Historically, readily available and relatively affordable energy has driven our economic growth. For the future, New Zealand faces choices on the nature of the economy and how it meets the associated energy demands. An overriding consideration is how we can achieve sustainability, balancing affordability, security and environmental protection.

New Zealanders have energy choices but we, like other countries, need to balance often conflicting objectives. We are already a world leader in renewable energy use for electricity generation but 70% of our total energy supply still comes from fossil fuels, predominantly for use in transport.

Continued use of fossil fuels depends on their availability and the mitigation of their associated greenhouse gas emissions which a majority of climate scientists believe are related to climate change. In July 2005 the G8 world leaders accepted that human activity is a significant contributor to global warming.

Strategies to address this include:

Shifting away from using fossil fuels to renewable energy sources;

Continuing using fossil fuels but reducing emissions through more efficient technology or employing emissions-capture technologies;

Changing the nature of our economy and society to reduce energy demand.

If we continue to rely on increasing energy use to generate growth there is a significant challenge in securing the energy and enabling technologies we need to ensure sustainability. If we alter our economy to reduce the dependency on energy, a significant transformation is required to the structure of the New Zealand economy and the way we live. Part of the challenge will be to ensure that we have the economic growth necessary to afford the changes required. To maintain or increase our prosperity, even with a transformed more energy-efficient economy, energy demand will increase. This is an acceptable option for the future and can be sustainable.

We believe that both fossil fuels and renewables will be part of New Zealand’s future energy mix, with use of renewables being broadened and environmental effects of fossil fuel use mitigated through increased efficiency in conjunction with investment in carbon capture and storage where appropriate. The appropriate policy environments need to exist to encourage and support this transition. Sustainable use of New Zealand’s abundant renewables and fossil fuel energy resources depends on technology developments being realised. For some energy options New Zealand will need to be at the cutting edge of commercial application. A timing mismatch between technology requirement and commercial availability could leave New Zealand exposed to risks including energy shortages or not meeting climate change targets.

Decisions made now regarding energy infrastructure have long-term consequences. These decisions need to factor in New Zealand’s long term view of the future. government must take a leadership role in ensuring that we keep our energy options open. It can act to identify and promote new technologies and innovation through focused research and development. It must also help to co-ordinate the decisions of strategic significance to New Zealand by providing consistent policy signals and ensuring the planning process used allows for the development of energy infrastructure and fast take-up of better energy options as they emerge.