2023 Offshore Renewable Energy Forum, New Plymouth
It seems like only yesterday that we launched the discussion document Enabling Investment in Offshore Renewable Energy, which is the key theme for this Forum.
Everyone in this room understands the enormous potential of offshore wind in Aotearoa New Zealand – and particularly this region.
Establishing a regime to pave the way for investment is a key priority of mine, so it’s great that we are making such good progress. In fact gathered in this room are a group of people who have helped make this exciting new possibility happen – thankyou – without your drive, passion and vision I would not have been able to drive things at my end.
This Government is building a resilient, affordable, secure and decarbonised energy system for our future – and we have a plan that we are delivering on, today is an example of that plan in action.
I want to commend Venture Taranaki and your partners for organising this event. It’s an immensely valuable opportunity to plan for the transformation of New Zealand’s energy sector, as we work towards a goal of 100% renewable electricity by 2030, and achieve our net-zero carbon target by 2050.
The energy transition will take a whole of society and whole of economy effort.
To meet the 2050 target, we need a transformed energy system, with much lower reliance on fossil fuels and increased reliance on renewable electricity and low-emissions fuels.
As the sector transitions over the next 30 years, we must ensure that:
- energy remains accessible and affordable to support the wellbeing of all New Zealanders
- energy supply is secure, resilient, and reliable throughout the transition and beyond
- energy systems support economic development and productivity growth aligned with the transition.
The events of recent weeks reinforce how critical it is to have secure and resilient energy systems in the face of extreme weather events. This is a key priority for me as Minister for both Energy & Resources and Infrastructure, as we recover from the impacts of Cyclone Gabrielle, and prepare for the inevitable high impact of climate change.
Our Government is developing the New Zealand Energy Strategy to coordinate the transition to a low emissions economy, address strategic challenges in the energy sector, and signal pathways away from fossil fuels.
It will involve full collaboration and engagement with Māori and close work with industry and consumers to reach a shared understanding of barriers and opportunities.
Taranaki plays a key role in this strategy, as one of the energy and resources hubs of New Zealand.
I want touch on three projects that are integral to the Energy Strategy:
- the New Zealand Battery Project
- the Hydrogen Roadmap
- and of course, a regulatory framework for offshore renewable energy
First, demand for electricity is expected to grow substantially, but until we address the dry year problem, we will continue to rely on fossil fuels in our electricity system. The dry year problem is when our hydro-electricity lakes run low for long periods of time and more fossil fuels are used instead to generate enough electricity.
A dry year solution would be a huge step towards our climate change goals and set us up for a secure and sustainably powered future for generations to come.
But it is not an easy problem to solve.
We need an extra 3 to 5 terawatt-hours of renewable energy that can be turned on as needed. That's about 10 per cent of our current annual consumption.
The NZ Battery Project was established in late 2020 to explore the feasibility of pumped hydro at Lake Onslow and other possible renewable energy solutions to the dry year problem.
To date, initial feasibility studies have been completed and an indicative business case has been developed. I expect to soon be able to announce Cabinet’s decision on whether studies should continue and how we can find the best path for developing a secure, decarbonised electricity system.
Green hydrogen offers a complementary tool alongside electrification for decarbonising hard-to-abate sectors. Already there are many local projects and consortia working on bringing hydrogen in New Zealand, including by local players in Taranaki. I was really encouraged to recently speak at the launch of the Hydrogen Consortia – involving serious players like Air New Zealand, Airbus, Fabrum and Hiringa, which will assess the barriers we need to overcome to make hydrogen aviation viable in New Zealand.
We are developing a Hydrogen Roadmap to consider the role hydrogen could play in the wider energy transition and to outline how the government can enable this sector. I look forward to sharing an interim Roadmap mid-year, and a final Roadmap alongside the Energy Strategy by the end of 2024.
Relevant to today’s forum, there are also some interesting developments overseas where we are seeing offshore renewables being the clean electricity input to the production of green hydrogen.
Of course, the main subject for this forum is the role of offshore renewable energy in our future energy system.
Offshore renewable energy could become a key asset to developing a highly renewable, sustainable, and efficient energy system that supports our overarching target of net-zero carbon. It also offers the prospect of regional economic development; technology development and innovation; and further enhancement of our energy security and resilience.
