New Zealand has excellent renewable electricity resources. We’ve got hydro, wind and geothermal up the wazoo. In a typical year, more than 70% of our electricity comes from renewable sources, and the government wants this to increase to 90% by 2025 (for non-dry years).

NZ renewables over time

 Source: Energy in New Zealand 2013, MBIE

Researchers at the University of Canterbury have been investigating whether NZ could generate 100% of our electricity from renewable sources. Dr Ian Mason, part of the research team, gave a presentation on this topic at the NERI Energy Conference last year.

Mason cover page

The researchers are all from UC’s College of Engineering, and they have focussed on whether it is technically feasible for NZ to go fully renewable.

Since I’ve lost my notes (!) from the conference last year, I’m going to quote from a paper published by the researchers (Ian Mason, Shannon Page & Arthur Williamson – referred to as “Mason et al” below). If video is more your thing, though, here is a video of Dr Mason giving a similar presentation at a conference in California. There’s also a good newspaper article on their research here.

Do renewables have enough growth capacity?

If renewables are going to grow their share of generation, we’ll obviously need to build new plants. So the first question is, can we build enough capacity to match current demand, and allow for future growth?

According to Mason et al:

Recent resource estimates published by… EECA indicate near-term potential for 6600 MW of new wind generation, 4680 MW of new hydro generation, 635 MW of new geothermal generation and 3090 GWh/ year of electricity from woody biomass

That compares to current capacities of 622 MW of wind, 5,254 MW of hydro, and 731 MW of geothermal. Theoretically, we could develop twice as much hydro and geothermal as we have now, or ten times as much wind. In practise, we’d run into issues with the wind, since it can’t be relied on to blow when you need it – but Mason et al refer to several studies which suggest that “penetration levels well above 20%” are possible. That’s still three or four times what we have now.

Even the woody biomass contribution could be fairly substantial. New Zealand currently uses around 43,000 GWh/ year, so biomass could account for up to 7% of that.

Overall, growth in capacity isn’t an issue – there’s plenty of room for growth, although some of those plants will cost more to build than others. The other question is:

Can an all-renewable system meet demand in peak periods, or in “dry years”?

This is the tricky part. Electricity demand fluctuates quite a lot during the day, and during the year. We use more electricity in the evening, as people get home from work, shower, flick on the TV, and start cooking dinner. We also use more power in winter, mainly for extra heating. An all-renewable system would need to cope with both these patterns, as well as any unexpected demand surges.

The other issue is that hydro generation forms the backbone of our power system. For those plants to operate at full blast, we need good rainfall, running into the rivers which fill up the hydro lakes. Every now and again, we get a “dry year” with rainfall that is well below average. This means that we can’t generate as much hydro electricity.

“Dry years” aren’t that dry – the difference between our best year for hydro generation (2004) and our worst recent year (2001) was around 20%, or 5,000 GWh – but that’s still quite a bit of slack which other plants need to take up. And the crunch comes during winter, when demand is high and supply is struggling to match it.

Mason intro

So, how do you design an all-renewable system? You let the wind turbines turn whenever they can, as that’s essentially free electricity. Most of the geothermal plants will also run constantly. These are your “base load” plants. Hydro is also part of the base load, but the aim is to use as little of it as possible, since that’s the easiest form of energy to store for when you might need it later.

You also need “peaker” plants, which only run during higher demand periods. Hydro plants can actually gear up and down their production pretty quickly, so they’re a good option. To do this, they need to have “stored energy” ready to go – water reservoirs or lakes.

From Mason et al: “A significant characteristic of New Zealand’s hydro generation system is the relatively low energy storage capacity. When all lakes are full this amounts to approximately 34 days reserve at peak winter demand (approximately 130 GWh/d in 2007), assuming zero inflow”.

For an all-renewable system, you’d need to build a bit more storage. You might consider a “pumped-hydro energy storage” (PHES) system for some plants. That means that when there’s plenty of electricity available – the wind is blowing, and it’s a beautiful summer day – you use some of the excess hydro energy to pump water uphill, into another reservoir. During high-demand periods, you let it flow down again, delivering more energy to the power plant.

