Green Party's Shaw reveals leached nitrate levy policy is off the table - for the time being; Alex Tarrant reviews the government parties' climate change mitigation stances and wonder whether there'll be a future clash on the means to the end?

Green Party's Shaw reveals leached nitrate levy policy is off the table - for the time being; Alex Tarrant reviews the government parties' climate change mitigation stances and wonder whether there'll be a future clash on the means to the end?

By Alex Tarrant

The Green Party’s policy to introduce a nitrates levy is on the backburner until further notice, having not made it through the government formation discussions.

Leader James Shaw confirmed the development while speaking to the NZ Herald’s The Country programme on Thursday. Host Jamie Mackay put to Shaw that Labour’s water levy policy was gone, and asked what had happened to the Greens’ nitrate fertiliser tax during negotiations.

“At the moment that’s off the table,” Shaw replied. “And this is the thing about MMP, right, is it’s actually designed to moderate all the parties there – no party gets everything that it wants.”

Farmers shouldn’t have anything to fear from the new government, he said. “I know that there will be some, and I can understand why that’s there. But all three parties have got strong advocates for farmers and the agriculture sector in them, and we all know that this is all of our problem to solve.”

“We’re all aware of the challenges that we face and we’re all aware that what government needs to do, on behalf of all Kiwis, is to have some skin in the game, so how do we support the farming community…through all of this transition.”

“I know the vast majority of farmers are already doing so much up and down the country when it comes to things like cleaning up our rivers and all that kind of stuff,” Shaw said. Added support from the government would mean this can be moved along more quickly.

Nitrates levy

A leached nitrate levy policy was announced by the Greens in early September as part of a wide-ranging environmental and agriculture platform. It also included a moratorium on dairy farm conversions, and incentives to encourage conversion to organic farming practices.

When the Greens’ policy agreement with Labour was revealed on Tuesday, there were only a couple of lines which broadly touched upon the issue: “Provide assistance to the agricultural sector to reduce biological emissions, improve water quality, and shift to more diverse and sustainable land use including more forestry.”

And: “Improve water quality and prioritise achieving healthy rivers, lakes and aquifers with stronger regulatory instruments, funding for freshwater enhancement and winding down Government support for irrigation.”

Note that there is no mention of the tools to be used to achieve the end goals.

Carbon pricing mechanism

Shaw on The Country was also asked about the risk of farmers being brought under the Emissions Trading Scheme (ETS). He was asked whether Labour’s agreement that 95% of all agriculture emissions would initially be exempt from any pricing mechanism meant it was merely tokenism. Why not just continue with the stance to leave agriculture out?

“Well, because over time – and I think everybody acknowledges this, including farmers and people in the sector themselves – over time, that will eventually change,” Shaw said. “But what’s important is that people…get into the mechanism and kind of start to understand it.”

While most wouldn’t feel the impact, the process of being in it and getting a sense of how it works is probably a healthy one. “We’re talking about a 30-year transition between now and 2050. I just think the sooner that people get into the system, even if it is essentially in a way that’s free, means that they can kind of see how it may unfold over the coming decades, and start to adjust early.”

ETS not even in the Greens-Labour policy agreement

It should be noted that getting agriculture under the ETS, or even some sort of carbon pricing mechanism, was not even mentioned in the agreement between the Greens and Labour. It was the Labour-NZ First document which stated:

“If the Climate Commission determines that agriculture is to be included in the ETS, then upon entry, the free allocation to agriculture will be 95% but with all revenues from this source recycled back into agriculture in order to encourage agricultural innovation, mitigation and additional planting of forestry.”

All three government parties agreed on setting up a Climate Commission, and on the goal of New Zealand becoming carbon neutral by 2050. However, because their prescriptions for getting there differed, there is a distinct lack of mention of any means to the end goal in the two agreements signed between Labour and its support partners.

Where Labour wanted to keep the ETS in place, the Greens wanted to replace it with an all-sectors, all gasses Climate Fund. New Zealand First wanted to exit the ETS and replace it with a Climate Change Act with carbon budgets set.

A future clash?

So, perhaps this is one policy area where there might be future clashes between the government parties?

