New Zealand (2012)

Degree of reliance on imported energy: 

<p>
Oil is sourced from 18 fields in the Taranaki region. The production of crude oil, natural gas liquids and condensate was down 7% on an energy-equivalent basis in 2009 compared with 2008, but up 149% compared to 2005. Oil production was underpinned by the rapid growth in production from the newest offshore fields, Pohokura, Tui, and Maari. Despite this growth, domestic oil production met only 49% of demand in 2009. Therefore, New Zealand imports a large volume of crude oil and petroleum products.<br />
<br />
All the gas used in New Zealand is domestically produced in the Taranaki region; and there are no facilities for importing LNG. New Zealand&rsquo;s largest gas field was the offshore Maui field, which is believed to be nearing depletion. This has prompted concern New Zealand&rsquo;s gas supply could be inadequate to meet future demand.</p>

Main sources of Energy: 

<p>
Total installed electricity capacity (2009): 9,486 MW<br />
Hydro-electric: 56.6%<br />
Thermal: 31.2%<br />
Geothermal: 6.7%<br />
Wind: 5.3%<br />
Biogas: ~0.3%<br />
<br />
Total primary energy supply (2009): 18,704 ktoe<br />
Oil and Products: 33%<br />
Natural gas: 18%<br />
Hydro: 11%<br />
Coal: 8%<br />
Geothermal: 24%<br />
Renewables: 6%<br />
<br />
In 2010, renewable primary energy was 311 PJ, up 13% from 2009 due to strong hydro inflows and an increase in geothermal and wind electricity generation and increase liquid biofuel production.<br />
Geothermal: 49%<br />
Hydro: 29%<br />
Bioenergy and solar: 20%<br />
Wind: 2%<br />
<br />
New Zealand is self-sufficient in all sources of energy supply apart from oil, and has modest energy resources, including more than 167 million barrels of oil, 56.0 billion cubic metres of natural gas, and 571 million tonnes of coal.<br />
<br />
New Zealand&rsquo;s energy self-sufficiency (indigenous production/primary energy supply) in 2009 was 89%, up from 87% in 2008 as growth in indigenous production outpaced growth in total primary energy supply. Since 2000, growth in New Zealand&rsquo;s primary energy supply has been modest, increasing at an average annual rate of 0.7%.<br />
<br />
In 2009, New Zealand generated 43,472 GWh of electricity. The country has plentiful renewable energy resources, hydropower in particular and produced 74% of electricity from renewable sources. This is one of the largest shares among OECD countries.<br />
Hydropower: 56%<br />
Thermal: 28%<br />
Other: 16%<br />
<br />
Most of New Zealand&rsquo;s hydropower is generated in the South Island, and all geothermal generation is on the North Island. Most of the remaining balance is generated on the North Island, using a combination of natural gas, coal, wind and landfill gas.<br />
<br />
New Zealand&rsquo;s final energy consumption was 12 504 ktoe, almost unchanged in 2009 compared with the previous year. The transport sector consumed 37% of final energy, the industry sector consumed 30%, and other sectors 33%. Final energy consumption was dominated by oil, accounting for 5818 ktoe (47%), followed by electricity and other (mainly heat) 4443 ktoe(36%), gas 1704 ktoe (14%), and coal 539 ktoe (4%).</p>

Country: 

New Zealand

Extent of the network: 

<p>
It is estimated that New Zealand&rsquo;s electrification rate was 87% up to 2006. The national transmission grid consists of 11,803 km of high-voltage lines. The majority of the network on both the North and the South Islands operates at 220 kV, with 110, 66 and 50 kV transmission lines connecting provincial towns and cities, and smaller power stations. The High-Voltage Direct Current (HVDC) Inter-Island system connects the grids of the North and South islands, via a 40 km undersea cable in the Cook Strait.</p>

Capacity concerns: 

<p>
With historically abundant hydropower resources, New Zealand is heavily dependent on electricity. Many homes and businesses in New Zealand have electric space and water heating. About 55% of New Zealand&rsquo;s electricity is from hydropower. However, the optimal sites for hydro-electric plants have largely been developed, and there is strong environmental opposition to developing the remaining sites. While some small additional hydro projects may be possible, major new hydropower projects are unlikely. New Zealand&rsquo;s heavy dependence on hydropower leaves its electricity supplies subject to fluctuations in precipitation. Dry years have historically resulted in electricity supply crises.<br />
<br />
Total transmission and distribution losses in 2009 were 7.6%, a relatively high figure for a developed nation. The national grid is highly loaded, constraints are frequent and it is increasingly difficult to take assets out of service for planned maintenance. The country needs to invest in long-term development and maintenance of the electricity transmission grid as a robust grid is necessary to facilitate the forecast growth in renewable electricity required to meet the government&rsquo;s 90% target in the New Zealand Energy Strategy 2011-2021. Furthermore, there is significant potential for efficiency gains in the form of reduced losses along the grid.</p>

Potential for Renewable Energy: 