Ian Mason’s presentation assumes that we build PHES equivalent to 8% of the current hydro storage. As far as I can tell, there aren’t any other increases in storage – although I seem to remember him mentioning that current lakes would need to be dipped into more heavily. At present, the lakes have “minimum storage levels”, and need consent from the regulator to go below those levels. The minimum levels are perhaps on the conservative side at the moment,

It’s also possible to use biomass on a seasonal basis: burning it during the winter to match the greater demand. However, Mason et al don’t think it’s necessary, and this energy source isn’t developed further in their model.

Mason summary

From Mason et al:

The proportion of dispatchable generation in the final mixes was 75–78%, as wind was the only non-dispatchable source. Load shifting, pumped storage hydro generation, biomass-derived gas- fired generation and additional conventional hydro were considered the most likely peaking generation options for New Zealand. These are in addition to the response capabilities of the existing hydro system. Hydro turbine response times of 6–15 s (spinning reserve) can be assumed; implying that full power can be readily achieved within a half-hour period (the resolution of the modelling). Gas turbine response times of seconds (hot reserve) to minutes (cold reserve) can be assumed, again implying that full power could be achieved within a half- hour period.

One of the conclusions from Ian Mason’s presentation is that NZ can indeed develop a 100% renewable system. Whether this would be economically feasible, or likely under the current market structure, are different questions – the presentation does consider them as well, and finds that we’re unlikely to get there given current policy settings.  I’ll look at this another day.

Second, third and fourth opinions?

The Herald also published an article in their Element magazine a couple of years ago, written by Dr. Eric Martinot (“senior research director at the Institute for Sustainable Energy Policies in Tokyo and a teaching fellow at Victoria University of Wellington”). He began his article with:

 New Zealand could easily reach the goal of nearly 100% of its electricity from renewable energy in the coming two decades. And it would be folly not to.

Benjamin K. Sovacool and Charmaine Watts wrote a paper called “Going Completely Renewable: Is It Possible (Let Alone Desirable)?”, published in The Electricity Journal, vol. 22 issue 4.

According to them, New Zealand has “the resource base necessary to transition to a renewable electricity sector”, and “a completely renewable power sector is technically feasible. There are no sound technical reasons why existing renewable power plants could not replace all conventional units. To quote just one of a plethora of recent studies, ‘‘it is clearly feasible to replace the present fossil fuel energy infrastructure . . . with renewables.’’.

Greenpeace commissioned a study from the Institute of Technical Thermodynamics of the German Aerospace Centre, which found that “New Zealand can have 100% renewable electricity by 2025”.

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  1. if climate is all over the place as people say, would it not be a better to have a base load being generated by something that is affected by the ups and downs of the weather?

  2. I don’t see any reason why we can’t get 100% renewable, especially with such a high starting point and plenty of options.

    I’m just suprised we can’t get more Geothermal power.

    The other issue is when Labour gets in, introduces their stupid power scheme and scare off any investor who wants to invest in new plants. Brownouts, here we come.

    Lin, geothermal is not weather dependent and NZ has reliable wind sources as long as the wind farms are spread all around. I just don’t think we should be building more hydro. With climate change, it could be pretty risky about predicting future rainfall in various areas.

  3. Hi Lin, thanks for commenting – sorry, I didn’t mean to seem harsh above. I’ll give you a little bit more detail. Geothermal isn’t really affected by weather – that’s a very consistent base load. Wind and hydro are affected by weather, but that still tends to even out over time. As a number of researchers have demonstrated, it is very viable to use hydro as base load. When you’ve got wind as well, great.
    Even in “dry years”, hydro is still by far our most important source of electricity.
    Also note there’s an important distinction between weather and climate – weather is short term changes, like rain today or sun tomorrow. Climate is a long term thing which takes into account weather patterns, temperature etc.

    1. Was that just because they produced to many panels?

      And how much coal did they install in the same year?

      1. That was installed panels and it was intentional. Yes, I understand coal generation went up as well but their long term goal is renewables due to air quality.

        1. Nuclear is completely uneconomic and unnecessary here… the capital cost and time before one kw is generated mean they will never stack up against renewables. And then there’s their uninsurability, earthquake risk, and reliance on sophisticated technological structures we don’t and won’t have. Never gonna happen. Thankfully.

        2. China is build Nukes, the US is about to open the first new one for a very very long time, but has been closing more in the intervening period so net nuclear capacity is actually falling there. The UK is a mess.