We have some knowledge of what we’re going to get: A Climate Change Commission is going to be set up. The Commission is going to be tasked with coming up with recommendations for how to achieve net zero emissions by 2050 – as stipulated by a Zero Carbon Act. And, if one of those recommendations is to include agriculture under the existing ETS at some time, then only 5% of these emissions will initially be covered.

What we essentially have is broad consensus on the principle of the end-goal. What’s missing is the actual policy meat required for getting there.

The go-to publication on Climate Change this year was the Net Zero in New Zealand report by Vivid Economics for the cross-party Parliamentary group of MPs, Globe-NZ. While it sets out various paths for New Zealand to hit net zero carbon emissions between 2050 and 2100, the policy track required to actually have arrived there by 2050 is pretty eye-watering.

This is how we reported on the three emission reduction tracks offered up by Vivid – dubbed Off Track, Innovative and Resourcefulback in March. These comments concern the ‘Innovative’, then ‘Resourceful’ tracks (Off Track doesn’t get close to the 2050 goal so let’s leave that to one side):

Try something a bit more like this. By 2050:

Coal electricity generation: Zero; Gas generation: Down 73%; Hydro: up 21%; Geothermal: up 161%; Solar: Up 21,000%,

Dairy livestock: Down 20%; Diary livestock productivity: up 25%; Dairy emissions inhibited by new vaccines: Down 30%; Dairy emissions inhibited by selective breeding: Down 15%. (Similar numbers for beef and sheep)

Farmland: Down from 12.4m hectares to 10.6m, while Forestry rises from 1.7m hectares to 2.9m and some livestock farming is replaced with Horticulture.

Those are just some of the shifts (on top of vehicle and train electrification) that would be required to get our greenhouse gas emissions on a trajectory to net zero by sometime in the second half of the century.

Not by 2050 like we’ve agreed to, but by sometime after that. The problem? (other than short-term politics):

“[This track] is heavily reliant on a series of technological advances whose feasibility and costs remain uncertain and which, if they fail to materialise, would make this scenario high cost or unattainable.”

Translation: That’s going to be bloody tough.

So another track was suggested [Resourceful]. This basically required a shed-load more farmland to be converted to planted forests (as well as the renewables targets, some livestock productivity growth and electrification).

Sound easy? There’s a catch:

“the substantial change in land-use patterns implies significant social and environmental challenges. Socially, it would imply profound changes to rural livelihoods and New Zealand’s rural economy.”

That, in a nutshell, is the challenge. A big challenge.

Keep in mind that stark warning about livelihoods in New Zealand’s rural economy if the changes aren’t managed carefully (particularly for the Resourceful track). Then try and remember which new government party campaigned heavily to the rural voter base.

New Zealand First MP Tracey Martin earlier this year said NZ First believes there are ways for New Zealand to reach net zero by 2050, with her comments focussing on the technological advances required – putting less stress on the need for widespread land-use change.

“We must optimise the opportunities that the Innovative pathway offers,” Martin said a few months back of the Vivid Economics report.

Remember, the Innovative track is the one most heavily reliant on technological stuff we don’t know about – how good will desired new technology and research actually be? Resourceful is the one which could be the more realistic way of actually hitting the target without relying on the unknown.

Here are some of Martin’s thoughts from earlier in the year on the Innovative and Resourceful tracks:

We must optimise the opportunities that the Innovative pathway offers. However, the Resourceful pathway relies less on those technologies and will require much more land use change. It is an especially huge project for afforestation and therefore a start on these opportunities must be made as soon as possible.   Whichever pathway is chosen, the choice must be meaningful, not only as a means to offset emissions through carbon sequestration but also as a way to enhance regional economies and job creation.

New Zealand First believes that it is possible for New Zealand to reach net-zero emissions by mid-century. This could be achieved by combining the best elements of all identified pathways; by including a high uptake of technological innovation to reduce emissions, by the optimisation of afforestation, by progressively switching to less emissions-intensive agricultural production and by the closure of energy-intensive industries. However, it is also true that it is possible to enhance internationally energy-competitive industries such as the Tiwai Point aluminium smelter, which unlike many overseas plants, is powered by a fully renewable and almost carbon-free source.

