement and ownership arrangements for zero-emission public transport, depots and supporting infrastructure. This could be an opportunity for non-traditional transport industry participants to contribute beneficially. f.

53. Do you support the target to make 30% of the light vehicle fleet zeroemissions vehicles by 2035, and the associated actions?

Pricing is an important tool to consider along with others bearing in mind that it can be punitive and therefore equitable transition considerations will need to be factored in.

Mercury supports the target to make 30% of the light vehicle fleet zeroemissions by 2035 and the associated actions. We are pleased to see government commitment to: a. implement community solutions to make low-emission transport options accessible for low-income New Zealanders. The CCC recommended there may be benefits in fostering vehicle leasing options and new models of shared ownership of transport, such as by linking new housing builds to communal transport offerings.

Government could support innovation in this regard by partnering with the private sector to foster innovative transport models for itself

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and its agencies. The private sector has skill, expertise and funding to contribute to decarbonisation that will help accelerate action and progress towards targets. To enable such partnerships, we encourage the government to think about specific ways in which it can encourage and participate in innovative low-carbon trials. This may require collaboration across agencies to identify opportunities for innovation, proactively seek expressions of interest from outside government and a suitably streamlined approach to “procurement” for trials. b. work with industry on addressing supply constraints facing lowemissions vehicles. In our view this is a priority and the government should establish its clean vehicle sector leadership group to tackle this issue as a matter of urgency.

54. Do you support the target to reduce emissions from freight transport by 25% by 2035, and the associated actions?

We support the target to reduce emissions from freight transport by 25% by 2035 and the associated actions.

55. Do you support the target to reduce the emissions intensity of transport fuel by 15% by 2035 and the associated actions?

Mercury supports the target to reduce the emissions intensity of transport fuel by 15% by 2035 and the associated actions.

56. The CCC has recommended setting a time limit on light vehicles with internal combustion engines entering, being manufactured, or assembled in Aotearoa as early as 2030. Do you support this change, and if so, when and how do you think it should take effect?

Mercury supports an ICE phaseout that allows for a timely yet prompt transition to EVs and/or public transport/active substitutes. A phaseout with ban on the import of ICE vehicles in the early 2030s would send a strong signal to manufacturers about the future supply requirements of our fleet. It would also remove the risk that New Zealand becomes a dumping ground for ICE vehicles when other countries with right hand drive vehicles have implemented a ban.

57. Are there any other views you wish to share in relation to transport?

Throughout our submission we have referred to how the private sector.

Government could encourage better collaboration by identifying its key decision makers and fast tracking its engagement with private sector participants who have innovative solutions that will accelerate decarbonisation. has skill, expertise and funding to contribute to decarbonisation that will help accelerate action and progress towards targets. To enable such partnerships, we encourage the government to think about specific ways in which it can encourage and participate in innovative low-carbon trials. This may require collaboration across agencies to identify opportunities for innovation, proactively seek expressions of interest from outside government and a suitably streamlined approach to “procurement”

Road freight will be crucial for years to come so a focus on decarbonising transport fuels is crucial. Electrification, biofuels, hydrogen-derived e-fuels and hydrogen could all play a role in the transition. Initiatives should be carried out in close consultation with the private sector in order to drive rapid emissions improvements.

We would like to see the biofuels mandate expanded to include other all “drop-in” low emissions fuels. Given the potential for slow turnover of fleets and/or supply/cost/technological barriers to direct electrification or hydrogen fuel cells, the Government should support the exploration of both biofuels and e-fuels (green hydrogen-derived synthetic fuels) as part of the mandate.

Biofuels and e-fuels will both have roles to play in transport decarbonisation, especially since the production of the latter may offer a stepping-stone towards the direct use of green hydrogen in transportation and the wider economy.

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for trials.

Energy and industry 58. Energy Strategy In your view, what are the key priorities, challenges and opportunities than an energy strategy must address to enable a successful and equitable transition of the energy system?

