The fund charged with helping out with our future pension requirements is teaming with a large Danish renewable energy infrastructure firm to look at creating a massive wind energy development offshore in the South Taranaki Bight.
NZ Super Fund and Copenhagen Infrastructure Partners (CIP) have formed a jointly held company to manage the feasibility study and development of the project. The feasibility work is expected to take about 24 months.
Minister of Energy and Resources Megan Woods has said that Government would begin work on a new regulatory regime for offshore renewable energy in 2022.
A jointly issued statement from NZ Super/CIP said that subject to feasibility, an initial planned 1GW development would be created.
This would represent over 11% of New Zealand’s current electricity demand capacity and could power over 650,000 homes.
"The partners believe the project could later expand to 2GW, helping to meet strong projected growth in demand for electricity in New Zealand," the statement said.
As some means of comparison, Mercury's Turitea wind development near Palmerston North is slated to be the biggest in the country when finished - at 222MW. So, any NZ Super/CIP development would dwarf this.
CIP and NZ Super Fund are said to be in the early stages of project feasibility evaluation, which includes wind resource measurement, designing detailed environmental impact assessments with the support of local communities and experts, and examining industry potential and training needs for the Taranaki region.
"The partners will also focus on measures to ensure any project can coexist with other uses of the marine area," the statement says.
Should the project proceed, and subject to relevant regulatory approvals, CIP and NZ Super Fund could deliver power by the end of the decade, making a significant contribution to New Zealand’s ambitions for 100% renewable energy by 2030, the statement says.
There's no potential costings given of the project.
NZ Super Fund chief executive Matt Whineray says offshore wind energy has the potential to be an attractive commercial opportunity "that aligns with the NZ Super Fund’s climate change investment strategy and focus on sustainable finance, as well as its desire to invest in large-scale New Zealand infrastructure".
“We are in the unique position of being able to attract best-in-class global partners on infrastructure developments that create positive environmental and social outcomes while delivering financial returns for New Zealanders through the Fund. We are delighted to be working with CIP, a global leader in green energy transition.
"The climate crisis is driving a global shift in how countries produce energy. We are focused on opportunities that allow us to apply our long-term investment capital to support this shift and the Fund’s own public commitment to being net zero by 2050. While this proposal is still at a very early, exploratory stage, we are confident it could help New Zealand’s transition away from fossil fuels and towards home-grown clean energy."
CIP has about NZ$25 billion of current assets under management. It is the global leader in greenfield renewable energy and offshore wind including approximately 30GW of offshore wind projects under development, construction and operation across North America, Europe, Asia and Oceania. CIP’s investment in the South Taranaki project is part of a broader project development pipeline for CIP’s upcoming flagship fund ‘CI V’.
This project will be CIP’s first investment in this country and follows the Super Fund’s NZ$208 million commitment to CIP’s new Energy Transition Fund (CI ETF I) last year.
59 Comments
This is great news and very exciting.
The main issue will be ensuring we have enough reserve frequency generation on land so this investment could not be made unless there were collaborative investments in storage or other on-demand generation on land.
Really good to see our retirement savings being used to invest in the future of this country.
Great news for nz consumers.
Regarding reserve frequency generation JAO our current large hydro fleet with fast instantaneous reserves and frequency keeping should be able to manage this no problem. Wind is the perfect mix for our hydro portfolio. Water in lakes are the best storage system you can have
Good point, we are lucky to have that resource for sure.
However one thing to keep in mind is that on a dry year in the middle of winter we still need Huntly for frequency support, don't forget that frequency is affected by grid draw not just rotating mass.
The size of the Grid is set to double over the next 20 years or so, the existing luxury of an out-sized hydro capability will become less impactful given the additional draw from transport and process heat. We won't be building new hyro so that increased capacity will be that much more variable green tech.
Why would you put it there? Send the power down south to charge the battery, only to send it back up north where most of the demand is? The smelter is already well served by the hydro down south.
Batteries should be close to load centres for efficiency, may as well have transmission losses before storing the power so the battery has higher effective capacity.
