Wellington, Dec 17 NZPA - Legislation removing restrictions on new coal and gas-fired power plants has passed its first parliamentary hurdle.

The two-page Electricity (Renewable Preference) Repeal Bill tonight passed its first reading by 63 votes to 58.

The restrictions, which put a 10-year ban on new coal or gas-fired baseload power generation, were put in place in the previous government's emissions trading scheme (ETS) legislation.

Energy Minister Gerry Brownlee said the ban on new thermal plants was unnecessary and would undermine the security of New Zealand's power supply.

The Government is developing its own ETS and Mr Brownlee said it would put a price on pollution, providing adequate incentives for power companies to invest in renewable generation and making the restrictions unnecessary.

He said coal and gas produced about a third of the country's power, but during recent winters when there had been rainfall shortages in the hydro lake areas, it had risen to over half.

"Without those two fuels the lights would not stay on."

He said power generators and lobby groups including the Business Council for Sustainable Development had opposed the ban.

"The current Government has listened to the experts, agrees with the criticism of the ban and we are now moving to repeal it."

He said modern gas-fired stations gave off little in the way of emissions and could run around the clock generating large amounts of electricity.

Blocking new gas-fired generation could mean existing dirtier coal-fired plants could be kept running for longer.

The ban also disincentivised gas and oil exploration in New Zealand as there were less outlets for gas sales.

He said the Government remained committed to an overall 90 percent renewable electricity target. But Labour's former climate change minister, David Parker, said the ETS legislation allowed the possibility of exemptions for security of supply or to replace inefficient generation.

He said the new Government's reliance on an ETS was ridiculous when it had removed any certainty around the scheme by reviewing the existing ETS.

He said New Zealand needed to take a leadership role on reducing emissions.

"The reality is the world has very serious environmental problems, of which the most serious, probably at the moment, is climate change," he said.

"If a country as wealthy as New Zealand, with our environmental ethic, with our richness in renewable resources, with our system of democratic government, if we can't do the right thing and reduce emissions then the reality is the world will not."

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