Development of the NES provides an opportunity to bring together the wealth of knowledge being generated in both public and private sectors to evaluate the most optimal pathway for the decarbonisation of the energy system within the New Zealand economy. This objective could be best supported by establishing a forum that brings together policy makers, regulators and industry experts to more purposefully consider the energy transition challenges and opportunities under the NES development process. Please see our cover letter for a more complete discussion of this issue.

We also note the Low Carbon Energy Roadmap work completed by the Aotearoa Circle. This is an important input into the NES that identifies actions for all parties across the sector.

Mercury recognises the enormity of the task and looks forward to participating in collaborative discussions. There are however some key priorities that we would like to see addressed in the NES and these are set out below.

Key principles The NES should promote a whole of system approach - balancing the trilemma of energy security, equity and sustainability. Within the overarching parameters of the trilemma the NES should prefer opportunities for the decarbonisation transition that are simple, easily reversible, cost efficient and practically implementable whilst at the same time provide the certainty required to maintain investor confidence, promote competition and minimise unintended consequences.

Long term priorities These are the most difficult issues to resolve but if government can set a clear pathway for New Zealand, we will be on track to ensure reliability and security of supply with 100% renewables. a. Fossil Fuel phase out Mercury agrees with the conclusions of the recent final report by the CCC that natural gas will be a critical fuel to ensure security of supply and generation flexibility to support renewables development while maintaining least cost electricity supply over the transition. We are encouraged by the ERP’s recognition that a 100% renewable target should be treated as aspirational, reflecting the CCC’s view that thermal support will be necessary beyond 2030 to ensure security of supply and general affordability.

The timing and sequence of the transition away from fossil fuels is however critical. Without an appropriately managed transition for fossil fuels from the electricity system Aotearoa runs the risk of perversely increasing emissions to ensure security of supply (as is currently occurring with the increase in coal generation due to the shortage of gas supplies) or raising electricity prices and delaying the transition of the transport and process heat sectors to renewable electricity and alternative fuels.

The NES should bring together the many existing industry and government workstreams underway focused on maintaining security in a more renewable market including MBIE’s NZ Battery project, the Electricity Authority’s future security and resilience project, price discovery project (being developed by MDAG) and further workstreams

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around managing the decarbonisation transition (forthcoming post submissions on the wholesale market monitoring review Nov 2021), along with Contact’s Thermal Co proposal, Genesis’s capacity market proposal and Southern Hydrogen a proposal to build commercial green hydrogen export facility in Southland.

Please also see our comments at question 61 below in relation the gas phase out. b. Dry Year Storage solution should support market signals and longterm investment Mercury supports the government’s objective to identify alternatives to fossil fuel generation in the long-term to manage dry year risk.

The New Zealand Battery Project (NZ Battery) is considering options to resolve the dry year storage problem with a focus on the large scale centralised pumped storage proposal at Lake Onslow. While this solution to the dry year challenge could enable the country to reach 100% renewable electricity, it could also cost taxpayers billions of dollars which would be better allocated to pursuing lower cost abatement options in other sectors such as transport and industry. Further, a large scale pumped hydro scheme would be a major intervention into the electricity market creating significant uncertainty and risk during a period where capital attraction to the sector is highly important if the country is to meet its decarbonisation goals.

Reliance on a single solution, like Onslow would require it to be the most efficient option by a margin significant enough to justify sole reliance on it. Diversifying solutions with a combination of renewable generation overbuild, energy storage and demand response would help spread this risk. NZ Battery must ensure that Onslow and other least cost options are evaluated and that there is a credible assessment of the risks and opportunities offered by each alternative. Mercury strongly supports transparent and robust decision-making processes for all options with stage gates to test Onslow against other emerging dry year solutions, (for example, Meridian and Contact’s commercial scale green hydrogen export hub project).

The best solutions are complex and will reveal themselves over time and as technology develops. The NES must ensure that our dry year storage solution is able to evolve at the right pace, in accordance with the right processes and in support of market signals and long-term investment. c. Prioritise removing barriers to investment - consenting As mentioned above at question 2, our consenting environment in New Zealand is currently a significant barrier to progress.