<p>
<b>Solar energy</b><br />
Average insolation across both islands is approximately 4 kWh/m2/day. Both solar hot water and photovoltaic technologies have been explored in the country as potential resources, with 40 GWh/year of solar water heaters installed by 2001 in the country. Potential sites for solar energy include Auckland, Christchurch and Invercargill. Due to the nature of the resource, solar thermal is identified as being a more viable option for exploration for the country. As of 2006, 35,000 solar hot water systems had been installed in various domestic and public buildings in the country.<br />
<br />
<b>Wind energy</b><br />
Wind generation currently provided roughly 4% of New Zealand&#39;s electricity needs, with 407 GWh of electricity being generated by wind installations in June 2010. In recent years the introduction of wind power has gained momentum. New Zealand is ideally suited for wind generation with its long coastlines, where sea breezes and the lack of natural impediments result in consistent and relatively strong winds throughout the year. The Energy Efficiency and Conservation Authority (&quot;EECA&quot;) has produced a publication; <i>Review of New Zealand Wind Potential to 2015</i>, which identified 13 general areas where wind developments would be suitable. Total potential capacity for wind power installations in the country is estimated at 14,490 MW, with average wind speeds of 7.5-8 m/s observed in many locations.<br />
<br />
<b>Hydropower</b><br />
The last major resource assessment of New Zealand&#39;s hydro-electric potential was conducted in the 1990. The assessment identified over 200 schemes, with a potential of over 12,000 MW. Current developments include the addition of 46 MW to the Arnold Power Station in the West of the country, resource entitlements for which were granted in 2008. However, developments in the hydropower sector are expected to be limited, due to the environmental impacts of large hydropower projects on local flora and fauna, as well as on the rural population.<br />
<br />
<b>Biomass energy</b><br />
Conventional biomass energy, biofuels (in particular the derivation of aviation fuel from jatropha oil) and bioethanol production all hold potential in New Zealand, a country which sources 40% of its industrial energy requirement from biomass already. Legislation passed in 2008 stipulated the need for petrol and diesel products to be blended with at least 2.5% biofuel by 2013.<br />
<br />
<b>Geothermal energy</b><br />
The first geothermal plant in New Zealand was opened at Wairakei in 1958 as the second large-scale geothermal plant completed in the world, after Larderello, Italy. Geothermal energy now makes up approximately 10% of the country&#39;s electricity and has an installed capacity of nearly 0.8 GW at the beginning of 2011. High-temperature geothermal fields are mostly concentrated around the Taupo Volcanic Zone in the central North Island.&nbsp; An additional 583 MW of geothermal capacity is expected to be installed by 2012.</p>

Potential for Energy Efficiency: 

<p>
New Zealand has a relatively long tradition of promoting energy efficiency. It passed the Energy Efficiency and Conservation Act 2000, which lead to the economy&rsquo;s first energy efficiency strategy and the establishment of the Energy Efficiency and Conservation Authority (EECA) to spearhead the strategy&rsquo;s implementation.<br />
<br />
New Zealand&#39;s current energy use profile offers significant potential for reduction of energy use. The implementation of smart metering in some cities is an indication that energy companies are taking advantage of new demand-side management technologies.<br />
<br />
However, there are few energy service companies (ESCOs). ESCOs would be able to expand and build upon the Energy Efficiency and Conservation Authority&#39;s (EECA&rsquo;s) business sector programmes.<br />
<br />
About a quarter of New Zealand households are estimated to be in fuel poverty as New Zealand has a poor history of housing regulation and existing houses are often poorly insulated and rental properties are not required to have insulation or heating. Average indoor temperatures are cold by international standards. Fuel poverty is thought be a factor in the country&rsquo;s high rate of excess winter mortality and excess winter hospitalisations.<br />
<br />
New Zealand&rsquo;s final energy consumption was almost unchanged in 2008 at 12,420 ktoe, compared with the previous year. The transport sector consumed 38% of final energy, the industry sector consumed 29%, and other sectors 33%. Final energy consumption was dominated by oil, accounting for 5,943 ktoe (48%), followed by 4,409 ktoe (35%) for electricity and others (heat etc.), gas at 1,452 ktoe (12%) and coal at 616 ktoe (5%). Domestic transport is the main consumer of petroleum products, accounting for 79% of total oil consumption in 2008. Consumption of oil in the other sectors was shared between industrial (8%), agricultural, forestry and fishery (4%), and commercial and residential (3%), and non-energy (5%) sectors.</p>

Ownership: 