  4. The authors make the point 100% renewable is possible. But remember our power companies now have private shareholders who will want power generated at the lowest price possible (and sold for as much as they can get). That means you have to generate at a lower cost than gas or even coal. Geothermal probably will, hydro will if you dont have to mitigate or manage effects on the environment but wind probably can’t if you include the backup station needed for when the wind isn’t blowing.

    1. I think you’ll find power companies already see the up side for their bottom line in not needing to constantly buy fuel; why else would genesis be closing down parts of Huntly as it can? You also mistake how intermittent sources of electricity can work with baseload; wind operates as a means of conserving water in the company’s hydro portfolio, reducing the network’s reliance on water supplies, or at least enabling the peaks and troughs to be smoothed, therefore increasing supply security. However, it doesn’t mean the economic model we currently have suits the way forward. For example the power cos are too reliant on marginal price spikes for their profits now, in other words the system now relies on supply crunches to boost power companies profitability… hardly ideal.

      1. I think your comments about Huntly are more due to a glut rather than a long term decline in profit from burning gas. Hydro stacks up as a cheap form of generation provided you dont include the significant externalities. The power company requires the water as a free input. But nothing is free. Everything has an opportunity cost. Managing rivers and lakes most effectively for hydro means adverse effects for recreational users potential agricultural users and for Iwi who certainly don’t consider that their river is owned by a power company. Using hydro as a backup for wind means even more extreme river management. Internationally wind has greater benefits as a sporadic substitute to fossil fuels such as in Denmark or even as a greenwash for the use of nuclear such as in the UK or Netherlands. Either way wind requires some other station on standby which raises its cost per unit. In my view we already do well on renewables but like anything there will be diminishing returns. In some cases it will probably better to burn fossil fuels and just accept it.

        1. We already manage hydro cleverly, that’s one of the reason the power cos got into wind. Yes Hydro has externalities but we have already [largely] paid those by building the dams we have. I do not see us building many or any more. There are also other ways of smoothing intermittency; there is not the need to have a one to one replacement of every wind turbine with baseload. We have our own geographic spread and hydro assets unlike Denmark which is usually covered by one weather system so needs to balance its considerable wind generation with Norwegian Hydro. We do need a smarter grid and a better distribution model, but we’re in a great position.

          If gas and coal gen is so profitable and renewables so shakey then why isn’t Genesis running Huntly round the clock and kicking over wind turbines in a weak demand market?

        2. Didnt say existing renewables were shakey. I just disagree that the externalities of hydro are a sunk cost, they are ongoing. There are plenty of examples where hydro dams have been removed to restore the environment because people have decided the costs of the dam were greater than the value of the power they generated. My concern with the privatisation we are going through is that it removes the opportunity for us as a nation to question the value of each dam, many of which were pushed through in a development fervour. A man who was a very good friend of mine once got sent to the Buller river to evaluate it for hydro. His report stopped it in its tracks and recommended leaving the river in its natural state. (his last job for the dams department of Ministry of Works). My other point is that wind is fickle so you have to have some form of generation in reserve, that comes at a cost.

        3. That is an interesting article. I think active control is using wind to be the part that fills in the peaks and troughs. You still have to have capacity for the days that the wind dont blow. In our case that probably means gas turbines like Otahuhu.

    2. The Ministers of Finance (both Cullen and English) were as demanding of dividends as any private investor. It was Treasury’s demand for a good return on revalued power assets that has pushed up the price of electricity.

  5. What does ‘renewable” mean over the long term? My understanding is that hydro lakes silt up eventually, and if you believe people in Rotorua the geysers there aren’t as active as they were 50 years ago. Wind turbines have a finite lifespan, as you see in California where there are vast areas of abandoned old turbines. So in 100 years, will we have depleted our geothermal wonders and turned every one of our rivers in to a series of silted up old dams? And will our hills be covered in old turbines, like a modern-day version of Cornwall where the old tin mines litter the landscape.

    Regardless of the long term, I don’t know how you’d almost double our hydro output without destroying pretty much every river in the country. I like rivers and would prefer to preserve them. I don’t know if the arguments ever went any where, but even back in 1990 American environmentalists were discussing removal of some hydro dams that had a significant negative impact on rivers and their ecosystems. The dams on the Columbia River seemed to be the main target, partly because of their effect on fish spawning.