Mercury supports the objectives of the resource management system reform but the task of electrifying the economy is critical, urgent and needs to be done at scale. New Zealand is currently not on track to meet our climate change targets, nearly 60% of our total energy requirements will need to come from electricity by 2050 up from 25% in 2016. As much generation will need to be built in the next 15 years as was built in the past 40 years. Transpower has estimated that approximately 70 new grid-scale connections will be required, 40 to connect new power stations and 30 to accommodate increased electricity demand on the grid due to electrification. This represents on average close to five new connections per annum - a significant increase in Transpower’s workload. Small scale distribution and generation will play a role but the bulk of the

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infrastructure will need to be built at scale.

This scale of investment in new generation and transmission will require a regulatory framework that is enabling. We are concerned that the NBEA will not provide the necessary policy coherence and direction to achieve the transformational blueprint required.

If we are to encourage continued investment in renewable generation to achieve Net Zero by 2050 the NES must prioritise climate change response outcomes over other outcomes to protect and enhance various biophysical attributes of the environment, especially where these can be mitigated.

Please also see our response to question 33.

59. Energy strategy What areas require clear signalling to set a pathway for transition?

The NES should be underpinned by a clear sense of how the various components of the energy system interact with each other in a dynamic sense in order to avoid introducing policies and measures that have unintended consequences.

Electricity market settings Mercury considers that the current electricity market policy settings are sending the right signals for investment in new renewable electricity generation.

The electricity market has already delivered Aotearoa New Zealand’s most significant emissions reduction. Due to flat demand growth between 2006 to 2013 and the resulting reduction in wholesale prices, a rebalancing of supply occurred with the efficient retirement in 2015 of around 450MW of thermal gas-fired generation in Auckland by both Mercury and Contact Energy. This permanently removed 2 million tonnes per annum from New Zealand’s carbon emissions, equivalent to entire annual emissions of the aviation sector in Aotearoa New Zealand. Mercury is not aware of any larger contribution to reducing emissions from any sector over this period. Most importantly, this occurred through the market without the need for any government intervention and without any costs or risks to New Zealand taxpayers.

Transpower has estimated that overall demand for electricity will grow by around 55% to 2050, largely due to the electrification of transport while decarbonizing process heat and projected population growth make up the and the remainder.12 To meet this demand, the CCC expects renewable electricity generation will need a build of about 13TWh.13 The electricity sector has already committed $2 billion to new renewable generation, equivalent to 8% of national demand. This plus further expected near-term investment will get New Zealand to 95% renewable electricity generation in the next 5 years. This development will bring the sector within the emissions intensity required to contribute to a 1.5 degree future.

Given the size of this investment challenge it is imperative that the investment signals provided through the current market frameworks are maintained to give confidence to capital holders to continue to invest in the electricity sector.

12https://www.transpower.co.nz/about-us/transmission-tomorrow 13

https://ccc-production-media.s3.ap-southeast-2.amazonaws.com/public/Inaia-tonu-nei-a-low-emissions-futurefor-Aotearoa/Inaia-tonu-nei-a-low-emissions-future-for-Aotearoa.pdf, page 175

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As the penetration of renewable electricity generation increases there will be a need to ensure that the market continues to adapt and is flexible to change. This is particularly the case as the sector retires thermal generation which currently plays an important role in signalling the marginal cost of generation for future investment. Market settings must continue to evolve so they are fit for purpose and deliver the best outcomes for consumers.

Mercury welcomes debate on change to our market settings and is contributing positively to a number of reviews currently in progress. 14 We would welcome the opportunity to share some of this work with MfE and be part of any industry group formulated to help the government develop a strategy.

NZ ETS Settings Mercury agrees with the CCC that the main driver of emissions reduction should be a broad-based carbon price provided by the NZ ETS. Rising carbon prices will incentivise Mercury to further develop carbon capture and storage technology for the removal of greenhouse gas emissions from our geothermal plants and reinjection into nearby reservoirs. Actions such as this will contribute to further emissions reductions for the energy sector.