<p>
<b>Electricity market</b><br />
The New Zealand electricity market is a competitive market and is largely open. The market operates under the <i><b>Electricity Act Electricity Governance Regulations 2003 and the Electricity Governance Rules 2003</b></i>.<br />
<br />
As of October 2009, five distribution companies operate in the country, three state-owned enterprises (Genesis Energy (<a href="http://www.genesisenergy.co.nz">www.genesisenergy.co.nz</a>), Meridian Energy (<a href="http://www.meridianenergy.co.nz">www.meridianenergy.co.nz</a>) and Mighty River Power (<a href="http://www.mightyriverpower.co.nz">www.mightyriverpower.co.nz</a>), and two public companies (Contact Energy (<a href="http://www.contactenergy.co.nz">www.contactenergy.co.nz</a>) and TrustPower (<a href="http://www.trustpower.co.nz">www.trustpower.co.nz</a>)<br />
<br />
The national grid is wholly owned and operated by Transpower (<a href="http://www.transpower.co.nz">www.transpower.co.nz</a>), a state-owned company. Distribution is the responsibility of 28 separate distribution companies, each with a monopoly on their respective lines. Retail and wholesale of electricity occurs through an energy-only market exchange, with twelve retail companies operating in the country, the five generators included (leading to the coining of the term &ldquo;gentailers&rdquo; for market operations in the country).<br />
<br />
<b>Oil and gas market </b><br />
New Zealand&rsquo;s oil and gas exploration and production activities are largely privately owned and open to competition. New Zealand generally welcomes investment in oil and gas exploration by foreign firms. The coal mining industry in New Zealand is dominated by Solid Energy, a state-owned firm, although there are private operators as well.<br />
&nbsp;</p>

Structure / extent of competition: 

<p>
<b>Electricity market</b><br />
New Zealand&rsquo;s energy sector has been subject to major reforms since the mid-1980s, coinciding with the introduction of broader economic reforms. The broader reforms aimed to improve economic growth through efficient resource use, driven by clear price signals and, where possible, competitive markets. The vertically-integrated electricity sector was dismantled to separate the natural monopoly and competitive elements, the former government-owned and operated electricity monopoly was either corporatised or privatised, and the electricity market was deregulated.<br />
<br />
Currently, the generation and retail aspects of the market are open to competition, whereas transmission is the sole responsibility of the state-owned Transpower, whilst distribution is unbundled, but monopolistic for the involved companies. The <i><b>Electricity Authority</b></i> oversees the conduct of the electricity market, but does not regulate electricity prices.<br />
<br />
<b>Oil and gas market</b><br />
In 1988, the government removed price controls on petrol and took further steps to deregulate the oil industry. The government has never had ownership interests in petrol distribution and retailing, unlike its interests in the electricity and gas sectors. At the wholesale level, New Zealand is a highly concentrated market, with the four oil majors (BP, Caltex, ExxonMobil and Shell) maintaining an all-products market share of around 98% in 2008. At the retail level, there is more competition, with at least 15 branded networks and a rising number of unbranded sites. Collectively, these smaller networks account for over 15% of the retail market. As Shell and ExxonMobil were both seeking to sell their downstream assets in New Zealand in 2009, due to the small size of the New Zealand market, this provides a nationwide distribution network supplied with the lowest cost &ndash; something that has consistently hindered new entrants from entering the New Zealand market.<br />
<br />
Similar to the electricity market, the gas sector went through the broader economic reforms, and the vertically-integrated gas sector was dismantled to separate the natural monopoly and competitive elements, and deregulated.<br />
&nbsp;</p>

Existence of an energy framework and programmes to promote sustainable energy: 