    1. Yes I agree about Hydro, we’re pretty well done in NZ I hope. Geo [the hot rocks don’t run out of heat], distributed solar, and lots more wind can still do it. NZ’s land based turbines are among the most efficient in the world, and can have a high degree of geographical distribution on our long thin and exposed country- greatly ameliorating the impact of windless periods, and of course it balances our in place hydro estate well. Also, I think they look great; beautiful kinetic sculpture. Certainly beat damming rivers or burning FF in terms of environmental impact.

      Also remember demand is not growing as we finally get round to insulating our buildings and take advantage of less power hungry technology like LED lighting. Oh and that old smelter looks like it’s not going to be using so much of our existing Hydro resource before long. I wouldn’t be investing in any power cos reliant on Thermal too much.

      GDP growth and energy consumption growth are decoupling, thankfully: Important not to be captured by backwards looking thinking in the energy field as well as the transport one! In the 20C energy consumption, Vehicle KMs Travelled, and GDP all marched in step. This is increasingly no longer the case.

      This resource, renewably electricity, will grow into an increasing important competitive advantage as the years go by. Some form of carbon pricing pressure is certain to grow internationally.

    2. “My understanding is that hydro lakes silt up eventually”
      With a solution bordering on the trivial..

      “Wind turbines have a finite lifespan”
      That does not render the energy source non-renewable.

  6. A few points:

    – Why is this on a transport blog?
    – No Solar or Tidal is included. I assume this is because it isn’t economic yet.
    – All the recent new generation has been renewable (wind and geothermal) so this is already a trend. Closures have also be non renewable and this trend is expected to continue.
    – Large scale Hydro is very difficult to get consent for. This will be one of the biggest issues in reaching the target.
    – Regarding peak loads, smart meters may be part of the solution, either from a consumer price perspective (higher charges may drive change in habits) or load shedding technology control (turn off hot water, air con units etc or business (large timber mills etc) getting paid not to use power (ie. a kw not used is a kw that doens’t need to be generated))
    – PHES is this the best solution for power storage? (I think it is) but this may change.

    In conclusion, I think we are heading in this direction anyway and new technology will help us along as it is developed. I dont think we need any special directives to make it happen and any push to do so will not be cost efficient.

    1. Hi Harvey, some good points here and in your next comment. Re: your first point, this is on a transport blog because of the linkages between different energy sources. Transport is of course dominated by oil, but there are electric trains and buses in the mix, and perhaps cars too in the future. Emissions are also an important consideration, common to both the transport sector and power generation. Plus, on the blog I and we are also interested in other wider issues besides transport, including urban form, energy use and so on, all tying in in a loosely connected jumble. A more compact city, which we’re generally in favour of, tends to reduce electricity demand, etc.

    2. “- Why is this on a transport blog?” You think transport and energy are not related? It is clear to us that they are intimately related.

      Anyway, we will run whatever we feel is relevant. We have entered into no contract to limit our discussions nor, I might add, host every opinion.

      Having said that, I see you settle in to the issue well!

      1. Damn, does that mean you might choose not to run my guest editorial on a monorail for Auckland? Oh well, there’s always the Herald.

    3. Re: your conclusion, my opinion is that we’re not moving in the right direction fast enough, and it’s generally acknowledged that we won’t meet the government’s 90% target. In which case you can either say, oh well, it wasn’t worth trying for, or you can consider policy shifts which move us towards those goals. In the long run, I think the latter is a much better option.

      1. Not moving fast enough – sure but there is no point decommissioning an existing plant before the end of its useful economic life.

        May need to be reconsider if they decide to refurb rather than mothball but I understand Huntly is on the way out and the otehr gas ones are likely to only be used as Peakers going forward.

    4. On a cold winters night, I doubt if smart meters will have much effect. Auckland has had load shedding for hot water for 60+ years but this had been negated by a move away from 1 large Hot Water cylinder to distributed hot water devices.

      Large timber mills are not easy to turn off, they are designed to run 24×7 and have to pay staff 24×7.

      1. What’s your point? Water flows through dam turbines at night, air blow through wind farms? Are you arguing against some image of NZ being powered 100% by solar? Who is proposing that?

        1. I mentioned a smart grid; which is much more than smart meters, being a more flexible and multi-poled distribution network more capable of sourcing and delivering supply in multifarious directions because of a more varied and distributed supply and demand context.

  7. This also only considers the generation side. Most of the newer thermal (ie. gas) generation is close to Auckland. Why – that is where the power is use and reduces transmission issues (transmission loss and capacity contraints).