Obviously, agriculture is the biggest challenge. It is already clear that the potential for an innovative transition—not decimation—in New Zealand’s agricultural production is available for us to grasp, provided we start now. It is essential that NZ lead in this – fast following is far too late! The farming industry and its supporting sectors are both able and willing to do this because they know what the future will bring and they understand the nature and the importance of the challenge. They also know and understand the magnitude of the opportunity.

The fundamental need is not to reduce water takes and uses, provided they are sustainable, and not to attack intensification (as some do). It is to invest much more in research and innovation to ensure that future intensive agriculture is sustainable.  This means an end to the leaching of nitrates, phosphates, and harmful organisms, an end to water mining and excessive takes of surface water and the reduction of greenhouse gas emissions to a level which will enable us to reach our Paris commitments through the use of new technologies. We need to combine these measures with deft land management policy, land use change and a major afforestation project (especially on the millions of hectares of marginal land we have in New Zealand).

There is a responsibility on the whole nation to stop pointing fingers, especially at the agricultural industry. We all need to work with our farming communities to ensure that the changes needed are made progressively and in an orderly practical way. This will need investment by farmers, industry and the government on a large scale, because without farms that can be run as successful businesses we will have no hope of success. Consequently, the on-going viability of agriculture is a bottom line for New Zealand First.

So, any policy prescriptions for net zero by 2050 offered up within the next three years which look like they’re veering too close to the ‘Resourceful’ track, rather than staying firmly on ‘Innovative’, could ruffle some feathers.

Particularly if “the regions” are New Zealand First’s prime target for boosting its party vote in 2020.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Two comments.
1 - The issue with the leachates is that of measurement, and of baseline. Of course it's possible to measure current loadings, and decide if they are too high because international and empirically tested standards exist for such loadings. But there is fairly much no baseline of what a 'natural' composition of leachates ever was, for the hundreds of thousands of streams and water bodies. So deciding what has been added, by what means, by whom, is rendered nigh-on impossible. Inevitably, the decisions would be subjective, arbitrary, broad-brush, and thus insensitive to specific environments.

2 - I am amused to see 'hydro up 21%' in the wish-list for 2050. This means more dams, more diversions, and more mixing of differing water bodies. Given the implacable opposition in the recent past to any one of these three essentials, it's difficult to see much movement unless something gives. Most probably, starry-eyed Kumbayah is gonna meet Ms Reality.

Existing Hydro plants can be made more efficient with new technology.I think manapouri had new turbines put in , that were 50% more efficient. The new pylon wires from Central north island to AUckland allowed more hydro to be used, that used to be spilled. Therefore , I think an extra 21% could be gained from existing Hydro alone. I also think there is huge potential for off river storage to utilise more of high rainfall that currently spills.

Here is another idea from left of field. Should we look at geothermal power not only as an energy source but also as a possible insurance against future eruptions. Of course we would have to ensure we did not trigger events but is it possible to alleviate the heat and pressure of our volcanic hot spots while producing useful energy at the same time. The Taupo supervolcano will devastate most of the North Island when it eventually blows again.

They didn't make the Manapouri units more efficient. The major gain was the second tailrace, which lowered the head loss. This allowed them to run the 7th unit. New runners may make about a 5% gain but deteriorate with age.
The new lines from Wairakei to Whakamaru to Auckland didn't decrease spill. There is very little NI spill - it generally only occurs on a few dams during major flood flows. There is spill in the SI because of the Livingstone constraint but even if the DC was larger, they couldn't use it in the NI because it would make the grid unstable.
There is no off-river storage potential without billions of dollars investment and we don't have the baseload thermal to fill it.
So that's 3 out of 3 wrong.

Solarb - the increase in MW is mainly because they let more water through. That is not efficiency.

Where was the water going before it was let through? And is that not classed as spilling?. And what was the justification for the new higher power pylons?

solarb - you don't understand grid operations or even electricity generation at all do you. The total flow through the dams remains the same, it can just be peaked more so Mercury get more money when the price rises in the heavy load peaks. They don't spill so they haven't stopped it. The lines north were overloaded. With the closing of Otahuhu and Southdown, a lot more power has to move north.

So where was the extra water going ? i based my post on the info provided as the justification for the new power pylons.

