Contact Energy, which is engaged in power generation, has said that the New Zealand government's target of 90% of electricity coming from renewable sources by 2025 is ambitious but possible. The utility has also said that the announcement of an emissions trading scheme will be an important step towards achieving the newly revealed target.

In a press release, Contact chief executive, David Baldwin, said that the New Zealand government’s announcement of a renewables target and the revelation that it will gradually introduce an emissions trading scheme are significant, as all greenhouse gases and all sectors will eventually come under the scheme.

Mr Baldwin said: Contact has advocated that carbon must be priced across the economy and through a market-based mechanism, rather than through taxes levied on some sectors but not others. Today’s announcement takes a whole of economy approach to the pricing of greenhouse gas emissions and, as a result, has the best chance of delivering emissions reductions.

Ensuring there are no free credits for electricity generators will ensure New Zealand retains a competitive and fair electricity market and that all companies are equally incentivised to reduce greenhouse gas emissions, Mr Baldwin concluded.