    If Tiwai closed, the issue with using that excess power is getting that power to where it is needed – Auckland! It isn’t as easy as turn off Huntly, plug in Manapuri and the system automatically balances it all out.

    Is there any (significant) generation north of the Auckland CBD? In fact 1/2 the population is probably north of the Otahuhu power stations.

    1. Ah, yes, great opportunity to turn Dunedin into a geographically secure and renewably powered centre of data storage don’t you think? Send those surplus Tiwai electrons up from Bluff and market beautiful Dunners as a vast data back-up zone. Probably need another transPacific fibre cable and to get out of our spying agreements with Uncle Sam…. [but that really is off topic!]

      1. We would need more than Google, Amazon and Apple to decide that Dunedin would be great for data storage to replace Tiwai.

      2. Our problem in data centres is hanging on to the ones we have already. Some of the ones being constructed overseas have 50 times the floor space (or more) of even the biggest NZ facilities, with all the associated efficiencies. Even NZ government agencies are starting to host applications overseas to take advantage of the price benefits. We’re a long way from the rest of the world in terms of telecom links, and our unstable geology doesn’t help us look great for disaster resilience.

        For a variety of reasons, NZ has developed a largish number of small data centres. People seem to think there are advantages in having them local to some very small markets, like Christchurch. The default for government work is having a redundant business system hosted in both Wellington and Auckland, and I’m confused why these two cities are always specifically named as the required locations. In my ideal world, NZ would make do with two large world-class facilities. They’d both be close to the submarine cable landing locations. They’d be close enough together to allow high capacity low latency cross-data-centre communication. And both would be in semi-rural areas with plenty of space to grow.

    2. There was a 200MW tidal scheme planned for the mouth of the Kaipara Harbour, but it was cancelled last year. Transpower would have needed to do grid upgrades for that, too, for Auckland to be able to get that power.

      1. Smaller wind farms that 200MW are connected and probably more remote. My guess is the business case didn’t stack up on more than one basis.

        1. To speculate a bit, I think it’s a combination of demand not rising as fast as before, and the end of the thermal generation ban making gas plants a new option. It seems pretty obvious that government policy needs to change to make renewables happen, by making the economics more attractive. As long as thermal generation is getting a free ride on carbon emissions and a streamlined consent process compared to renewables, renewable market share isn’t going to increase.

        2. Demand is one part of the business case. My point was that it wasn’t the transmission issue alone that killed it (it wasn’t clear from your post if that was what you were saying – your later post suggests that it wasn’t).

        3. It was both points. Yes, building north of Auckland still comes with a cost in upgrading the grid – but there hasn’t been very much thermal generation built since 2008, either, north or south.

  8. HS, one of the reasons this article is here that JP has been doing a series. This is to reinforce the argument that more electric vehicles in NZ will reduce our overall oil dependence and that we can still power them with renewable energy.

    I think private solar is viable to reduce burden.

    1. To try and get this back onto topic of transport 😉 an interesting article (now behind the paywall) about hybrid cars and how the modern turbo diesels are actually more fuel efficient:

      It probably doesn’t help that the premium brands are using hybrid to up the performance rather than to get fuel efficiency. Note I am a big fan of the Tesla so I am not a one eyed petrol head.

  9. None of this looks at installing solar panels on roofs to reduce demand for hot water. This all supposes big government solutions for small users, which is inefficient. If solar hot water achieved 90% of households what effect would that have on demand across the country.

    1. Why solar? I have instant gas hot water.

      I also think heat pump style hot water is also extremely efficient.

      1. Heat pump hot water is apparently as efficient overall as solar hot water. We installed an econergy system at out last place and in the 3years we had it, we were very happy with it. Cut our power bill by a significant amount.

    2. I looked at solar panels. It was a big win for the power company and a big loss for me. I dont much like power companies so I wont be generating electricity and selling it to them below cost. As for solar water heaters they don’t seem to have a return period. ie you never recoup the initial cost.

      1. Really?, either your math is out or you’re paying too much for your kit. In my case solar hot water stacks up real fast [so it’s in] and PV only did if the capital isn’t borrowed. Which is to say that the return is better than cash in the bank, but not good enough to cover interest. But that was 5 years ago, haven’t checked it since, and panel costs have come down.