There is no extra water. The new lines were to reduce line losses from more power moving nouth and to give N-1 redundancy. Now please actually learn how the NZ grid functions before making more comments

"1 - TL;DR... Inevitably, the decisions would be subjective, arbitrary, broad-brush, and thus insensitive to specific environments."

Obfuscate much? If we know the threshold at which concentrations of nitrates become troublesome, set the acceptable limit somewhere south of there. Done. It won't please the sophists but that's not the point.

...because without farms that can be run as successful businesses

I think we need to agree on a definition of what is a successful agricultural business and then consider these policies in that light;

Yes Kate, and that was for the 2009 tax year which coincided with a milk price drop of $2.84/kgms. The 2007/08 milk price was $7.59/kgms and 2008/09 was $4.75/kgms.

As an accountant I’ve seen a fair few farm accounts over the years. One of the reasons some get themselves into strife in lean years is the apparent obsession with tax deductible investing of surpluses in good years that deprive them of cash needed in the downturns.

No kidding they manage to get themselves into strife... as Conor English points out in that article,

"There was more debt because farmers had been borrowing from the bank to pay for groceries."

Gee, from a tax perspective, I can't figure out how a business is able to take on more debt to cover expenses that have nothing to do with the running of the business?

It’s business related expense, but the question is how efficient it is e.g. buying a big tractor at the field days when you could have hired a contractor instead. Banks seem willing to fund through the downturns if there is untapped equity, albeit Winston must have a few cases where that didn’t happen, hence the review.

Theyre not deducting it as an expense, they are borrowing against the value of the farm to buy groceries. It would be classed as drawings.

Bit silly when you could have instead sold the tractor (or whatever non-essential item) you bought in the prior surplus year as the means to avoid paying tax.

I do sometimes wonder if there really are agri-business owners out there as dumb as what Conor English used to make out. What industry anticipates all good years and no bad. If you fritter away all the profit in the good years to simply avoid paying tax, and increase your drawings (i.e., borrow more) to compensate in the bad - I'd hardly call that a "successful business".

"What industry anticipates all good years and no bad"

Auckland houses

Silly, do you know how I feel!.
If I known the greens policies were & would vapour, I'd have voted for them more and often!.
Its real green where we are now!.

"Its real green where we are now!."

Even the water!

the lack of a capital gains tax encourages it . all interest is tax deductible , the more you lend on the business or land, the less tax you pay. paying off loans increases your tax. the balance to this should be the rising capital value of the land or business your pumping the assets into . you can also claim depreciation on tractors , and get the full gst back on purchase, not when you actually eventually pay it off. so actually, many accountants would be telling farmers and business owners they are silly not to borrow to the maximum their assets will allow ,As mentioned the balance should be a capital gains tax on the increased value of the land etc, but that is not paid at the moment.

You claim gst back in the period that you purchased it. Not all farmers borrow for capital purchases.

Yes, but you don't pay full price when you purchase it . if you only pay 10% or less deposit, you get more back in gst refund than you paid. very tempting for small businesses with cash flow problems. Of course there is no more gst retund from the purchase once the payments kick in.

A tractor is an essential item Kate, on a farm. In good years farmers will spend on environmental initiatives, so according to you, they should go pull the trees out - after all they are 'non essential', delayed or additional repairs and maintenance is also done. Kinda hard to ask the contractor who fixed up laneways to come and take the metal back.

'Until you have walked in my shoes'........

Yes, indeed I know many great farmers, but I doubt any of them ever borrowed money to pay for groceries as Conor English would have us believe. It is the persistent moaning by Fed Farmers that gets to me - as if NZ owes their membership a living, as if no one works as hard as farmers, and as if no farmers are wealthy. The new lady appeared on the weekend Q+A programme and did little better.

That organisation has a lot to answer for - they give farmers/farming a bad name.

Kate - you surely do jest. The banks lent some thousands of dairy farmers more money during the dairy crisis, and a crisis it was, not only to cover their mortgages but to put food on the table. Without that borrowed cash how do you think they would have paid those expenses?

Perhaps with the surplus/retained earnings from the absolutely exceptional prior year?

Yup and many had rightfully repaid debt in past years - then when making losses, they had to go to their banks and borrrow new funds - borrow from banks to pay living costs. Some were still over-leveraged leveraged to do so supported by their banks.

