Chair of New Zealand member committee explores the 3D's ahead of the Asia Pacific Energy Leaders' Summit

Posted on 29 October 2018

Decarbonisation, decentralisation and digitalisation are just 3 of the key issues impacting the Asia-Pacific region. At a time when the energy sector is undergoing rapid change, we talk to David Caygill, Chair of our New Zealand member committee, ahead of the 2018 Asia-Pacific Energy Leaders’ Summit on 31 – 1 November.

Why are the 3D’s central to the energy transition?

Decarbonisation is essential due to the climate change crisis the global energy community is currently facing. After the Paris agreement, countries have committed themselves to turning the situation around with clear policy directions in place. Private actors are also going to need to respond. Our Prime Minister, Jacinda Arden, who is fairly young, has said, “The need to decarbonise is the equivalent of the anti-nuclear challenge of previous generations”. It could be an issue that resonates strongly in New Zealand, but she is clearly not alone in regarding this issue as one of the most important challenges of our time. Decentralisation is slightly different.

For many countries, there are opportunities that are opening in many fields, certainly within the electricity space, to produce, consume and distribute energy in a less centralised, top- down way that it has been in some sectors in the past. Decentralisation pairs well with decarbonisation, but is not the complete answer. Similarly with digitalisation, it is increasingly inevitable in a number of sectors, in particular, energy. We are seeing a range of technologies which are becoming decentralised. The three fit together quite well, but often are quite individual entities.

How is BusinessNZ Energy Council contributing to the energy transition nationally and within the Asia Pacific region?

Without overstating our importance, BusinessNZ  is quite unique within the country. It isn’t just a private sector body, but also includes a number of government agencies and covers the entire spectrum of energy issues. It provides a very useful forum for discussion, sharing knowledge and valuable insights. Over the last few years we have taken the Council’s World Energy Scenarios modelling and extended that to the New Zealand energy landscape. We are building a second round of scenarios that will support our members in their planning and policy discussions. Government agencies have also expressed interest in our Scenarios work. Above all I believe, one of the most important issues is the value proposition we offer to our members and what benefit they the gain from the organisation. We always get good attendance and strong engagement at our events we organise.

What do you see as the three most pressing issues within the energy sector within the wider Asia Pacific region, or does it vary at national level depending on the country?

The challenge of responding to climate change is universal and impacts the whole of the Asia Pacific region but also on a global level. There is no question about that. Certainly within New Zealand the 3 D’s are of importance, but in other countries within the wider region that may differ. The key thing for me is how we can learn from each other. Meeting as a region that is wider than just once country is valuable. For example, we had a speaker external from the Asia pacific region who participated in one our conferences a few years ago who was able to speak about what was going on in Norway with regards to electric vehicles, using a new Zealand vernacular.

In light of your background, how is the political landscape helping to shape the energy sector within New Zealand?

We have a fairly new government in place after have being in opposition for a while. I have a sense of a government that is still finding its feet. Having said that, the Government has recently set up another review of the electricity sector. We are midway through the initial process. The government intends to honour the commitments New Zealand made in Paris with regards to global warming, which is a step up from the previous government. There was a policy change announced recently regarding  exploration permits, which are not going to be issued for oil and gas in any further geographical areas. This is a good example of the policy direction the Government has set. The government are also tackling equity issues. It is interesting that public agencies have adopted the Trilemma framework the Council has outlined in its reports, and BusinessNZ has been active in promoting this. I think it’s a helpful tool in assessing the differing issues impacting the energy sector, in a holistic way. It’s a small but powerful example of how the Council has been able to contribute to the policy discussion with the country.

Who do you see as the new players/ market entrants within the region?

People have been talking about the rise of the consumer, I don’t believe we have seen a dramatic shift in last 8- 10 years. During my time as Chair of the Electricity Commission, around a decade ago, people in the energy community, were already talking about the ability of consumers to become more empowered, with the electricity sector moving towards the demand side and not dominated by the supply side. This wasn’t a new issue even then, as this was being  discussed a few years before then. New Zealand has had smart meters for some time, so by no means are we utilising them to their full potential value. However, we are starting to see a growth in household solar generation in New Zealand. Although it is still a small proportion of our energy generation, it is interesting to see households in our metropolitan cities being energy sufficient.

What are you expectations for the Asia Pacific Energy Leaders’ Summit?

There are number of interesting initiatives that are taking place in New Zealand right now, with the Electricity Review of the industry, a number of new climate change policy measures which are emerging, along with a number of new trends and technologies within the energy sector within the wider region. That will help drive insightful dialogue at the Summit. It is great that  New Zealand can be part of a wider global framework, enabling the summit to be a perfect forum to share ideas and learn from others.

About David Caygill

David Caygill, is a former New Zealand politician. He entered politics in 1971 as Christchurch’s youngest city councillor at the age of 22. He served as a Member of Parliament (MP) from 1978 to 1996, representing the Labour Party. Serving as Minister of Finance between 1988 and 1990.

After leaving politics, Caygill returned to his original occupation, law, as a partner at prominent law firm, Buddle Findlay,  He also worked for a number of government bodies, and was chair of the Accident Compensation Corporation. He chaired a ministerial inquiry into the New Zealand electricity market in 2000, and was appointed chairman of the Electricity Commission in 2007. He is a board member of the Energy Efficiency and Conservation Authority, and is the chair of the Education New Zealand Trust.

In 2010, Caygill was appointed by the National Government as one of the commissioners at Environment Canterbury. He holds the role of deputy chair. In 2010 Caygill was also  appointed as the Chair of the 2011 NZ Emissions Trading Scheme Review Panel. In 2015 Caygill was appointed Chair of BusinessNZ Energy Council.