Luxon said New Zealand was experiencing a “renewable energy boom” but swiftly declining gas supply. There was no good reason for New Zealand to be in this position, he said.
Prime Minister Christopher Luxon and Energy Minister Simon Watts make the announcement about the plan for a liquified natural gas terminal today. Photo / Mark Mitchell
As gas supplies dwindled, New Zealand had increased reliance on diesel and coal, he said.
Following the closure of stage one of the procurement process for one of these facilities last year, Watts had approved a shortlist of accelerated-delivery solution submissions.
Speaking at today’s post-Cabinet conference, Watts said the new LNG import terminal would mean fewer “winter bill shocks” for Kiwis.
He stressed that LNG would not be a replacement for renewable energy.
“LNG will not get in the way of that [renewable energy] goal,” he said.
The Government is aiming to have a contract finalised by the middle of this year.
Its factsheet said it was too early at this stage to confirm the location of the facility but the shortlisted submissions are all in the Taranaki region.
Watts said the estimated cost for the build was $1 billion. The plant would be in play by winter next year, he said.
A question about what the cost would be to Kiwi households was not answered directly, but Watts insisted the net benefit to households was $50.
Watts and the Prime Minister did not provide a direct figure but implied that is because the matter is commercially sensitive.
Watts stopped short of guaranteeing Kiwi power bills would be lower next winter but said advice from officials indicated “a downward pressure” on power prices.
The emissions profile would go down under increased importations of gas, Watts said.
“This is a strategic energy security asset for New Zealand.”
Luxon said this didn’t preclude expansion in other areas like batteries and renewable projects, “but we need to get rid of the dry-year risk. If we can de-risk that … that’s the thing that puts a downward pressure on prices”.
Asked why they did not opt for a cheaper solution like stockpiling more coal, Watts said the Huntly power station was at full capacity for coal and New Zealand also needed more options.
Luxon has returned to Parliament after a busy few weeks addressing the aftermath of the deadly Mount Maunganui landslides and attending Waitangi.
Luxon was not at Waitangi for the national day of celebration itself, but attended a parliamentarians’ pōwhiri, where he faced intense heckling during his speech.
Earlier this morning, Luxon addressed a racist social media post by US President Donald Trump.
Trump shared a video to social media portraying Michelle and Barack Obama as apes. He swiftly removed the post but not before it prompted bipartisan backlash in the States.
Luxon told TVNZ’s Breakfast he thought Trump should recognise his mistake.
Asked if an apology was in order for the post, Luxon said: “Look, yeah, I think he should.”
At Monday’s press conference, Luxon stood by his call for Trump to apologise, saying: “It was racist, it is a trope that was understood.“
Julia Gabel is a Wellington-based political reporter. She joined the Herald in 2020 and has most recently focused on data journalism.