The environmental performance of the Electricity Commission 1 July 2005 - 30 June 2006

Commissioner's preface

Report Cover

This report assesses how well the Electricity Commission has contributed to environmental management in New Zealand in the year to June 2006.

Although the Commission's direct powers over energy production and consumption are limited, it must still play an important role in increasing the efficiency of our electricity system, and in the move to greater use of renewable resources.

Many of the Commission's environmental programmes discussed here were initiated during this reporting period, and it is too early to discuss their effectiveness. They will be evaluated in the next report, which will also address how the Commission is making trade-offs, e.g. when the requirement to keep costs and prices down might work against good environmental outcomes.

One particular area of interest is the thorny problem facing electricity retailers: how to sell more to customers, while at the same time selling less through promoting products that increase the efficiency with which electricity is used. We may look at how this conflict is resolved overseas, and how the Commission might resolve it here.

Report summary

Every year, the PCE must assess how well the Electricity Commission is meeting the Government's environmental goals. While the Commission is making some progress it is unclear how effective some its activities have been.

This is for two reasons: first, it is too early to assess many of its environmental programmes. And second, the electricity sector suffers from a lack of, or poor quality, data, especially on electricity consumption. Much of this is outside the Commission's responsibility, but it could address this in part by focusing on demand-side information.

In addition, to encourage investment in energy efficiency and demand-side management, more could be done to unlock the potential of smart meters and retail tariffs.

Recommendations

The report's six recommendations to the Commission cover:

  • quantifying hydro spill categories
  • establishing a publicly accessible database on tariffs to help assess whether tariffs incentivise efficiency and offer consumer choice
  • developing a set of minimum performance criteria for smart meters
  • developing a plan to roll out smart meters for all New Zealand consumers
  • involving lines companies in demand-side or distributed generation options as alternatives to new investments in lines
  • examining the grid investment test in relation to the governnment's environmental objectives.

  • (Download the report opposite to see the full recommendations).

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