Yes, now we're at what I'd call the right 'framing' of the the crisis - for some - not all - dairy farmers in that particular year. It was rooted in the need to borrow to pay back the interest on the borrowings. And that leads us back to the question I posed initially - that being, the need for a definition around what is a "successful business".

Farming for capital gain is not to my mind a "successful business". It all comes back to land prices. It must be soul destroying to work so hard for so many years as a good and intelligent, progressive farmer, only to eventually come to the realisation that no matter what your dedication and skill set, you paid too high a price for entry to the business.

My thought is that Fed Farmers ought to start explaining that agricultural land prices are just too high in NZ; they need to quantify for the rest of NZ just how prevalent the debt crisis is (as they presently make out as if all farmers are unable to pay what amounted to a peppercorn resource rental for a key input to their business) and put together suggestions and initiatives for the country to collectively address the debt crisis (if there is a major one) - and then I'd listen with enthusiasm as opposed to cynicism.

I cannot ever in my wildest dreams imagine anyone in Fed Farmers doing what you suggest. That is so far outside their conservative looking after themselves thinking as to be laughable.
As too your "successful business". I have been exstordinarily successful having never achieved much in the way of capital gains. Of course I also own 3/5 of SFA having failed in my dream of owning a farm, at least in part because I thought along those lines. I was wrong and wish I had gone for capital gain over profit.

I know where you are coming from and it is yet another of the injustices in the sector that, as you say, will never get much (if any) airtime from Fed Farmers.

I often wonder why the 'fraternity' of agricultural landowners don't act like much of a fraternity at all here. Whereas those of us that have attended universities are considered alumni and are kept in touch and proactively approached regularly for charitable purposes to contribute/assist the next generation of up and coming students/graduates - I don't think the same sort of fraternity-type charitable activity happens where retired/sold up agricultural landowners are concerned, is there?

There should be. Surely that type of activity by Fed Farmers would be part and parcel of succession planning for the next generation of landowners.

Mentoring of young farmers by older (not usually retired) farmers has been happening for years Kate. You aren't aware of it because you aren't a young farmer looking for one. ;-)

Fed Farmers is a lobby group.

Not mentoring that I'm talking about - I'm talking about charitable financial assistance, particularly given the high cost of entry that many young farmers are now struggling with.

It does happen but it's not sung from the rooftops. Contract, share milking & equity agreement's also can allow flexiblility for it.

Kate - Maybe you didn't read the cost-structure bit..."English said the primary sector was responsible for 66 per cent of exports but, for each dollar earned overseas, only 6c went to the farmer. "So the other 94c goes in ... all the cost structures around getting that kilo of meat from the farm gate to the shore."........the average person doesn't have any idea on the many costs which are really hidden forms of taxes that agriculture has to pay for.......

The funny thing is Agriculture is a successful business often times not for the farmer running it on an annual basis but for all those who get to take a suck at the any lack that you perceive is certainly not perceived by banks, bureaucrats, politicians, accountants and others.......


Similarly an astute farmer friend noted to me years ago that too many farmers pay as much debt down as they can in good years with our realising the bank wont necessarily loan you more in bad years to tide you through.

His approach was a steady debt reduction plan with good years building up a cash reserve for lean years and bulk debt reduction cautiously if series of good years. Might not be most tax "efficient" I guess but probably less stressful.

Ex Expat - when you refer to 'some' are you referring to the majority or minority? As an accountant would you say that what you refer to above can/does apply to all business sectors not just farmers?

I don’t see a wide enough range of farm accounts to say it’s a majority. I tend to recall the cases where their Bank is on the warpath asking for next years projections and I’m under pressure to show they’re a good risk but urgently need more cash.

All business sectors try to minimise tax, but others are often less certain about cash flow so don’t tend to load up on assets for depreciation expense.

i think there was a big misconception that the greens were out to punish farmers. they always said they wanted to help farmers to reduce their emissions. so it was tax on one hand , assistance in other ways on the other. i think most farmers would have come out even , providing they reduced their emissions. this also sets the greens up to be able to campaign on this at the next Election, i.e , as the deal they will get if NZ First are not in the coalition,

Nitrate tax wasn't about emissions it was about water quality and solely directed at the dairy industry for the first three years - despite urban waterways containing 18.5% more nitrogen that native forest waterways and pastoral land only 9% . They had no idea of what made up an Overseer budget.

