Energy and Resources Minister Simon Bridges has acknowledged Genesis Energy’s continuing commitment to phasing out its two remaining coal units by 2022.
“It is clear that this transitional arrangement is a short-term security of supply solution and the removal of the coal units remain a matter of when, not if,” Mr Bridges says.
Last year Genesis proposed closing their two Rankine Units at the Huntly Power Station by 2018, but the industry has signalled it requires further time to ensure security of supply issues can be managed.
“The announcement today is a pragmatic response that will provide breathing space, while ensuring New Zealand continues down the path of greater renewable generation,” Mr Bridges says.
“The decision, which continues to signal the end of coal-fired power generation in New Zealand, will give market participants the certainty they need to plan for the near future.
“Significant market investment in renewable energy has increasingly reduced the need for coal as a backstop in dry years when our hydro-lake levels are low. Huntly’s coal-fired units accounted for just 2.6 per cent of generation in 2015, compared to around 12 per cent ten years earlier.
“I’m confident that as demand rises, new generation will increasingly be renewable – such as geothermal and wind – as these are generally the lowest cost options.
“The Government is committed to our ambitious but achievable goal of 90 per cent renewable electricity generation by 2025. In 2015, renewable generation reached 81 per cent – the highest level in two decades and an increase of 16 per cent since 2008.
“In climate change terms, electricity generation makes up just six per cent of New Zealand’s total carbon emissions. This is one of the reasons the Government is committed to promoting our renewable advantage beyond electricity.
“As I announced in March, the Government has begun a process to set new, broader energy targets which will send a strong signal about what New Zealand’s energy future should look like.”