Heightened imports of biofuel will be needed for any significant “greening” of New Zealand’s electricity supply, according to a new report.
That's because domestic sources of biofuel are costly or impractical ways of generating the 15% of New Zealand’s electricity useage that doesn’t come from existing renewable sources.
The report casts doubt on the viability of the previous government’s plans to make electricity 100% renewable by 2030. This plan was subsequently dumped by the current government.
The report was written by the consultancy, WSP, for the Ministry of Business, Innovation and Employment (MBIE).
It was released along with over 40 other documents related to the NZ Battery Project. This project had been commissioned by the previous government to find ways to plug the supply gap when calm weather idles wind turbines and poor rainfall leaves hydro dams low. The now-dumped pumped hydro scheme at Lake Onslow dominated this programme.
But the team behind the NZ Battery Project investigated other schemes besides Lake Onslow, and so-called green peaking plants were among them.
These would be switched on quickly to meet peak demand for electricity when so-called base load generation is insufficient. This would typically happen at 6pm on a freezing night in winter, when heaters, TV sets and electric cookers are working full blast throughout the country.
Traditionally, gas-fired peaking plants have been used to plug this gap, along with the big boilers at Huntly, which burn a lot of coal. But why use fossil fuel? Surely, clean fuels could be used in peaking instead. One option would be hydrogen, which comes from water and is turned back into water after combustion. Alternatively, hydrogen can be “stored” in ammonia, which is later “cracked” to release the gas.
Other renewable fuels are made from plant matter. They are carbon-neutral, since the CO2 released during combustion was absorbed from the air during plant growth earlier.
However, the WSP report suggests using biofuels for peak electricity use is easier said than done, for reasons of expense and practicality.
In their report, the WSP writers assume total capacity for peaking plants would be 800 megawatts, or half as big again as the Benmore Dam. They would have to be fully workable in less than an hour and be able to run continuously for over a week. The writers looked at 11 different classes of green fuel, such as green methanol, and methane from biogas and found faults with 10 of them. Only imported ethanol made the grade.
“Methanol is not considered further because it is unclear whether an international market exists,” the team writes.
“And while much methanol is made in NZ, it is all from fossil fuels. Methanol can be created from biomass, however this is not considered to be mature technology at large scale.
“Biogas is not considered to offer a sufficiently large resource, and the costs of accumulating compressed biogas would be significant.”
Ethanol produced locally from lactose is also discounted in the report. This is due to uncertain availability of lactose from dairy whey, as well as competition for land to grow crops for biofuel compared with using that land to grow food.
“While the processes for producing ethanol from corn or barley are well-known, both crops require use of prime agricultural land and compete for food production, and so are not considered a viable long-term solution,” the report says.
It adds that using enzymes to break down cellulose from softwood is possible but is considered technologically immature at present.
The report also finds fault with biodiesel, saying using it to fire an electricity peaking plant would produce very expensive power. As an example of the difficult economics of this fuel, it cites the closure of a biodiesel plant by Z Energy due to rising costs of its raw ingredient, tallow. And the report goes on to run down the use of hydrogen, either directly or via ammonia.
The report concludes that electricity peaking generators powered by imported biofuels are realistic, and says some infrastructure for gas importation already exists. But its capacity would have to be expanded, and the report has questions over reliability of overseas supply.
“Fuel importation carries a high risk of supply-chain disruption or of market trends that are outside NZ’s control,” the report reads.
“For an application requiring modest volumes spread relatively evenly, New Zealand can mitigate the supply chain risk with modest levels of stockpiling,” it says.
“But the renewability credentials of imported biofuels will require further investigation to ensure that 100% certified renewable biofuels can be sourced.”
Despite these niggles, the report finds general favour with the use of imported biofuels for peak electricity generation.
It says ethanol is imported already via the Port of Tauranga to augment motor fuel sold by Gull NZ. It is mainly sourced from sugar cane grown in Australia, Asia or Brazil.