" i think most farmers would have come out even" - you think wrong.

Green politics (also known as ecopolitics)[1] is a political ideology that aims to create an ecologically sustainable society rooted in environmentalism, nonviolence, social justice and grassroots democracy.[2] It began taking shape in the western world in the 1970s and since then Green parties have developed and established themselves in many countries around the globe and have achieved some electoral success.
Core tenets
The four green pillars

According to Derek Wall, a prominent British Green proponent, there are four pillars that define Green politics:[2]

Ecological wisdom
Social justice
Grassroots democracy
Not how social justice is a seperate branch from ecological wisdom. Ecological wisdom tells us that in a land-based economy too far from other countries to be a major manufacturing base each additional worker has a lower marginal productas a resultReal wages will fall Owners of land will benefit There will be an outflow of ‘native’ labour in search of higher wages in Australia The economy will be bigger, but average incomes will fall Resources will flow into low value service production.
Ecological wisdom tells us that the farmer cannot keep dividing the farm for his son's (or daughters).
Ecologial wisdom tells us that workers in Western countries have higher wages due to draconian border controls.
Ecological wisdom tells us that if you relax those draconian border controls the poor in the third world will be marginally better of but the workers in the first world will be drastically worse off.
Ecological wisdom tells us that there are two types of population curves a J and an S. The Greens will acknowlege that we have a "J" but will tell you that educating women is the key or that "it is predicted that [convienient scenario]"

There isn't 1600MW of new geothermal in NZ. The current generation is about 1000MW. They can get about 250MW from Tauhara, 50MW more from Ngawha, maybe 50MW from rats and mice stuff. There is maybe 500MW potentially more available from undeveloped fields (delineated by low resistivity boundaries so they know all the potential areas) but all of those are under conservation orders or exploration wells have shown very little potential there. They might be hot but the rock is tight so no good unless fraccing is allowed.
Solar is no good for NZ as our heaviest load is after dark in the middle of winter. Even the cheapest grid storage would more than double the power price.

We are in a better position than most for solar because of our proportion of hydro power, lake levels are essentially grid storage.

The Vivid Economics report say they got their data from MBIE's "Electricity Demand and Supply Generation Scenarios 2016". But that report only envisages 800MW of new geothermal by 2040. Even so, that is quite a lot - an extra 10% of baseload. The Vivid report is counting on pumped hydro and demand response to manage the grid. Chris, have you heard if Tauhara II is going to be built? Everything has gone quiet since consent was granted in 2010.

Robert - For Tauhara, the talk is the load hasn't increased enough for the power price to pay for the generation. It was thought that the cost would be around $1B.
With regards Vivid economics - pumped hydro!! Shows they don't know what they are talking about. It is only economic where you have a lot of thermal plant that can't be turned off overnight. For NZ, the benefit isn't there and the cost prohibitive
Baseload for NZ is around 3000MW of which about 600MW is Tiwai - For NZ, there could be problems with more geothermal plant because of river minimum flows

Chris, do you see minimum river flows becoming risk for the likes of Meridian and Contact going forward? I hear a bit of community negativity towards power generators because they won't release more water in to rivers to increase river flows. One in particular is the Waiau in Southland. Community wants an extra 50cumecs to flow. Meridian says no. There consent allows them to say no. But now with limit setting coming up in the future, the community along the river is asking why should they have to pay for degraded water quality when another 50cumecs will make a significant difference to the river. Do you hear any chat from the generators about community pressure on them re river flows?

Casual Observer.
Increasing the flow down the Waiau will mean less generation from Manapouri. NZ system is hydro based so when less generation from hydro, we need to burn more gas or coal to get the same number of GWh.
If the minimum flows in the Waitaki, Clutha and Waikato have to be increased, then the hydros are less able to load follow. This can affect several upstream dams as there is little storage in those bottom dams. There is only a set amount of water in the system. If it generates more in offpeak, it can't be there for peaking. This would probably mean water would be spilled at some of the dams in the middle of the night to stage the water, and more gas/ coal burnt to compensate.
The inflows into the SI lakes have been below average for a month or so. With TCC out on major survey, the coal units at Huntly may need to be fired up to get us through the summer unless we get a lot of rain.

