Frequently asked questions: Energy

The ETS favours electricity generators who use renewable sources of power, such as geothermal, wind, solar and hydro, over those who use fossil fuels such as oil and gas. The scheme’s first year has seen resource consents granted for 12 new renewable power stations, which will produce 1400MW of electricity – this is five times the average over the past decade. While it is too early to be able to determine the long-term impacts of the scheme on emeissions from the electricity sector, this is a positive indication.

The New Zealand ETS applies only to emissions generated in New Zealand. Therefore it makes companies responsible for domestic emissions from imported coal and does not apply to coal exported from New Zealand. Under the Kyoto Protocol, the country importing New Zealand coal, for example Japan, is responsible for the emissions.

Micro-generation from a renewable source such as hydro is not subject to the ETS because it does not result in greenhouse gas emissions. However, the price of emissions is reflected in the cost of micro-generation from coal, gas and geothermal energy.

Nuclear energy has been considered in the past as an option, but is not consistent with wider environmental goals, and high economic costs mean that nuclear energy is not an option for New Zealand. There are no plans to change legislation to provide for nuclear energy.

Cabinet has decided that Kyoto units generated through nuclear energy offset projects will not be permitted into our emissions unit registry and will not be acceptable for compliance with the New Zealand ETS.