<p>
The<i><b> Energy Efficiency and Conservation Act 2000</b></i> is the legislative basis for promoting energy efficiency, energy conservation and renewable energy in New Zealand. As a requirement of the Act, the Minister responsible for energy established a strategy for energy efficiency and conservation. This strategy must be reviewed, and updated as necessary, on a regular basis. In addition, the Act established the Energy Efficiency and Conservation Authority (EECA) as a stand-alone Crown entity, with a role to promote energy efficiency, energy conservation and renewable energy across all sectors of the economy. It empowers the preparation of regulations implementing product energy efficiency standards and labelling, as well as disclosure of information to compile statistics on energy efficiency, energy conservation and renewable energy.<br />
<br />
The <i><b>Electricity Industry Reform Act 1998</b></i> was the major piece of legislation used to achieve energy sector reforms. The Act effectively separated electricity lines from generation and retail where those activities were co-located, promoted competition in electricity generation and retail, and limited the barriers to new investment in generation from renewable energy sources. Amendments to restrictions on ownership of electricity generation by line companies were made in 2001 and 2004, followed in 2008 by further policy changes. These changes eased restrictions on the sale of generation output, narrowed the scope of ownership separation requirements, and amended the definition of renewables from &lsquo;new renewables&rsquo; to include traditional hydropower and geothermal electricity generation. The Act was revoked and its provisions have been incorporated into the <b><i>Electricity Industry Act 2010</i></b>.<br />
<br />
The <i><b>New Zealand Energy Strategy (NZES)</b></i> <i><b>2011-2021 </b></i>was announced by the Minister of Energy and Resources on 30 August 2011. The NZES sets the strategic direction for the energy sector and the role energy will play in the New Zealand economy. The government&rsquo;s goal is for New Zealand to make the most of its abundant energy potential through the environmentally responsible development and efficient use of the country&rsquo;s diverse energy resources. The four priority areas of the NZES are: diverse resource development; environmental responsibility; efficient use of energy; and secure and affordable energy. The NZES includes targets to generate 90% of electricity from renewable sources by 2025 and to achieve a 50% reduction in the GHG emissions from 1990 levels, assisted by the <i><b>New Zealand Emissions Trading Scheme</b></i> to drive investment into technologies that produce fewer emissions.&nbsp;&nbsp;<br />
<br />
A companion strategy, the <i><b>New Zealand Energy Efficiency and Conservation Strategy (NZEECS)</b></i> 2011-2016, was also announced on the same day. The NZEECS is prepared in accordance with the <i><b>Energy Efficiency and Conservation Act 2000</b></i> and outlines Government policies, objectives, and targets, and as required by the Act, will be in force for a period of five years. The NZEECS has a specific focus on&nbsp; the promotion of energy efficiency, energy conservation and renewable energy. The NZEECS sets out six objectives for six sectors, which will contribute to the overall New Zealand Energy Strategy 2011-2021 goal:</p>
<ul>
<li>
Transport: A more energy efficient transport system, with a greater diversity of fuels and alternative energy technologies.</li>
<li>
Business: Enhanced business growth and competitiveness from energy intensity improvements.</li>
<li>
Homes: Warm, dry and energy efficient homes with improved air quality to avoid ill-health and lost productivity.</li>
<li>
Products: Greater business and consumer uptake of energy efficient products.</li>
<li>
Electricity System: An efficient, renewable electricity system supporting New Zealand&rsquo;s global competitiveness.</li>
<li>
Public Sector: Greater value for money from the public sector through increased energy efficiency.</li>
<li>
It keeps the government target to achieve a rate of energy intensity improvement of 1.3% per annum.</li>
</ul>
<p>
<br />
The Government joined the International Renewable Energy Agency, effective 1 May 2011, to ensure to its works to remain alongside the top performing countries.&nbsp;<br />
&nbsp;<br />
New Zealand ratified the UN Framework Convention on Climate Change (UNFCCC) as an Annex I party on 16 September 1993, and the Kyoto Protocol on 19 December 2002. To assist in meeting the country&rsquo;s Kyoto targets, the government introduced a New Zealand Emissions Trading Scheme (NZ ETS), which commenced in July 2008.<br />
<br />
In February 2010, New Zealand announced that it was joining the Copenhagen Accord on climate change.<br />
<br />
The government has set two national targets for reducing greenhouse gas emissions: a medium-term responsibility target of a 10% to 20% reduction in emissions below 1990 levels by 2020 and a long-term target of a 50% reduction in net greenhouse gases from 1990 levels by 2050.</p>

Current energy debates or legislation: 

<p>
In November 2009, the government passed a Climate Change Response (Moderate Emissions Trading) Amendment Act (Emissions Trading Scheme) to revise the emissions trading scheme. The Act is to underpin the operation of a comprehensive emissions trading regime covering all sectors of the economy. Features of the amendment Act include:<br />
- Revised entry dates of 1 July 2010 for transport, energy and industrial sectors and 1 January 2015 for agriculture;<br />
- A transitional phase until 1 January 2013 with a 50 per cent obligation and NZD 25 fixed price option for the transport, energy and industrial sectors;<br />
- A production-based industry average approach to allocations for trade exposed, emissions intensive businesses;<br />
- A phase-out of industry support aligned with trading partners and the Government&#39;s long-term;<br />
-50 by 2050 emissions reduction target. (When associating New Zealand with the Copenhagen Accord, the government also reaffirmed its conditional 2020 emission reduction target range of 10-20 % below 1990 levels.);<br />
- Incentives for afforestation created by a domestic and international market for carbon credits; and<br />
- Enhanced transitional support for the fishing industry. - A Treaty of Waitangi clause (relating to arrangements with the indigenous Maori population).</p>

Major energy studies: 

<p>
As a country member of the Asia Pacific Economic Cooperation (APEC), New Zealand is an active member of the Asia Pacific Energy Research Centre (APERC).&nbsp; The APERC was established in 1996 in Tokyo, as an affiliate of the Institute of Energy Economics, Japan (IEEJ) as the government of Japan agreed to finance the Centre.&nbsp; The primary objective of the APERC is to foster understanding amongst APEC economies of global, regional and domestic energy demand and supply trends, energy infrastructure development, energy regulatory reform, and related policy issues. APERC advocates rational energy policy formulation, and enhances capacity building in energy research in the region, following the APEC&#39;s Non-binding Energy Policy Principles for furthering energy security, economic growth, and environmental quality.</p>

Role of government: 

<p>
Energy policies and strategies are developed by the <i><b>Ministry of Economic Development </b></i>(<i><b>MED</b></i>, <a href="http://www.med.govt.nz">www.med.govt.nz</a>), which is also the lead department advising the government on energy efficiency and the use of renewable resources; Crown Minerals, a division of MED, is responsible for the management of New Zealand&rsquo;s mineral resources. The <i><b>Ministry for the Environment</b></i> (<i><b>MfE</b></i>, <a href="http://www.mfe.govt.nz">www.mfe.govt.nz</a>) is responsible for addressing the effect of energy use on the environment.&nbsp; The Minister of Energy and Resources is accountable for the overall performance of the NZEECS.</p>

Government agencies in sustainable energy: 