While rising carbon prices will impact wholesale electricity prices in the short term until fossil fuels are phased out this will need to be managed as part of the transition to a fully renewable electricity system.

Mercury supports the review of current governance arrangements 15 and the reform of industrial allocation. Work on recycling the revenue from the NZ ETS to those who are disproportionally affected by rising energy costs will be an important work stream for ensuring a just transition.

60. Setting targets for the energy system What level of ambition would you like to see Government adopt, as we consider the CCC proposal for a renewable energy target?

It is pleasing to see Government is open to setting an energy system target rather than focusing solely on renewable electricity generation. This is consistent with the CCC recommendation to treat 100% renewable as aspirational and aim for 95-98%. Mercury supports a further review of this aspirational target in 2024 when decisions on NZ Battery are due. It is also consistent with the recent work commissioned by Meridian and Contact looking at establishing a commercial green hydrogen enterprise at the bottom of the SI which indicated a huge cost difference between achieving 99 versus 100% renewable electricity generation.

In relation to the level of ambition for a renewable energy system target Mercury supports the CCC recommendation of setting a target of 50% of all energy consumed coming from renewable sources by 2035 and treating the existing target of 100% renewable electricity by 2030 as aspirational. We agree with the CCC that replacing the renewable electricity target with a goal of 95-98% renewable electricity by 2030.

We refer MfE to Mercury’s submission to the CCC earlier this year (https://haveyoursay.climatecommission.govt.nz/comms-and-engagement/future-climate-action-foraotearoa/consultation/view_respondent?uuId=470208098) and work being undertaken by various forums on the renewables transition such as the Aotearoa Circle and Electricity Authority.

15 Mercury submission to Ministry for the Environment ‘Designing a Governance Framework for the NZ ETS’, September 2021.

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61. Gas phase out What are your views on the outcomes, scope, measures to manage distributional impacts, timeframes and approach that should be considered to develop a plan for managing the phase out of fossil gas?

There are a range of measures that could be considered to provide greater certainty to the gas sector around how gas generation and supply assets could continue to operate to support decarbonisation, while maintaining security of supply and overall affordability. These are areas Mercury would endorse being addressed through an energy strategy process. Given the pressing need for greater certainty, discussions around complimentary market measures should be fast-tracked in advance of a wider ranging energy strategy and could form an input into that final document.

68. Supporting development of low emissions fuels What level of support could or should Government provide for development of low-emissions fuels, including bioenergy and hydrogen resources, to support decarbonisation of industrial heat, electricity and transport?

We would like to see the biofuels mandate expanded to include other all “drop-in” low emissions fuels. Given the potential for slow turnover of fleets and/or supply/cost/technological barriers to direct electrification or hydrogen fuel cells, the Government should support the exploration of both biofuels and e-fuels (green hydrogen-derived synthetic fuels) as part of the mandate.

Biofuels and e-fuels will both have roles to play in transport decarbonisation, especially since the production of the latter may offer a stepping-stone towards the direct use of green hydrogen in transportation and the wider economy.

69. Are there any other views you wish to share in relation to energy?

Mercury notes the call in the consultation document for additional actions from industry to help support emission reductions, particularly in the first emissions period. It has been challenging to identify the specific contribution to emissions reduction modelled from the electricity sector in the high and low policy settings due to the aggregation with “energy and industry” and we would support the government providing a more detailed break-down to help inform the electricity sector. As noted in response to question 3 we consider there may be potential to reduce the emissions from geothermal through carbon sequestration and clarity would help the sector to understand if this would be considered additional to what was assumed in the modelling.

A good starting point for this work is the report on gas market settings prepared for MBIE by the Gas Industry Company and the NZ Gas Infrastructure Future Working Group Findings Report. 16 It will be important that Aotearoa avoid the issues that have plagued electricity markets in the UK and Texas when transitioning away from fossil fuels.

‘Gas Market Settings Investigation: Report to the Minister of Energy & Resources’, Gas Industry Company, 30 September 2021. NZ Gas Infrastructure Future Working Group Findings Report, 11 October 2021.

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