We could..umm. Remove the subsidies on Tiwai and hopefully they would close a potline.
Unemployment you cry but the workers could be set to remediating the site.
In the mean while the surplus water could be redirected down the Waiau, which was sad mess in its upper reaches, last time I saw it...
Another example of production for no useful purpose..

Tiwai isn't being subsidized - that ended some time ago. Though it is beyond your comprehension, having a large steady load on the grid stabilizes it. I gather you don't use anything with aluminium in it. Or are you another sinner who preaches virtues for others?

Thanks Chris.

This is something I wrote for another blog on why large scale solar is a bad fit for NZ electricity.
The electricity has to be generated at the same rate as it is consumed. There can't be a significant inbalance (say greater than 1%), otherwise the system  has big problems. For NZ if the generation is less than the load by about 300MW and they can't get corrective actions in quick enough, then we have grid collapse when the frequency drops to 47Hz. That means we have a full blackout as many the generators have automatic shutdown to protect the plant. To keep in balance means when you say switch a light on, the generators have to pick up their generation a bit to compensate, and the reverse when the load drops.  
New Zealand has one peak in the load in summer, two in winter - In the morning from about 6 am to 9am and winter evenings from about 6pm to 10pm. Currently these are about 5000MW but in winter, they go to about 6500MW. They have to have enough generators running to meet these peaks. About 4am, the load is only 3000MW. Though this time of year, only the morning peak is really noticeable. Here is the current situation in NZ.
Geothermal power stations run flat out all the time and are very hard to switch on or off. They are baseload. Wind is there when its there but can't be relied on. That means all the load fluctuations have to be matched by changing generation on the hydros and thermal plant (gas turbines or coal fired boiler plant). There are limitations on them. The bottom dams on hydro rivers often have severe restrictions on the rate and number of flow/ load changes. However, it takes some time for water to get down the river - three days from Taupo to Karapiro. That means the water flow has to be carefully managed so there is water to generate when needed. The thermal plant can be stopped and started, but they have minimum loads. If they are to use fuel efficiently, they also need to be on for days but this can be up near maximum between 6am and 10pm, and down at minimum during the 10pm to 6am period with some loss of efficiency. For the big Combined Cycle Gas turbine at Huntly, this means about 380MW  and 180MW. The unit at Stratford is similar. The 250MW rankines at Huntly can go down to about 80MW. Loss of efficiency directly translates to more expensive power.
With all the dams on the Waitaki, Waikato and Clyde, they can provide the 2000MW low to high range but sometimes, they need to run fast start gas turbines to cover rapid changes.  No-one wants to build more hydro as it costs so much to get resource consents and the consent applications get refused by protests - Project Aqua, Mohikinui -  so we can't increase hydro capacity   
The problem with solar in NZ is it generates almost all of its power outside the peaks. This means it isn't of benefit to the grid operation. If there is a lot of solar in the middle of the day, they have to back off the big generators, usually hydro. But as the sun goes down, the load ramps right up and solar backs off so the change in load is even greater  This means they have to fire up gas turbines to be able to match the load. During the day, they could need to spill water at hydros to get water to the next dam in the river for the evening peak. That is why having solar on the NZ grid can mean they have to burn more fossil fuel.
The problem with solar is recognized in the industry. It is called the "duck curve".
Allowing a lot of solar on the grid can be done, but it would be very expensive. The average house uses about 24kWh per day (maybe 40kWh in winter and 15 in summer) and the battery storage systems for sale will hold only about a third of that - cost is about $500/ kWh and they have to be replaced about every 2000 cycles.
There are other major problems like voltage control, inertia and droop from large scale non-synchronous generation (wind or solar) but to understand those in even simplified terms would take a lot more space than this blog has.

That is a lot of technobabble.
Why doent we just ring Donald and ask him to run the grid for us if we are not capable.

The engineers can run the grid very well. When was the last time you flicked the switch and the lights didn't go on? Just need to stop the interferring politicians and know nothing keyboard warriors, and it could run even better and cheaper.

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