‘Gas cheaper than Clyde dam power’

Press, 24 September 1982, Page 1

‘Gas cheaper than Clyde dam power’

Parliamentary reporter

Supplying natural gas to consumers throughout New Zealand would be cheaper than building a dam at Clyde to provide more electricity, a Parliamentary select committee was told yesterday. A lecturer in economics at Massey University, Dr Peter

Read, told the committee hearing submissions on the Clyde dam empowering bill, that the Minister of Energy, Mr Birch, was so committed to a high dam at Clyde that the Ministry of Energy had been constrained and had not paid sufficient attention to other options. The select committee heard evidence from the final witnesses after an intense eight-hour sitting yesterday. Dr Read, who was employed by the British Department of Energy for 10 years and worked on the design of nuclear power systems at Harwell', said the Clyde dam was not the cheapest- way of

meeting new demands for electricity. He suggested that the planned electricity output from the dam could be met if domestic consumers in the North Island and the South Island were supplied with natural gas. The electricity made available would cost less to provide than electricity from the Clyde dam and would be available sooner. The cost of building a transmission pipeline to take gas to the South Island was estimated to be as high as $450 million, he said in reply to questioning from the committee members. There would be a .saving of .between $7OO and $BOO million on the cost of continuing with the high dam. Gas had been given a low priority in the past. The traditional electricity lobby had been too strong and the case for gas had insufficient backing, he said. This was the most serious single mistake made in the

energy sector, but it was not too late to correct it. “The idea that too much has already been spent on the Clyde dam to stop now is absurd. It makes neither economic nor common sense to throw good money away after bad,” he said. The argument that the dam should be continued to preserve the jobs of the workers of Clyde was spurious because it meant keeping uneconomic employment at the expense of other economic work. Money saved from further work on the dam could be spent on other developments, such as irrigation and a deep water harbour on the West Coast. Gas reticulation was labour intensive and could be undertaken within a year. Mr Read said that further spending on the Clyde dam was illegal under section 7 (2) of the Electricity Act.

A submission by the Coalition for Open Government said that the bill had arisen because of the Government’s inability to marshal a convincing case to show that the Clyde dam was in the national interest.

Since June, 1978, the Government had been advised that the electricity produced from the Clyde dam 1 was likely to be surplus to South Island requirements. The Government’s reaction was not to scale down or abandon the proposed projects but the search for energy intensive industries to “mop up the surplus.” The collapse of the aluminium smelter proposal, earlier this year had again left the Government with the prospect that ' the Clyde scheme would be wholly or largely redundant to New Zealand’s requirements. If it was built, the dominant use of the dam might be the spillage of water, the submission said. Without the aluminium smelter, more than half the generating capacity of the new South Island hydro-elec-tric stations would be wasted during the 19905. From 1988 to 1997, 40.5 per cent of their generating capacity would be wasted. The level of wastage in the second half of the 1990 s would be reduced

only if a further Cook Strait cable was built in 1994. The argument that the dam was needed to meet demands during dry years was spurious. It was cheaper to burn oil in existing power stations than to build more hydro dams for the purpose. The submission said that building more dams than was needed meant a double penalty for the New Zealand community. Scarce capital resources were thrown away for no return. It would also be an obstacle to the effective use of the electricity that was already being generated.

“The cheapest option is conservation, and that is what the Government is not committed to,” said Mr K. Johnston, in reply to questions by the committee. A submission by the Environment and Conservation Organisation group said that there would be serious economic consequences for all taxpayers and electricity consumers from the Governments obstinacy over the High dam. Options were available which would be cheaper and which would cause less damage to the environment.

Electricity from a high dam would be wasted, while

a .low dam would produce enough to meet the growth in ddmand in both islands: Building a low dam would avoid a premature investment and this would more than counter the increased capital cost of building two dams. Professor A. F. Mark, a member of the Otago Catchment and Regional Water Board, told the committee on Wednesday evening that soil from the Cromwell Gorge should be relocated if the high dam went ahead.

The value of the food production potential of the Cromwell Gorge would, when fully developed, far outweigh the savings made with the high dam option, he said. If any dam was built, it jhould be a low dam because that would save the resources in the gorge. With its high-class soils and favourable climate, it had a productive potential that was unique to the region. It is expected that the Clutha Development (Clyde Dam) Empowering Bill will be reported back to the House this morning, although it is believed the Opposition will attempt to stall the report as long as possible. The bill will probably be passed next week, before the Government’s commitment to a dam-building contract expires.