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Photo: RNZ / Nate McKinnon
Contact Energy says investment in carbon reduction should be focused on getting to 97 percent renewable energy, rather than fixating on what it will take to get to 100 percent.
The large power company said it was making significant progress to achieving net zero carbon by 2030, and doesn’t think New Zealand should focus its investment on how to get the last 2 or 3 percent.
Contact chief executive Mike Fuge said the current options available to reach 100 percent renewable were expensive, such as the government’s planned multibillion-dollar investment in the Lake Onslow battery storage lake development in Central Otago.
“I think what’s important is the industry is going to get to 97- to 98 percent renewable and it’s going to get there without subsidies, without taxpayers’ money,” Fuge said, adding it was more important to focus on the parts of the energy sector that will deliver big reductions.
“Whether it’s transportation, whether it’s process heat, whether it’s space heating in homes … because that’s where the significant carbon dioxide reductions will come from.
“At the moment we think the last 3 percent will be very expensive … and we think that money is better directed towards other things.”
He said clean energy innovations being developed in the United States and Europe would likely solve the problem of the last 3 percent, without the big investments required using today’s technologies.
Fuge said he was also keen to see the conclusion of negotiations to keep the Tiwai Point aluminium smelter open beyond next year.
“We’ve been reasonably happy with our engagement with Rio [Tinto],” Fuge said.
“They are committed to the future of the smelter. It is one of the lowest carbon-emitting smelters in the world. Our only frustration is perhaps with the pace and so the sooner the deal can get done, the better it is for the people of Southland and the better it is for the planet.”
Fuge said Contact was able to fund the rollout of its carbon reduction strategy from its existing capital structure.
The company announced its full-year result on Monday.
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