<p>
The <i><b>Energy Efficiency and Conservation Authority</b></i> (<b>EECA</b>, www.eeca.govt.nz/) is a Crown entity, established under the Energy Efficiency and Conservation Act 2000, and subject to the Crown Entities Act 2004. The EECA is governed by a Chairman and seven Board members, who report to the Minister of Energy and Resources. The EECA is the main agency responsible for helping deliver the government&rsquo;s energy efficiency agenda. Its function is to encourage, promote and support energy efficiency, energy conservation and the use of renewable energy sources in New Zealand.<br />
<br />
The <i><b>Ministry of Transport</b></i> and the <i><b>New Zealand Transportation Agency</b></i> are responsible for most transport-related energy efficiency initiatives, with the exception of vehicle fuel consumption labels. The EECA has a Letter of Understanding with the New Zealand Transportation Agency regarding the management of fuel consumption information.<br />
<br />
The <i><b>National Energy Research Institute </b></i><b>(NERI</b>, www.neri.org.nz/) is responsible for identifying new opportunities and conducting research into energy issues in New Zealand. The institute currently has a network of 155 member research institutions, and seeks to facilitate co-operation and foster a singularity of purpose amongst them, through the production of policy/literature reviews, and the organisation of research programs.<br />
<br />
A new <i><b>Ministry of Science and Innovation </b></i><b>(MSI, </b>www.msi.govt.nz/) was established through the merger of the existing <i><b>Foundation for Research, Science and Technology</b></i> and the <i><b>Ministry of Research, Science and Technology</b></i>. It is part of a broader government effort to boost the research, science and technology sector&rsquo;s contribution to economic growth. The MSI will have two new investment boards&mdash;a Science Board and an Innovation Board. The former will deal with funding allocations for scientific research, while the latter will deal with funding allocations for business-facing technology schemes. It was established on 1 February 2011 as the lead government agency driving New Zealand&rsquo;s science and innovation sector and has been assigned the roles including:</p>
<ul>
<li>
advising the Government on New Zealand&rsquo;s science and innovation system;</li>
<li>
overseeing&nbsp;science and innovation&nbsp;investment and supporting infrastructure;</li>
<li>
fostering commercialisation, enhancing productivity and achieving wider benefits for New Zealand through the application of research results; and</li>
<li>
monitoring the financial and non-financial performance of New Zealand&rsquo;s eight Crown research institutes.</li>
</ul>
<p>
<br />
A number of non-governmental organisations, including membership-based professional and charitable groups, are also involved in the promotion and research into and of energy issues in New Zealand, including the <i><b>Sustainable Energy Forum</b></i>, the <i><b>Energy Management Association</b></i>, the <i><b>National Institute of Water and Atmospheric Research</b></i> (a Crown research company), the <i><b>Wind and Bioenergy Associations of New Zealand</b></i>, and the <i><b>Australian and New Zealand Solar Energy Society</b></i>.<br />
&nbsp;</p>

Energy planning procedures: 

