Auckland, New Zealand (AHN) - To increase New Zealand's use of renewable energy, the Ministry of Energy banned Thursday the construction of fossil fuel plants. The 10 year ban covers only state-owned power firms, but the Ministry is considering extending it to the private sector. The Ministry also allotted $2 billion NZ for the development of cleaner alternative energy sources.

"The Government expects all generators...to take its view into account when considering new generation investments," The New Zealander quoted Energy Minister David Parker.

The only exception is for emergency power back-up systems.

With this new long-term energy policy, state-owned Genesis Energy's plan to build a $500 NZ million gas turbine plant near Auckland is scrapped. The mothballed project, two years on the drawing board, intended to generate 360 megawatts of power for 360,000 households. Genesis did not expect a sudden shift in the state's energy policy as it even briefed analysts this week on the progress of the Rodney plant.

Finance Minister Michael Cullen backed the Energy Ministry's decision. He said New Zealand does not need additional thermal capacity given its vast wind, hydro and geothermal resources. The country is the world's number one producer of geothermal energy.

Under the new energy plan, the government targets by 2025 it will source 90 percent of its electricity from renewable energy, up from less than 70 percent at present.

The plan also includes a 25 percent higher fuel efficiency for new and used imported vehicles by 2015, more cycling and walking routes and a 10 percent reduction in single occupant travels.

Source: http://www.allheadlinenews.com/articles/7008806539