        1. Hi Patrick. People who scored the government subsidy for solar water heaters got an average NPV of +$395. Not huge but positive. But for the government the NPV was -$4766. (Ministry of Economic Development Evaluation Study of the EECA Water Heating Programme Stage 1 – Evaluation of the Policy Case for Intervention by PA Consulting Group 27 January 2012) That is one of the reasons they killed the scheme. Part of the problem for larger systems is they were sold with a claimed return period of 15 years but many people who installed have found their system didnt last 15 years, so no payback. There is plenty to read here . The biggest problem is the high initial cost. The problem with PV panels is you generate at a time households dont need much and dont generate at times when you do need it. The power companies have a comparative advantage at supplying households so you may as well buy it from them. I really wanted it to work for me to be more independent but the numbers just dont work.

        2. The problem with PV solar is that if it is grid tied (ie. no offline storage) there is no saving in distribution, transmission or retail costs (you still need a retailer to buy from and to sell to). As such you are only saving generation at the times of the day it is cheapest, yet still requiring that investment at peak times.

          So really, any savings you have are free loading of those that are actually paying their fair share of the network and generation cost. And since only middle to rich people can afford a $10k+ system, it is a rich persons subsidy.

          PV solar for schools or day time businesses are a different story.

        3. I absolutely agree. Especially for schools where their demand matches the sun. I concluded that for a house it was only worth putting in enough capacity to run the house during the day, and because that is not much it wasnt worth the installation cost. The idea that households can generate and make money selling it to power companies is just mistaken. Also if the power goes off so does a grid tied solar.

        4. Got to be clear to distinguish between hot water [that does have on site storage and therefore ‘timeshifts’ energy] and grid tied PV. The former very clearly stacks up and later is case dependent; like you say schools and especially any aircon or freezer running businesses.

          A year old now but check out these numbers from Australian cities. Aircon and distributed PV are a perfect match and the power of peak smoothing to save billions and billions in over building huge centralised generation capacity is a game changer. Especially for big coal who are spitting tacks over losing the case for endless sums to build and burn for these disappearing peaks:

    3. I agree with you Peter, I have installed solar power in my home & manually turn off & on two of my 3 hotwater cylinders daily, so as to heat water during sunny hours.Government in the past have subsidised water heating of water.Why not do it again for those who install solar photovoltaic panels upon roofs & run the new electric trains in Auckland during the day by solar panels over the train lines in the most open areas to collect the most sun.My power cost is much lower, it would be even better if I could find a way of storage, that is not just battery, as this is high maintainance cost.Best wishes to all for a great new year & fortune from saving.

  10. Surely the bigger question this blog raises is do we actually want to transition to 100% renewable energy? Why should we care if we get to 99% or to 85% or even only to 70%? Non renewables are not a sin. If we build in carbon costs fully then why shouldnt they be an option? For example what if it make sense to build a small gas turbine on the West Coast and use coal gas and sell the coke to steel makers? Maybe that might be more efficient than sending the coal overseas while trying to create renewable energy from a dam on say the Mokihinui? This 100% thing smells of ideology and absolutism. Provided costs and benefits are weighed up I dont care about international bragging rights just as I dont care if my power comes from oil, gas hydro or geo-thermal. I do oppose carbon free nuclear power and I oppose renewable whale oil.

  11. Remember that people will start switching to electric cars soon as the fuel prices continues to climb. So having renewable energy will be important.

    Also, what happened to the cook strait tidal project?

  12. The issue with geothermal is that it’s green cridentials can be questioned, especially when it comes to getting rid of cooled geothermal water. This contains very high amounts of heavy metals and the like. Although the practice of reinjecting is generally required as part of consent requirements these days, you will find that one power company still outlets into the Waikato (hardly green). Land subsidence is also an issue (some areas of Wairakei near Taupo have subsided 18m – yes 18 yes meters). Why isnt geothemal more prevalent? Well it isnt just a matter of sticking a well in the ground and getting heat, much more complex than that, also there is only the taupo volcanic zone that has shallow sources of high enthalpy (ie concentration of heat). it really isnt ever going to be more than a few percentages of our electricity output.

  13. If half of us put solar panels on our homes and businesses, NZ would be 100% renewable easily. But the electricity industry doesn’t like solar, as it reduces dependency on their industry and lowers their profits.

