New Zealand: NPS reduces RMA barriers to renewable electricity generation

The National Policy Statement (NPS) for Renewable Electricity Generation takes effect on 13 May 2011 but gives territorial authorities a further 24 months to modify their planning documents.

Despite this time lag, the Government has sent a strong message to decision-makers that it will be keeping their feet to the fire to ensure traction is achieved in intended planning outcomes within the next five years.

This Brief Counsel summarises the NPS's provisions and provides a short commentary.

Key provisions

Key provisions are that Resource Management Act (RMA) decision-makers:

  • recognise and provide for the national significance of renewable electricity generation
  • have particular regard to the fact that "even minor reductions in generation can have significant adverse effects", and to the Government's 90% renewable energy by 2025 target
  • recognise the practical constraints associated with electricity generation including: the need to locate it near the renewable energy resource, the location of existing assets and infrastructure, the distribution network and the need to connect to the national grid
  • provide for mitigation opportunities where possible and for offset and/or compensation measures, where not, and
  • take steps to avoid reverse sensitivity effects on consented and existing generation activities (in other words, restrict or preclude neighbouring land for uses, such as housing, which could otherwise generate conflicts or incompatibility issues between property owners).

The NPS covers solar, biomass, tidal, wave and ocean current, hydro-electric, wind and geothermal generation. It also provides for distributed generation and for the investigation of potential sources and sites by existing and prospective generators. Territorial authorities are instructed to provide for the development, operation, maintenance and upgrading of these activities "to the extent applicable in the region or district".

In what the Cabinet Paper describes as "a major step forward", the NPS includes a monitoring and review framework to test its effectiveness after the first five years of operation.

The Ministry for the Environment is now identifying a range of measures to support the NPS. These are likely to include a National Environmental Standard (NES) in relation to wind energy and "perhaps other energy types". NES can achieve national consistency in consent activity classification, performance standards and so on.

The Ministry will report back to the Minister by mid-year.

Chapman Tripp commentary

The Government has a lot riding on the success of this NPS.

  • The achievement of its 90% renewable target will require a substantial increase in renewable generation capacity (perhaps as much as 77%) in the next 15 years, including a significant increase in large scale production (over 10 megawatts). Few such projects have been consented in the last 20 years.
  • New Zealand's emissions profile since 1990 has seen a 72% increase in emissions from the electricity sector due to the increased reliance on geothermal generation. (The NPS accepts geothermal supply into the renewable camp but places it last in the list).

Accordingly, the Government has gone to some lengths to ensure that the NPS will have real bite.

It was not prepared to accept the Board of Inquiry's recommendation that the NPS be given immediate effect by requiring the Councils to retro-fit certain provisions into their plans, as it is able to do under the RMA. But the instruction that Councils reflect the NPS policies "to the extent applicable in the region or district" will carry weight. (The Cabinet Paper records that this wording was resisted by the Department of Conservation on the basis that "it could even mean that use and development of all such resources in a district or region needed to be provided for").

This message is reinforced by the monitoring mechanism, the aim of which is to keep pressure on the Councils to perform. The Cabinet Paper states that the data "will provide a solid base of evidence for future policy development or legislative change if required".

And the Government can also use the other instruments that it has at its disposal to reinforce the NPS's objectives. These include, most obviously, the new fast-track consenting process for nationally significant assets.

National Policy Statements are a means through which central government can provide leadership on RMA trade-offs and can pick and back winners when hard choices need to be made.

In recent years the need for such direction has been seen in the trade-off between use and development in renewable generation such as wind farms (and hydro), and RMA protection values concerning landscapes, natural values and amenities.

What could prove very important going forward is how the NPS will influence any trade-offs in regard to development opportunities. It will be vitally important for that balance to be struck correctly to ensure policy intervention of this type does not result in productivity loss to the New Zealand economy.

It is particularly relevant bearing in mind the New Zealand economy is heavily dependent on primary production, which is itself dependent on consumptive use of water resources. In the debate on these issues, the long awaited Freshwater NPS could be very instructive.

For more information, please contact the lawyers featured.

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The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.

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