<p>
The Government published the non-statutory <i><b>New Zealand Energy Strategy</b></i> (<i><b>NZES</b></i>) in 2007. This strategy was its primary statement of energy policy, setting the direction for energy supply as well as demand. As part of the 2007 NZES, the Government has set a target for 90% of electricity to be generated from renewable sources by 2025. .The revised NZES for 2011-2021 was announced in 2011, and retained the 90% target. It focuses on diverse resource development; environmental responsibility; efficient use of energy; and secure and affordable energy.&nbsp;<br />
<br />
<i><b>New Zealand Energy Efficiency and Conservation Strategy (NZEECS)</b></i><br />
The NZEECS is the main program for promoting energy efficiency. It was a requirement of the Energy Efficiency and Conservation Act 2000, and was released in October 2007. The NZEECS replaced the inaugural Strategy, released in 2001. The Strategy is a companion document to the <i><b>New Zealand Energy Strategy </b></i>(<i><b>NZES</b></i>) and sets out the government&rsquo;s policies and actions on energy efficiency, conservation and renewable energy. The strategy also assigns responsibility for the delivery of each action to a central or local government agency.<br />
<br />
The programs in the NZEECS are expected to support the attainment of the following goals:</p>
<ul>
<li>
Savings of 30 petajoules (PJ) in non-transport energy by 2025,</li>
<li>
9.5 PJ of additional direct use RE per year by 2025,</li>
<li>
Savings of 20 PJ in the transport sector by 2015,</li>
<li>
90% of total electricity generation derived from renewable sources by 2025.</li>
</ul>
<p>
<br />
In addition, the Government has agreed in principle, under the NZEECS, to halve the 2007 per capita greenhouse gas emissions in the transport sector. The NZEECS was revised in 2011 for 2011-2016 which sets out six objectives for six sectors to contribute to the overall New Zealand Energy Strategy 2011-2021 goal. It keeps the government target to achieve a rate of energy intensity improvement of 1.3% per annum.<br />
<br />
It is the Minister&rsquo;s intention that both new strategies &ldquo;will focus on the security of supply, affordability, and environmental responsibility, with the overriding goal of maximising economic growth&rdquo;.&nbsp;<br />
&nbsp;<br />
In 2006, the <i><b>Ministry of Research, Science and Technology</b></i>, in consultation with stakeholders, prepared the <i><b>Energy Research Roadmap</b></i>, to identify the capabilities required to develop sustainable technologies and practices. The report found that New Zealand needed to:</p>
<ul>
<li>
lead research to reflect its unique energy resources and uses,</li>
<li>
adapt and adopt, with improved efficiency, technologies and processes developed overseas to suit its energy situation,</li>
<li>
recognise innovations that may provide commercial opportunities for use domestically and abroad.</li>
</ul>
<p>
<br />
In April 2009, the Minister of Energy and Resources initiated a <i><b>Ministerial Review of Electricity Market Performance</b></i> which examined market design, regulation and governance. A suite of changes to New Zealand&rsquo;s electricity system were announced in December 2009, followed by the <i><b>Electricity Industry Act 2010</b></i>, which came into force in October 2010. The changes encompass:</p>
<ul>
<li>
measures to improve competition, including some ownership rearrangement of generation assets held by government-owned companies,</li>
<li>
steps to improve security of supply, particularly for years when hydro-electric generation&nbsp; is low,</li>
<li>
abolishing the Electricity Commission and replacing it with an Electricity Authority with fewer objectives and functions.</li>
</ul>
<p>
<br />
The Act further eases requirements on the type of generation companies can build, in order to increase competition in the electricity market.<br />
<br />
The <i><b>National Policy Statement for Renewable Electricity Generation 2011</b></i> sets out the objective and policies for renewable electricity generation under the Resource Management Act 1991. It came into effect on 13 May 2011. This NPS will drive a consistent approach to planning for renewable electricity generation in New Zealand. It gives clear government direction on the benefits of renewable electricity generation and requires all councils to make provision for it in their plans.<br />
The NPS REG works alongside other government initiatives as part of New Zealand&#39;s wider response to tackling climate change.<br />
<br />
The UNEP&rsquo;s proposed project &ldquo;<i><b>PAS Low Carbon-Energy Islands - Accelerating the Use of Energy Efficient and Renewable Energy Technologies in Tuvalu, Niue and Nauru</b></i>&rdquo;, under the umbrella project &ldquo;<i><b>GEF Pacific Alliance for Sustainability</b></i>&rdquo; aims to remove major barriers to the widespread and cost-effective use of grid-based decentralized embedded RE supply and to the introduction of energy conservation measures.&nbsp; The project is expected to be approved in December 2012 and to run for three years.<br />
<br />
The overall goal of the project is the &lsquo;<i>Reduction of the participating countries&rsquo; greenhouse gas emissions by reducing fossil fuels use through renewable energy and energy conservatio</i>n&rsquo;. The project&rsquo;s goal will be achieved by outcomes and activities geared towards the objective which is the &lsquo;<i>Removal of major barriers to the widespread and cost-effective use of grid-based renewable energy supply and to the introduction of energy conservation measures</i>&rsquo;. To achieve this objective, the project will build structures (i.e.; policy, institutional, market, and financing), knowledge, skills, awareness and understanding among policy makers, stakeholders and the general public in the three countries and beyond on the importance and benefits of establishing sustainable low carbon energy systems. The project will be concentrating on decentralized embedded renewable energy systems financed and maintained by the private sector (businesses and households) and also, private-public sector partnerships. This is in contrast to the current approach of focusing on utility-scale centralized RE (mostly PV) systems.<br />
&nbsp;</p>

Energy regulator Date of creation: 

<p>
In September 2003, following the inability of the industry to establish self-governance, the government established an <i><b>Electricity Commission</b></i> (<b>EC</b>) to take responsibility for governance and regulation of the New Zealand electricity industry under the <i><b>Electricity Act 1992</b></i>. The EC was disestablished on 31 October 2010; and an <i><b>Electricity Authority (EA</b></i>, www.ea.govt.nz/) was established on 1 November 2010 under the <i><b>Electricity Industry Act 2010</b></i>, which followed the Ministerial Review of Electricity Market Performance conducted by the Electricity Technical Advisory Group in 2009. The <i><b>Electricity Authority</b></i> is an independent Crown entity responsible to promote competition in, reliable supply by, and the efficient operation of, the electricity industry for the long-term benefit of consumers, as specified by the <b>Electricity Industry Act 2010</b>.<br />
<br />
A gas sector regulatory body, <i><b>Gas Industry Co. (GIC)</b></i>, was established in December 2004, following the request by gas industry participants for industry self-regulation backed up by the force of law in 2003, given the litigious nature of the industry and the risk of hold-outs.<br />
&nbsp;</p>

Degree of independence: 