Around the globe, there is an extraordinary boom in offshore renewable energy; it’s well-established in many Northern European countries, and it is becoming more important in North America, parts of Asia, Australia, and now in New Zealand.
- China currently leads the global operational capacity with 28GW
- The UK has seen an increase over the past 12-months to produce 13.7GW, with an ambitious target to produce 50GW of offshore wind energy by 2030.
- The EU saw over 14.GW of installed offshore wind capacity in 2021 but is set to increase that figure to 60GW by 2030.
- The US wants to deploy 30GW of offshore floating wind turbines by 2030.
Closer to home, while Australia’s offshore wind project off Victoria’s Gippsland coast is looking to produce 2.2GW, New Zealand Infrastructure Commission, Te Waihanga, report that New Zealand’s least-windy sites have better wind potential than the windiest sites in Australia.
According to a 2019 study, in South Taranaki alone, we have an offshore wind resource of at least 7GW of potential capacity from fixed foundation wind turbines.
In fact when I met with the World Wind Energy Council in London last year – they described us as the Saudi Arabia of wind.
So unsurprisingly, we are an exciting new market for multiple developers and there is a strong interest from all stakeholders to understand the ‘rules of the game’, and to ensure that the offshore wind industry here develops in an ordered way that reflects our values.
- Iwi need to see their rights upheld as mana whenua and kaitiaki of their moana and whenua;
- Developers are looking for certainty and an informed understanding of the process before investing
- and government needs to develop a well-informed, feasible regulatory regime to benefit all of Aotearoa New Zealand.
Given the cost and complexity of offshore projects, their potential long-term role in the electricity network, and the impacts for local communities, it is important for the Government select developers who are suited to work here alongside mana whenua and their people, and to deliver new generation that is the best fit for our energy system and the environment.
That’s why this government committed to developing an offshore renewable regime in our first Emissions Reduction Plan.
It’s clear that existing RMA and EEZ legislation doesn’t provide the right tools to make good assessments about the who, where and what of offshore renewable development. I’m encouraging developers to work with us to design the regulatory regime, rather than getting ahead of the process.
We have moved quickly to develop proposals for a regulatory regime, as feasibility studies can take several years.
There are two stages of consultation.
Some of you were here in Taranaki late last year when I released the first phase of this work, which focuses on proposals to enable the feasibility phase of projects to occur in a managed way.
The coastal and marine areas around Aotearoa New Zealand are of significant cultural value to Māori, and as Tiriti partners, we are continuing to work with hapū and iwi to ensure Māori interests, rights, and participation are upheld throughout the feasibility phase and ongoing mahi.
The Government expects feasibility studies to look in detail at the potential environmental and cultural impacts of offshore renewables before developers are ready to propose commercial development – which may take several years and significant investment.
Developers want certainty about their rights before making investments – and rightly so. The discussion document focuses on a feasibility permit regime to enable this investment to occur. We want feedback on the permitting approach, whether aspects of feasibility work should be done collaboratively, and how any regulation should ensure that iwi/Māori are appropriately involved.
I encourage all those with a view to make a submission by the closing date on 14 April.
Officials are also now beginning to develop policy for the remainder of the regulatory regime; the broader regulatory settings to enable infrastructure to be constructed, operated, and decommissioned. I intend to release a second discussion paper in mid-2023 that covers six workstreams:
- Māori participation offshore renewable energy
- The design of the overall permitting regime, including permitting for construction and operation
- How a new regime complements existing consenting regimes and spatial planning
- How to enable transmission
- An approach to decommissioning, building on the lessons of previous resources regimes
- How to ensure everyone follows the kaupapa through appropriate enforcement
There remains a lot of mahi to complete the second discussion document, but I am committed to continuing this work at pace so that the offshore renewables sector can continue to develop.
This is an exciting time to be part of the Aotearoa New Zealand offshore renewable energy sector and I look forward to the kōrero to come and your whakaaro (thoughts/opinions) to help shape an exciting future. I am sure many of you will have already taken the opportunity to share your views on this mahi, and I thank you for making the effort to do so.
Thank you for the opportunity to kōrero here today at this Forum about the shared plans we have underway to enable our transition to 100% renewable electricity and a net-zero carbon future.
Nō reira, tēnā koutou, tēnā koutou, tēnā tātou katoa