The country's biggest electricity retailer is cautioning about ideas of having New Zealand use 100 percent renewable energy.
Genesis Energy's Huntly power station. Photo: Genesis Energy
The government has announced a study into a multi-billion dollar hydro electric scheme to build a reservoir at Lake Onslow in Central Otago, which would store water when energy demand is low, and release water when demand is high but lake levels were low.
The project has been put up as a way to get around electricity shortfall during dry years and to allow the retirement of coal and gas fired thermal stations such as Genesis's Huntly.
The company has already signalled it wants to reduce use of Huntly for ordinary power supply and reserve it for back-up supply.
Genesis chief executive Marc England said the study needed to take a broad approach about a low-carbon energy future not just electricity.
"Genesis urges caution that aggressively pursuing a 100 percent renewable electricity may be very expensive for consumers.
"As electricity generation contributes only 4.2 percent of New Zealand's emissions, a bigger decarbonising prize would be the electrification of transport, 21 percent, and industrial heat, 8 percent."
He said another notable issue to be discussed and resolved was that of transmission prices, especially for upgrades for new ventures in a district.
England cited the example of Synlait Milk's new factory at Pokeno in northern Waikato, which had installed an electric boiler but found the cost of upgrading the power supply accounted for three-quarters of the total cost, while the surrounding district had benefited from the improved supply.
"Genesis would like to see a clear policy framework for new grid connections, focused on removing the first mover disadvantage that exists for businesses wanting to connect to the grid to support the electrification of industrial coal or gas-fired boilers."