A green advocacy group slams the government’s liquefied natural gas (LNG) import plan, arguing that solar panels and heat-pump hot water systems would deliver far better value for money.
The New Zealand Green Building Council highlighted in a Q&A report that the LNG plan would cost more than a grants system to equip new builds with far more energy-efficient water heating and rooftop solar.
Green Building Council chief executive Andrew Eagles stated that his organisation’s plan could save billions in generation costs for both the government and individual households.
“We can get over 15 years, about $6 billion worth of savings for Kiwi households,” Eagles said.
He warned that the LNG terminal would create a “single point of failure” and tie domestic energy costs to volatile international markets, exposing New Zealand to extreme spikes like those after Russia’s invasion of Ukraine.
Eagles rejected the claim that LNG would help smooth out peaks in electricity prices.
“When we hook up to an international energy price, what other countries have seen is that it dramatically increases those energy prices because you’re competing with a global market.”
“There’s potential for it to help in a dry year problem, but what the Cabinet papers show, what’s becoming more apparent, is that we’re going to be using it more and more from 2028, 2029 as our domestic gas runs out, and we’ve got other solutions.”.
Eagles estimated the Green Building Council plan would cost $2.5 billion upfront but yield long-term savings, unlike the LNG plan with its lower initial outlay yet ongoing expenses for terminal maintenance and fuel purchases.
The government’s LNG plan was recently announced in response to domestic electricity price spikes that have hammered businesses and driven up household bills.
It claims the LNG import facility in Taranaki will save New Zealanders around $265 million annually.
Energy Minister Simon Watts said a contract is expected to be signed by mid-year, with construction completing next year or early 2028.
“New Zealand is experiencing a renewable electricity boom, but a rapidly declining gas supply has left our electricity sector exposed during dry years, when our hydro lakes run low.”
“The result is greater reliance on coal and diesel, and ultimately higher electricity prices, putting more financial pressure on families and making businesses less competitive.”
The government noted that renewable projects were considered but not pursued due to factors like lengthy construction timelines, challenges in reliably generating power at scale, and impacts on electricity market incentives.
“LNG was the preferred option after consideration and analysis of the options. LNG was found to lower electricity prices at relatively low capital cost and deliver spillover benefits.”