<p>
The <b><i>Electricity Authority</i></b> <i><b>(EA)</b></i> is governed by a Board comprising between five and seven members. The Board decides amendments to the <i><b>Electricity Industry Participation Code 2010</b></i>. The EA has four Board committees with delegated responsibilities for specific areas of activity &ndash; the Audit and Finance Committee, the Compliance Committee, the System Operations Committee, and the Undesirable Trading Situation (UTS) Committee. Five business groups, each headed by a General Manager, report to the Chief Executive. To deliver its functions the EA employs a small professional team of industry specialists in a range of disciplines, including economics, engineering, law, operations research and technology. Where necessary, external expert advice is contracted on a project-by-project basis.<br />
<br />
The EA also works closely with other Government agencies and departments on various aspects of its work programme. These include the <a href="http://www.comcom.govt.nz/"><i><b>Commerce Commission</b></i></a>, <a href="http://www.eeca.govt.nz/"><i><b>Energy Efficiency and Conservation Authority (EECA)</b></i></a>, <a href="http://www.consumeraffairs.govt.nz/"><i><b>Ministry for Consumer Affairs</b></i></a>, <a href="http://www.med.govt.nz/"><i><b>Ministry of Economic Development</b></i></a>, and the <a href="http://www.mfe.govt.nz/"><i><b>Ministry for the Environment</b></i></a>.<br />
<br />
Although independent, the EA is required to have regard to Government Policy Statements presented in Parliament by the Minister of Energy and Resources (Minister).&nbsp;The EA is free to adopt its own approach to matters covered by any such Statements, but must pursue the statutory objective set for it in the <i><b>Electricity Industry Act 2010</b></i>.<br />
<br />
<i><b>Gas Industry Co. (GIC</b></i>, http://www.gasindustry.co.nz/) was established to seek to combine the benefits of industry self-governance with Ministerial oversight to ensure delivery of public policy objectives. The GIC (as a private industry body) was provided access to the Government&rsquo;s coercive legal powers in exchange for a level of accountability and control. The government believed that it was efficient to let the industry get on with the necessary regulation without the government having to put the resource into (or to take the risk of) designing gas governance regulations and rules itself. As such, both government and industry are intended to be like-minded partners working for the development of a competitive, well functioning gas market.<br />
&nbsp;</p>

Regulatory framework for sustainable energy: 

<p>
The<i><b> Electricity Industry Act 2010</b></i> provides a framework for the regulation of the electricity industry. The Act modifies the governance arrangements in the electricity industry, replacing parts of the <i><b>Electricity Act 1992</b></i>.&nbsp;The Act disestablishes the Electricity Commission and replaces it with an Electricity Authority, allows lines businesses back into retailing, incorporates the provisions of the Electricity (Continuance of Supply) Amendment Bill (as reported by the Commerce Committee in 2009), and reconfigures some assets of the three State-owned generators (Meridian Energy, Mighty River Power and Genesis Energy). The Act incorporates provisions relating to ownership separation of electricity distribution from supply (retail and generation) businesses from the now revoked <b><i>Electricity Industry Reform Act 1998</i></b>.<br />
<br />
The <i><b>Electricity Act 1992</b></i> sets out the regulatory framework for electricity. It provides for the regulation of the supply of electricity and the electricity industry, and for regulation and control of electrical workers. The Act&rsquo;s coverage includes powers and duties of electricity operators and other owners of electricity works, electrical codes of practice, registration and licensing of electrical workers, restriction on electrical work and governance of the electricity industry. It also provides for the regulation of fittings and electrical appliances that are, or may be, exported pursuant to an international trade instrument.<br />
<br />
The Electricity Regulations 1997 was revoked on the 1st April 2010 in favour of the <b><i>Electricity (Safety) Regulations</i></b><i><b> 2010</b></i>, after a brief amendment in 2002. These sets of regulations serve to guarantee the quality of electrical service in the country, including governing the quality of electrical installations.<br />
<br />
No specific regulatory mechanisms exist to promote sustainable energy, although the government has released policy papers stating its importance, including a Discussion Paper outlining several government incentives that could be purposed to promote sustainable energy.<br />
<br />
The <i><b>Government Policy Statements on Gas Governance</b></i> October 2004 to clearly establish the objectives and outcomes of the <i><b>Gas Industry Company</b></i> (<b>GIC</b>), the approved industry body and coregulator of the gas market. The statement provides industry with a clearer understanding of the respective roles of each party, government and the GIC, while retaining the preference for light-handed regulation which is maintained by regular reporting to the minister on progress made towards meeting the government&#39;s objectives. There are also several other regulations relating to the gas sector including; Gas (Information Disclosure) Regulation 1997, Gas (Downstream Reconciliation) Rules 2008, Gas (Switching Arrangements) Rules 2008, Gas Governance (Compliance) Regulations 2008, Gas Governance (Critical Contingency Management) Regulations 2008, Gas (Processing Facilities Information Disclosure) Rules 2008 and Gas (Levy of Industry Participants) Regulations 2011.</p>

Regulatory roles: 