Definitely unlikely without a restructure of the electricity market. The whole point of the investment is to make money, which means they won't build it if it doesn't earn. I'm not liking all the "must run" generation being built - it will cause huge spikes in power prices as the demand generators look to recover their ROI from plants that aren't getting run as often.
the high capacity lines already exist, there is ample industrial space at low cost becoming available in the same timeframe, and new storage technologies coming available
https://newatlas.com/energy/molten-salt-battery-grid-scale-storage-low-…
We need more (20x more) of this - https://www.stuff.co.nz/environment/300534634/huntly-set-to-be-the-home…
I agree, it's plenty windy there, relatively shallow, and reasonably close to load centres. Hopefully being offshore means it won't get as bogged down in resource consent delays like the ones on land. It should reduce the reliance on Huntly, but I imagine we will still need it as a backup for when the wind's not blowing unless we can get a nice big battery in place.
Morepork. Our comprehensive hydro schemes provide all the storage we need. I see no need for batteries in the nz grid personal. Between wind, geothermal future development, smart grids etc our electricity security is safe.
Large scale projects of this size are a great news for energy security and prices
They provide very useful storage and buffering for intermittent supply in the short term, but not enough for long term storage to cope with a dry year like we had in 2021. Batteries probably wouldn't fix this either, of course. Currently our dry year backup is a big stack of coal at Huntly, Lake Onslow might be a more elegant solution which would dramatically increase our storage.
Haha I thought you might say that. It's worth having a look at. Looks like Bitcoin is here to stay and there are a lot of similar innovative projects happening worldwide where mining Bitcoin can drive construction of renewable energy projects that are distanced from their consumers.
Not really, in heavy industry, it almost certainly will have it's place IMO for the advantages of quick refuelling (fast turn arounds) and efficient economies of scale in storage. Energy losses will always be above direct to battery, but with this process hopefully coming online, it should hopefully come close to being viable. A large scale hydrogen plant (like those being built around the world), could provide a Huntly like backup situated in the North Island and essentially make such a windfarm non-intermittent. Additionally it could serve as NZs Hydrogen distribution point, if we end up with trucks/trains/planes running on hydrogen.
Certainly hydrogen doesn't work for consumer scale applications where batteries win, but that's not what I am talking about here.
Battery swap systems for trains/planes/boats... I haven't seen anything that's viable yet. And with battery prices skyrocketing it starts to change the game quite a lot... the huge batteries required for heavy may make the use of batteries a significant barrier. We would need to have a sizeable improvement to battery tech to overcome these two hurdles. And I doubt they will ever be viable for mass transit airplanes, energy density of hydrogen will likely win out.
Agree for the inefficiency, essentially we would have to overbuild our power systems to create a backup power supply. But hopefully we can have some good breakthroughs like the Aussies just came up with that change the game.
Liquid (bio/synthetic) fuels will still be the winner for aviation and shipping. They will be more compatible with the existing infrastructure and much higher energy density. They use hydrogen locally in their production, but no need to compress it to stupid pressures, or refrigerate it to give it useful energy density. No handling or distribution issues either.
Hi JohnTrz.
Hydro lakes are our battery backup. It has both base load and peaking capabilities. There is always a need for more base load generation which I think geothermal has great potential. The use of intermittent generation such as Solar (roof tops not productive land), wind and smart grids we can flatten or generation usage and not drain the hydro system in dry years. Eg when the wind blows and sun shines the hydros just reduce to minimum run of river flows. When the wind stops and no sun the hydro ramp up output and meet the needs. We are in a privileged position in this country and we should continue to leverage it, and use technology to optimize it.
Fantastic! But it will likely be added to the long list of other wind farms that get consent, but never get built... because too hard (see almost every infrastructure idea in the country).
Hence "There's no potential costings given of the project." and not generation cost estimate given. What backrooms deals are being given so he project is profitable to the investor.
Let's follow Germany's lead - though we would struggle to get 50% of our gas from Russia and fund a war in Ukraine.
"Here are the two main findings from EP's analysis:
-
- Had Germany spent $580 billion on nuclear instead of renewables, and the fossil plant upgrades and grid expansions they require, it would have had enough energy to both replace all fossil fuels and biomass in its electricity sector and replace all of the petroleum it uses for cars and light trucks."
https://www.forbes.com/sites/michaelshellenberger/2018/09/11/had-they-b…
The beauty of a coastal location, is that apart form a prevailing westerly, you always get the morning and evening winds, caused by the different cooling / heating rates of land and sea. The wind will certainly vary , but the notion of no wind at all on the coast would take some unusual circumstances.
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