Implementing a ban on new fossil-fuel baseload electricity generation discussion documentLast updated: November 2, 2023
Implementing a ban on new fossil-fuel baseload electricity generation discussion document
Published: November 2, 2023
Submitting To: Ministry of Business, Innovation and Employment (MBIE)
Issue for Business: This consultation document discusses a proposed ban on new thermal baseload electricity generation. We oppose this proposal due to four main reasons. Each is detailed further in the submission attached. 1.) No developer is exploring to, nor planning to, construct new thermal baseload generation. This is likely to continue due to technology improvements that promises lower LCOE. Renewable forms of technology are already far cheaper and superior. 2.) However, despite the low probability of new thermal baseload, there a several scenarios that could justify new baseload. First, for an specified reason, renewables could fail to deliver sufficient baseload generation, thereby compromising security of supply, thus warranting new baseload. Second, new plant might be necessary to replace aging ones that could still play a role in the system for unspecified and unknown reasons. Replacing existing plant with modern and more energy efficient units capable of operating as baseload if necessary during dry years could be beneficial. Lastly, participants may identify opportunities for new co-generation to enhance the efficiency of their industrial process. 3.) The ban is unnecessary within a system that is already capped under the Emissions Trading Scheme. The ETS presents a large hurdle for any form of carbon-intensive generation, without the direct intervention of regulatory bans and ministerial interference. If the system necessitates new thermal baseload, despite higher carbon prices, it merely signifies that this plant and its emissions hold a higher value relative to other emissions (underscoring the existence of more cost-effective abatements elsewhere in the economy. A ban would free units to less valued ends, while have implications on energy affordability and security.