<p>
The core functions of the <i><b>Electricity Authority</b></i> are to:</p>
<ul>
<li>
make and administer the <i><b>Electricity Industry Participation Code 2010</b></i> governing the New Zealand electricity market;</li>
<li>
undertake market-facilitation measures (such as providing education, guidelines, information, and model arrangements) and monitor the operation and effectiveness of market- facilitation measures;</li>
<li>
monitor and enforce compliance with the <i><b>Electricity Industry Participation Code 2010</b></i>, various regulations, and the <i><b>Electricity Industry Act 2010</b></i>;</li>
<li>
proactively monitor the performance of the electricity industry in regard to competition, reliable supply and efficient operation; and</li>
<li>
contract service providers to operate the New Zealand electricity system and market in accordance with the <i><b>Electricity Industry Participation Code 2010</b></i>.</li>
</ul>
<p>
<br />
Since 2004, New Zealand&rsquo;s gas sector has been co-regulated by the government and the <i><b>Gas Industry Co.</b></i> as the industry body under the <b>Government Policy Statements on Gas Governance</b>. The <i><b>Gas Industry Co.</b></i> is charged with making recommendations to the Minister of Energy and Resources to meet the Government&#39;s objectives for the gas sector as detailed in the Government Policy Statement on Gas Governance 2008. Recommendations are made regarding: the operation and governance of gas markets; access to infrastructure; and consumer outcomes.</p>

Role of government department in energy regulation: 

<p>
The Ministry of Economic Development is active in the field, both as the parent organisation of the EA (as the Minister for Energy is also the Minister responsible for Economic Development) and as the parent organisation of Energy Safety (ES), whose task is to monitor public safety in the supply and use of electricity and gas.</p>

Regulatory barriers: 

<p>
The uptake and use of renewable energy in New Zealand is progressing well. Financial incentives for renewable energy are already being promoted by the EECA, but if Feed-In Tariffs (FITs), were introduced this might promote further development.&nbsp; Renewable energy systems are currently, also, regulated on the same terms as conventional electricity generation systems. The establishment of specific regulatory frameworks for renewable energy might further promote and support their uptake.</p>

References: 

APERC (2011): APEC Energy Overview 2011. Available at <a href="http://eneken.ieej.or.jp/data/4432.pdf">http://eneken.ieej.or.jp/data/44... [Accessed 14th September 2013]<br />
<br />
IEA Country Statistics (2011). Available at:&nbsp;<a href="http://www.iea.org/countries/membercountries/newzealand/statistics/">htt... [Accessed 14th September 2013]<br />
<br />
MED (2011) Energy Information, New Zealand Ministry of Economic Development. Available at: <a href="http://www.med.govt.nz/sectors-industries/energy/energy-modelling">http:... 14th September 2013]<br />
<br />
IEA (2010) Energy Policies of IEA Countries - New Zealand, 2010 review, Executive Summary. Available at: <a href="http://www.iea.org/Textbase/npsum/NewZealand2010SUM.pdf">http://www.iea.... [Accessed 14th September 2013]<br />
<br />
IEA (2010) Oil &amp; Gas Security: Emergency Response of IEA Countries - New Zealand. Available at: <a href="http://www.iea.org/publications/freepublications/publication/nz_2010.pdf... 14th September 2013]<br />
<br />
REN21 (2011) Renewable 2011 Global Status Report, Paris: REN21 Secretariat. Available at:&nbsp;<a href="http://germanwatch.org/klima/gsr2011.pdf">http://germanwatch.org/klima/g... [Accessed 14th September 2013]<br />
<br />
Asia Pacific Energy Research Centre (APERC) (2011) APEC Energy Overview 2010. Available at: <a href="http://publications.apec.org/publication-detail.php?pub_id=1147">http://... 14th September 2013]<br />
<br />
Howden-Chapman, P., et al. (2011) Tackling cold housing and fuel poverty in New Zealand: A review of policies, research, and health impacts, Energy Policy. Available at: <a href="http://dx.doi.org/10.1016/j.enpol.2011.09.044">http://dx.doi.org/10.1016... [Accessed 14th September 2013]<br />
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MED (2011) Electricity, New Zealand Ministry of Economic Development. Available at: <a href="http://www.med.govt.nz/sectors-industries/energy/electricity">http://www... 14th September 2013]<br />
<br />
MED (2011) New Zealand&#39;s Energy Strategies, New Zealand Ministry of Economic Development. Available at: <a href="http://www.med.govt.nz/sectors-industries/energy/strategies">http://www.... 14th September 2013]<br />
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MED (2011) Renewable Energy, New Zealand Ministry of Economic Development. Available at: <a href="http://www.med.govt.nz/sectors-industries/energy/energy-modelling/data/r... 14th September 2013]<br />
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New Zealand Ministry of Science and Innovation. <a href="http://www.msi.govt.nz">www.msi.govt.nz</a>&nbsp;<br />
<br />
GEF (2012): PAS Low Carbon-Energy Islands - Accelerating the Use of Energy Efficient and Renewable Energy Technologies in Tuvalu, Niue and Nauru. Available at: <a href="http://www.thegef.org/gef/sites/thegef.org/files/documents/document/008-... [Accessed 14th September 2013]<br />
<br />
New Zealand Electricity Authority. <a href="http://www.ea.govt.nz">www.ea.govt.nz</a>&nbsp;<br />
<br />
MED (2011) Natural Gas, New Zealand Ministry of Economic Development. Available at: <a href="http://www.med.govt.nz/sectors-industries/energy/energy-modelling/data/g... 14th September 2013]