Sunday, May 14, 2006

Major reformation of NZ energy complex to be announced in Budget.PT2

As we said in our previous post the IEA in its 5 year review of energy policies for participant governments undertakes a broad based review and provides conclusions and outcomes with Government participation under Chatham House rules.The suggested outcomes can be taken as a foregone conclusion.

As has been seen in the MSM one of the recommendations was for a review of the Carbon Tax .Whilst certain malthusians will undoubtedly be right behind this outcome,political constraints will prohibit this.

The IEA says

It is disappointing that the government has decided not to proceed with its planned carbon tax for some sectors of the economy, as incorporating a carbon price signal into the market is a cost-effective means of reducing GHG emissions. Following on this decision, the government is considering other options, including in the short term a more narrow carbon tax and in the longer term other measures. The government should also consider policy options beyond a revised carbon tax, including an emissions trading scheme linked to international markets.

The IEA recommends .

1 Outline a budget and plan for international actions to meet New Zealand’s projected Kyoto Protocol shortfall, and implement the plan as quickly as possible.

2 Consider implementing a carbon tax or emissions trading – or a combination
of the two – as quickly as possible.

3 Address CO2 emissions from the transport sector through appropriate fiscal and regulatory measures.

One of my researchers in Europe said that the Carbon tax will be introduced under another name for transport.The government told the IEA that this will alleviate political problems as the shortfall in the mineral fuels tax for road funding can be used as a de facto Road transport carbon tax.

Various prebudget costing scenarios for an increase in the Mineral fuels tax and road user levies from the shortfall of 5% to an increase of 15% as well as inflation indexing are with treasury.

In addition the changes of registration fees for differing vehicle CC and fuel economy ratings is to be introduced.


Blogger sagenz said...

given that the central & Local government owns most generation and distribution are you suggesting New Zealanders are being bled dry by their own government?

Or are those New Zealand owned companies with reasonable returns on capital finding a way to obtain other unreported increases in shareholder value?

3:41 PM  
Blogger maksimovich said...

The way the NZ companies are constructing the returns of investment are not on capital but on revaluation of assets.

The so called increase of asset value are actaully OM costs on comparitive overseas models.

The historical cost of the asset with its depreciated value should be the return cost of investment.This would signal the owners to upgrade the networks not maintain them which they do to subsidise their council operators.

The segregation of control points and metering ownership would allow a greater uptake of distributed generation.Here in NZ the beneficial owners of the distribution systems are placing pseudotechnical barriers to new players entering the market as it is more cost effective to only have 5 customers as opposed to say 500.

The concentration is mostly on the economics of financial instruments such as energy futures and models by the energy commission where it should be concerned with the technical attributes of the system

In NZ we are paying at the consumer level 25% more then Italy the most inefficient energy country in Europe and who has to import 30% of its electricity needs.

4:46 PM  

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