This issue of Counsel is the second in a series of articles on climate change. In this issue, we review the Government’s Draft Energy Strategy to 2050. In particular we discuss the Resource Management Act implications of the Strategy with regard to the consenting of renewable energy projects.
Draft Energy Strategy released
On 2 February 2007, the fourth assessment report of the Intergovernmental Panel on Climate Change was released in Paris. It marks a growing scientific consensus as to the phenomena of global warming, the influence of humans on it and the pressing need for effective human response, nationally and globally. We now await the next chapter from the IPCC on recommended mitigation measures, to be released in May.
It was therefore timely that, on 11 December 2006, the Government released its draft New Zealand Energy Strategy to 2050, Powering Our Future – Towards a Sustainable Low Emissions Energy System ("the Draft Strategy"). Submissions on the Draft Strategy (and discussion papers) close on 30 March 2007.1
The Government’s vision is for "a reliable and resilient system delivering New Zealand low emissions energy". The Draft Strategy defines the role of government in providing "leadership to the energy sector to respond to long-term challenges of energy security and climate change".
Where there is a particular role for government leadership is through the consenting of major projects under the Resource Management Act 1991. The RMA is regularly identified as a significant barrier to investment in the energy sector, particularly because of its propensity to tie up major projects in extraordinarily lengthy, costly and uncertain consenting processes. The massive (and still unconcluded) hearing of TrustPower’s Wairau Valley Hydro Scheme is a recent case in point.
Significant amendments were made to the RMA in 2005. These were intended to better enable the Government to take a lead on national significance issues such as energy security and climate change. The reforms included a streamlined process for preparing National Policy Statements, sharpened obligations on councils to give effect to them, strengthened National Environmental Standards provisions, revamped "call-in" powers, and the introduction of new powers for government intervention in consenting processes.
The potential these sharpened tools offer for government leadership on energy security and climate change in RMA processes is significant.
The essence of the 2005 reforms was to empower the Government to lead RMA policy and consenting on matters of national significance. But, what is offered so far in the Draft Strategy suggests the Government has not yet been persuaded to take the plunge. That is something submissions should begin to test.
What is offered
In terms of what the Draft Strategy offers, there is significant "high-level" support for renewable energy technologies. Wind farm pictures grace the Draft Strategy documents and there are several other high level expressions of the Government’s preference for renewables, its vision for reliable and resilient "low emissions energy", and its acknowledgement of its role in leadership.
But, the rub is in just what the Draft Strategy says could be delivered by way of practical leadership measures for the RMA. The options broadly floated are:
- whole-of-Government submissions
- "National guidance" (through National Policy Statements or National Environmental Standards) "over the longer term"
- "a consolidated hearing process" for wind and/or geothermal generation projects.
The bland and open-ended way the Draft Strategy deals with possible RMA leadership initiatives suggests no clear government position has emerged. Stakeholder responses are called for, and the question to now consider is what message do you want to give to government on this issue through submissions?
The Draft Strategy indicates that the Government will support the RMA process by actively providing consent authorities with the information that government departments and agencies have about the various trade-offs involved.2
This is a reference to the ability in the RMA for a submission on a resource consent application to be made "for the Crown".
There is nothing new in this idea. The Government already makes submissions on renewable energy projects. A case in point is the Government’s submission on Meridian Energy’s proposed Project Hayes Wind Farm which received much media attention. It is common for the Ministry of Economic Development and the Energy Efficiency and Conservation Authority to make submissions on proposed wind farm projects highlighting the current policy support for wind energy, and the contribution it can make to reducing carbon emissions.
The whole-of-Government submission can be a useful initiative. Depending on the level of government commitment to the hearing process, it is a means of allowing RMA decision-makers to hear the Government speak with one voice. While certainly influential, however, a whole-of-Government submission is in the final analysis just one voice amongst many. They are not "national policy statements" and so cannot of themselves direct that any particular government policy on energy supply and climate change be followed. They simply become part of a mix in a process where any person has equal right to make a submission.
So, if this is the extent of government action in the RMA arena, do not expect any significant improvement in what is currently experienced in the consenting of major renewable energy projects.
National Policy Statements (NPS) and National Environmental Standards (NES) are the intended tools by which the Government can direct policy and regulatory approaches under the RMA. NPS are intended to express objectives and policies on matters of national significance and must be given effect to by regional and district plans. NES can have a similar role in overriding regional and district rules in setting national regulatory regimes for resource use. As to whether the Government would make use of these tools, however, the Draft Strategy is vague and non-committal. It suggests:
"Over the longer term, the role of national guidance under the RMA for renewable energy could be further considered."3
The documents acknowledge that NES and NPS are options to influence decision-making.4 They draw comparison between use of NPS and NES and on balance favour NES:
"An NES could be easier than an NPS to develop and implement, created using existing powers, and written to have an impact only on new fossil fuel generation plants. It could also be written so that controls were consistent between regional authorities."5
The documents note that an NPS on electricity generation could cover some or all of the following issues:
- a range of detailed issues associated with each generation type (such as water allocation, discharges to air and water, landscape impacts and noise)
- issues relating to the development of renewable electricity generation
- generic issues with the way that electricity generation is managed under the RMA.6
Beyond this, however, the documents say very little to indicate any present enthusiasm for use of either mechanism.
