Impacts on security of supply

Submitters felt that implementing the ban could have unintended impacts for security of supply. 

New Zealand depends on hydroelectric generation for a large portion of its electricity supply, meaning security of supply is susceptible to ‘dry year’ risks.

An exemption for fossil-fuel non-baseload generation plants to operate in a baseload capacity in a security of supply event was seen as necessary.

Some submitters flet that banning construction of fossil fuel baseload generation would unnecessarily limit flexibility for the market to respond.

However, submitters generally acknowledged that an exemption for construction of new fossil-fuel baseload generation plants in security of supply of events was not practical because of the long-term planning and investment required.

One submitter felt that the ban would significantly disincentivise fossil gas field development. Some submitters noted that given the low likelihood of developing new baseload fossil-fuel plants the impact on fossil gas fuel development was unlikely to be significant.