    1. Yes but the cost of our power would be increase by a huge amount. Most of us dont have a big demand at lunchtime and early afternoon when the sun peaks, instead our peak is 6-7pm in Winter when solar doesnt work at all. There is really no point generating at a cost of around 35c per unit to sell it to the power company for 3 to 15c per unit. We have to accept the power companies have a comparative advantage at generating power at 6pm and what ever you do will not be competitive. I agree with solar we could get closer to 100% renewable but I simply ask why? Being 100% renewable is promoted as being better and that is the assumption of the post but why is it in any way economically or ethically superior to fossil fuels provided we pay the cost of carbon?

      1. > pay the cost of carbon

        You can’t buy your way out of climate change. Emissions trading schemes and carbon taxes don’t exist because there’s some monetary cost we have to pay for. They only work as an economic incentive not to emit.

        Whatever the “cost of carbon” is, if you’re willing to pay it for all the carbon we emit today, it’s too low. We need to actually reduce emissions, through some combination of both reduced use of energy and non-greenhouse-gas-producing forms of energy.

        1. Actually I thought that was the point of emissions trading schemes or carbon taxes. To include the cost of the carbon you emit at the cheapest cost of someone reducing their use by the same level. That way your emission can be offset. In a trading scheme that is done directly by buying a credit off someone who has reduced carbon by that level and in the tax system through making sure that your choice to emit is included so you compare alternatives correctly. As for your last sentence my answer is we dont need to adopt all technology that reduces carbon regardless of the cost. The whole 100% renewable thing is just more slogans dreamt up by numpties. The real point is to make sure people make good choices that include all costs and to incentivise someone to reduce carbon not to make us all reduce carbon production regardless of cost.

        2. > To include the cost of the carbon you emit at the cheapest cost of someone reducing their use by the same level. That way your emission can be offset.

          That still requires someone else to actually cut their emissions. Which isn’t happening under the current ETS. The current trading scheme is a pathetic joke. It doesn’t much constrain emissions. It doesn’t link with other countries that are trying to make meaningful change. And it exempts big chunks of even the New Zealand economy.

          New Zealand is one of the best places to do wind, hydro, geothermal and tidal power. Electricity generation is one of the easiest energy uses to do in a low or zero-emissions way. It has lots of proven technologies. A real ETS or an aggressive carbon tax would actually cut emissions, and it seems pretty likely that electricity generation would be among the first to change.

          I agree with you about the drawbacks of solar. Wind, tidal and geothermal are still good options for NZ.

          But climate change requires someone, somewhere, somehow actually emitting less greenhouse gases into the atmosphere than they do now. It’s worth thinking about who is going to do that. You can’t just say everyone will “pay the cost” of carbon and continue business as usual.

        3. Steve you are on the mark here

          Fundamentally, we have to cut emissions, not trade and hope someone else might cut theirs. They need to cut theirs too of course.

          We should be leading the charge.

          And (to Lin) I don’t see what this has to do with the green party or party politics in general. Encouraging the de-carbonising of energy (and hence, transport, to the extent that it is feasible) is simply taking a prudent approach to long risk management. It’s also inherently conservative, in that it is about preserving our way of life for the next generation.

          If anything, distributed generation is anathema to centrally planned, big government socialism, which tends to favour state controlled electricity along with everything else. Just like NZ transport, there’s a bit of an Alice in Wonderland look and feel to energy politics when the so-called free market parties line up with big box suppliers rather than consumers..

          Steve, yes NZ is literally awash in untapped renewable potential.. though I’d put them in order of feasibility as wind, geothermal, solar and tidal. Of which solar and wind are abundant.

          Tidal is arguably abundant too.. but the problem with tidal (as well as still being very technologically challenging) is that while it is entirely predictable, half the time it does absolutely nothing for peak demand. In that sense it’s a little like residential PV solar, only worse because it’s not distributed.

        4. “But climate change requires someone, somewhere, somehow actually emitting less greenhouse gases into the atmosphere than they do now” I agree that is the nub of the matter. The problem with carbon trading as with all missing markets theory is that people cheat it directly such as creating industrial gases just to destroy them and claim a credit as has occurred in China or indirectly by setting 1990 is a base year so UK and Europe could claim dibs on the pollution they had already set in place. My point in opposition to 100% renewables is that each additional point above 70% will cost more and more as we run out of the lower hanging fruit. It might be cheaper for a country with hardly any renewables to change rather than us to get from 70% to 100%. We need a system that recognises that rather than requires us to make poor investments. 35 years ago energy self sufficiency was the goal and we are still paying for that madness. Imagine if the best years of Maui had not been squandered how much better of we would be now.

