Last Thursday, the MBIE released a report called Energy in New Zealand 2013, which replaces the old Energy Data File series. It’s chock full of energy-related goodies, which is very relevant to us here at the ATB; transport requires energy, after all. In the next week or so I’ll look at different bits of the report, starting today with electricity.
As Patrick and others have pointed out many times on this blog, New Zealand is damn good at making electricity. Mr Reynolds notes that we’d have a much better chance of tackling the issues of the 21st century “if only we understood our wealth in electrons and our relative poverty in hydrocarbons”.
According to the MBIE, “New Zealand’s share of electricity generation from renewable energy sources rates consistently in the top three nations in the OECD (behind Iceland and Norway)”. Yay us! This is driven by our strong hydro resources, with geothermal playing a part, and wind a fairly recent addition to the mix.
In a typical year, more than 70% of our electricity comes from renewable sources. Incidentally, research suggests that we can get to 100% renewable electricity production in the future (for non-‘dry years’) – it’s feasible and won’t cost a packet. I’ll look at that another time.
Electricity Demand and Development
Electricity demand fell 1% in 2012, and “a flat demand outlook means it is unlikely that major new investment (not already committed) will occur until 2020”. Power companies have identified plenty of opportunities where they can build new plant – wind, geothermal etc – but not much will be happening unless there’s a lift in demand.
For the time being, though, there are some projects already underway: “over 270 MW of geothermal generation, 60 MW of wind generation and 6 MW of hydro generation [are] currently under construction”. These figures refer to generation ‘capacity’, and wind in particular never gets near its theoretical capacity. The 60 MW of wind generation will probably produce 10-20 MW a year, so essentially most of the new electricity that is produced will be geothermal.
Another interesting graph shows electricity prices for residential, commercial, and industrial users over the last 40 years. Without getting too political, you can see why graphs like this cause some people to feel like they’re getting ripped off. For starters, though, I’ll note that if you strip the GST off the residential prices, part of the price gap disappears; and commercial and industrial sectors use larger quantities of electricity per customer, and usually during off-peak times, which means that it costs less per unit to supply them.