Chapter 4: Feasibility Permits
Approximately 25 submitters commented on the proposals relating to feasibility permits.
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Feasibility permit allocation process
The discussion document sought feedback on whether, following an initial feasibility permit application round, there should only be set feasibility rounds, or whether the regime should allow for both feasibility permit rounds and/or an open-door process.
Many submitters supported in principle the proposed approach of having an initial round followed by the option to do subsequent rounds and open door, suggesting that it would provide necessary flexibility for an emerging industry. Submitters highlighted that there may not always be enough interest to hold regular rounds or that developers may not always be ready to participate in a round – resulting in subpar applications.
However, a significant proportion of submitters preferred rounds, as they said it would provide greater certainty and encourage competition in a fair way. Submitters suggested rounds could be run every 2 to 3 years and recommended that they should be scheduled in advance and spaced out. Submitters said a defined schedule, with a known capacity at different times, would support the industry to prepare good quality applications, and support supply chain development and investment.
Submitters supporting an open-door process said it would alleviate administrative burdens. Submitters also noted that it would reduce the risk of creating bottlenecks at the environmental consents stage when multiple projects seek consents at the same time. Submitters opposing an open-door process said it could create a reactive environment and result in an oversupply of permits.
The discussion document sought feedback on the appropriate size of developments in New Zealand and whether maximum sizes of projects should be prescribed in legislation or put forward by developers. MBIE indicated that projects of between 500MW and 1GW could be most appropriate for New Zealand’s energy system and, in spatial terms, a 1GW development might equate to approximately 150 to 250 square kilometres.
Most submitters that commented on the appropriate size of developments said that, in the near term, 500MW – 1GW projects would be most appropriate for New Zealand. Submitters agreed that this figure balances the energy generation needs of a relatively small country with the scale that might be needed for a project to be economic. However, a few submitters said larger projects may be “more efficient given the effort required to secure the critical resources needed in this part of the world”. Some submitters, including offshore renewable energy industry submitters, said the regime should not be concerned with the appropriate size of developments, as it will either be considered as part of the commercial decisions of the investments or in the environmental consent regimes.
Most submitters agreed with the proposal that any project’s size constraints would be best expressed in guidance and not prescribed in legislation. Several submitters suggested that a flexible approach was necessary in an emerging market where the most appropriate size is likely to change over time or between technologies. A few submitters supported a more prescriptive approach where the regulator provides more direction to manage interest in highly sought-after areas to ensure space is used efficiently. Those that preferred a more prescriptive approach had mixed views on the merits of prescribing a maximum or minimum generation capacity for a permit.
Submitters generally agreed that 250skm would be a reasonable geographic size to accommodate a 1GW development. However, submitters also suggested the assessment of reasonable size should consider efficient use of space, supply chain, grid impacts, cumulative impacts resulting in wake loss, technology, and the desired energy density/yield.