      2. I do have solar water heating and of course we don’t have to shower during the day: insulated hotwater cylinders are very effective at ‘timeshifting’ that energy to later at night.

        And those with grid tied PV are effectively supplying the aircon and other drawdown of the business day, in exchange for supply later.

      3. I don’t think you understand how solar power works, you can use it 24/7. There are people paying nothing for their electricity, and some even make money from solar, by selling their surplus to electricity companies.

    2. Electricity companies are still expected to provide electricity at night. Most of the cost of electricity is in the capital cost. If the station sits unused all day it still has same costs of depreciation and cost of capital (or interest) as if was being used. Much of your bill is transmission costs which are also fixed. It costs Vector the same whether the power is going into your house or out of your house.

      1. If you can have a hydro station ‘unused all day’ as you put it, it is reserving water for when it is needed. Using assets variably will be increasingly part of the mix. The sunk cost in paused plant is set against the relentless cost of constantly fuelling thermal plants. Swings and roundabouts.

  14. “You might consider a “pumped-hydro energy storage” (PHES) system for some plants… you use some of the excess hydro energy to pump water uphill, into another reservoir. During high-demand periods, you let it flow down again, delivering more energy to the power plant.” Is there a way for this to be of value without breaking a law of physics about conservation of energy? Unless you can get >100% efficiency from your hydro turbines, any stored energy gained from pumping water up the hill would be less than lost from the lower lake in generating that electricity. To be useful, PHES would require some other source of electricity that was otherwise not able to be consumed to be used for the pumping. May be more suited to countries with plants with large producing capacity that can’t be dialed up/down quickly to suit demand (e.g. especially nuclear, or perhaps wind if you anticipate reliably windy nights that produce more electricity than can be used).

    1. Hi Sam, perhaps I shouldn’t have had the word “more” in there… of course there are efficiency losses in the process of pumping water up the hill and then back down again, but you pump it up when you’ve got surplus generation (so it’s “low value” per kWh) and let it flow back down when you’re short on generation (so it’s high value).

    2. Surely using solar or wind to power the pumps to take the water up into the reservoir is the answer?

      You just need to place wind turbines or solar panels around the area where the hydro dam is. Then it doesnt matter when the wind blows or sun shines (as it doesnt matter when they pump water up into the reservoir) and the loss from transmission is almost zero as they are so close. If the reservoir is full then divert any energy produced from the wind and solar to the grid.

      The reservoir basically becomes a huge battery storing gravitational potential energy.

      This is currently being trialled in Wales ( and a lot of people are discussing it ( It seems like a no brainer to me.

  15. Christchurch already has a variation of PHES. Water is pumped from aquifers into reservoirs on the Port Hills at night when power is cheap and the grid is underutilised. During the day gravity supplies the mains water pressure. Potentially this concept could be used to provide distributed PHES, reducing the need for transmission line upgrades.

    1. Many proponents of PV do themselves and the public no favours by failing to make apples-to-apples comparisons.Given the typical configuration of the bulk of installed PV in the US the cost of such power at night is essentially infinite. Calculating a levellised cost of energy when the production of PV is not physically levellised is disingenuous.

      “Citi says the key metric in comparing power sources will be the levellised cost of energy (LCOE)”. Citi is incorrect. The cost of each type of power when power is most in demand will be the key metric. Failing to understand the difference between power and energy seems to be a recurring theme.

  16. I feel like leaving out solar is a big mistake. Solar is on a much more aggressive price curve compared to wind, so it could start to be a major player in the 2020+ time-frame in NZ. While I acknowledge the valid concerns about time of generation being an issue, and then needing a separate storage/peaker system which increases costs, consider using electric car batteries as that form of storage which adds no cost to energy suppliers. Charge them up at work during the day when solar generation is cheapest, then at night when you get home with your +50% capacity battery, discharge back into the grid during the peak time before then recharging at night for the lowest cost.

    1. Hi Jacob, I did do another post on solar here I’ve tended to be quite negative on solar in the past, but my view on this is changing – as you say, the costs of solar are plummeting right down. Give it another 5-10 years, and we could quite possibly see solar panels popping up in a lot of places. I don’t think it will ever do much more than take the edge off our power demand in NZ, but it could still have an important role.

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