On the contrary, the Discussion Paper speculates that regulatory measures such as NPS and NES are likely to result in increased costs to generators. As to that, however, we observe that currently renewable energy developers incur substantial costs responding to wide-ranging submissions on their projects. Rather than increasing costs to generators, NPS and NES could provide a level of certainty and guidance as to whether a project should proceed or not and as to its governing conditions. This could be of value to the developer, local government, and potential submitters alike.
Overall, we say the Draft Strategy significantly undervalues the potential for NPS and NES (both separately and in combination) to make a very significant difference to how renewable energy generation projects are treated under the RMA. They would carry considerable weight in a resource consent hearing, and in the formation of policies in regional and district plans addressing the effects of renewable energy generation.
If leadership is about making a difference, then certainly NPS and NES are means for doing so. That is their intended RMA function, and the 2005 Amendment has sharpened them for this purpose. Following that amendment, infrastructure developers are right to anticipate their use.
There are of course risks with their use. Choices made for renewables will require trade-offs: as yet there is no technology for underground windfarms. But, we ask, isn’t it a role of government to lead on these policy choices if national significance issues are at stake, and aren’t NPS and NES intended as means of delivering that leadership on those choices?
"Consolidated consenting process"
Lastly, the Draft Strategy asks stakeholders to consider whether a consolidated consenting process for wind and/or geothermal generation projects would provide any benefit for renewable energy developers.
We think this is an unusual suggestion. The RMA allows for the "call in" of consent applications where these are "part of a proposal of national significance". During public seminars, the Minister of Energy explained that the Government could use these "call-in" powers as the means for hearing the applications together. However, we question whether the RMA’s call-in powers provide any mandate for the concept floated in the Draft Strategy, namely of the grouping for comparative analysis of a variety of different projects and proposals from throughout the country.
There is little explanation in the Draft Strategy of why this idea would be of any assistance. The Draft Strategy suggests that consolidating applications in this way would:
- ensure consenting processes are started and finished in time
- enable a pool of projects to be considered on a consistent basis, and
- on balance, likely increase the quantity of consented sites and establish de facto benchmarks for environmental performance.
But we question whether such a consolidated consenting process would benefit renewable energy developers:
- the RMA process is not about "picking winners", and all wind farms which meet the RMA tests of sustainable management of natural and physical resources should be consented and come forward to contribute to New Zealand’s renewable energy generation
- not all resource consent applications require the same level of preparation for a hearing. Considering a number of projects at the same hearing would no doubt slow them all down to the timetable of the most complicated and slowest project. All developers and their witnesses would be required to attend the hearing not only in relation to their own evidence, but to hear the evidence in relation to the other projects
- the RMA gives priority to completed applications in the order in which they are received. Each application has to be considered on its merits, with cumulative effects considered in relation to second and subsequent applications, where those effects are cumulative upon the effects of the first application. This very situation recently arose in relation to proposed wind farms north of Napier, where the Environment Court (considering together appeals in relation to two wind farms) was forced to decide whether consent should be granted for the wind farm whose application was lodged first, prior to considering the cumulative effects of the second wind farm.7 The consideration of cumulative effects complicates the consenting process, and encourages parties to ensure their application is lodged first
- projects located within the boundaries of different local authorities will have different rules and policies applying to them.
This is not to say the RMA’s "call-in" powers would not have a role as a government leadership instrument for major renewable energy applications. Where any individual proposal is of national significance, the option is there for the Government to have recourse to these powers. We say, however, that the potential effectiveness of call-in will be significantly limited in the absence of clear policy through an NPS.
Can we expect more?
New Zealand enjoys a significant natural advantage in facing the combined challenges of energy security and climate change: abundant renewable energy resources. But, the RMA presents a significant challenge to the timely unlocking of that potential, particularly for wind, geothermal and hydro resources. Policy is the driver of the RMA. NPS and NES are tools for delivering government policy and direction in a manner that will assist decision-makers, applicants, and submitters alike. But, so long as NPS and NES stay within the toolkit, we say the RMA will continue as a significant obstacle to the investment that will be needed to deliver on the Government’s vision.
The Draft Strategy begins the debate but, in terms of RMA leadership initiatives, offers very little as yet. The tools for making a significant difference to RMA processes are available. Can the Government be persuaded to use them?
This Counsel considers only limited aspects of the Draft Strategy, but we would welcome discussions with you on any aspect of the Draft Strategy.
Submissions on all documents can be made up until 5pm on 30 March 2007, and we would welcome the opportunity to assist you to prepare your submissions. Our resource management and energy specialists are here to help.