It says future prices are hard to gauge, due to uncertain future demand, growing need for land for food production and unpredictable world events. However, it suggests 2020 prices will rise 20% by 2030 and 50% by 2065, over and above inflation.
The report did not look at transportation costs.
48 Comments
We rely on energy dense resources to convert to electricity, and those resources are slowly being expended. About time they look into subsidising home solar and micro-wind generation to take the pressure off the current generation and reduce the demand for large increases in generation capacity. At the very least this would reduce the need for larger scale plants to be build for a while and give the powers that be more time to plan, and see what new technologies emerge on a larger scale that may become more financially viable.
large scale home solar will only increase the need for utility scale peaker plants, as solar doesn't generate during the winter evening peak.
We could couple them with batteries, but they are uneconomic at residential scale. Utility scale batteries are a bit better, but nothing beats pumped hydro on cost.
I did some calculations on Onslow a year or so ago - achieving the same storage with Tesla powerwalls would have cost about $1 trillion and required about 160 power walls in every house in NZ. And then you have to repeat that capex every 10, 20 years or whatever the life span of a battery is.
Cost. "Covering dry year risks with batteries would involve spending $270b, equivalent to 87% of our annual GDP in 2019".
https://www.iccc.mfe.govt.nz/assets/PDF_Library/fe507ec27d/Final-ICCC-m….
This article isn't about solving the dry year problem? It is talking about a 800MW peaker plant.
Seeing as Australia can build grid-scale batteries with a capacity of 2.0 GW / 4.2 GWh with a total project value of AU$2.7 billion, then I'm sure we could get 800MW for less than $270b!
It's not just 800MW peaking:
In their report, the WSP writers assume total capacity for peaking plants would be 800 megawatts, or half as big again as the Benmore Dam. They would have to be fully workable in less than an hour and be able to run continuously for over a week.
The 2.0GW / 4.2GWh battery you cite would last for 2 hours at full bore. Discharging at 800MW it would last 5.25 hours. Just another 162.75 hours to go for a 7 day running time, or extrapolating out the $2.7B cost = $86.4B.
Pumped hydro is the cheapest way to store electricity over those time scales, and they've decided Onslow is too expensive.
Also note that batteries are *stores* of electricity that has to be produced first.
Since getting an EV I've spent a fair bit of time observing the proportions of energy from each source of generation throughout the day.
What I've seen is that on recent months the electricity from fossil fouel sources has been running fairly uniformly 24/7, whereas the hydro generation is going up and down massively. We're effectively using hydro as our peakers currently, and the fossil fuels are being used to suppliment the base load. If there was more water in the lakes they'd likely be doing it the other way around.
Anyway - if more base generation from renewables can be achieved, then hydro can continue to be the peaker. Particularly since the peak times are pretty predictable.
Dutton is pushing nuclear power in Aussie with some push back on his claims. I tend to think his position is not wrong except that he apparently fails to recognise that the new technology nuclear power plants are just that; new technology and thus far essentially unproven. Give those being built some time to prove themselves, iron out any wrinkles learnt when building and running them and then the positives might well be realised. Some level of caution would be warranted. For Aussie though, at least they can mine their own yellow cake.
The boffins need a field trip to Sweden or Waipa sawmill if they have budget constraints.
"The first Swedish district heating system was put in place in Karlstad in 1948, consisting of a combined heat and power plant for an industrial facility. Today, there are at least 500 systems put in place, with all major cities and towns presenting their own system."
https://www.araner.com/blog/district-heating-in-sweden-efficiency-innov…
Mindbendingly naff.
Clearly the authors have not heard of distributed generation. Probably just have not ever known anything but enormous generators serving small producers.
My bog standard solar and small battery have eliminated peak demands on the national system. Further I send three times the unit out the gate as comes in.
Think what our road of thirty houses could do for the nation with a collective sharing agreement using some smart IT and enabling law. Smooth demand, and also produce.
But that would not allow ticket clippers.
And some stupid government department commissioned and paid for this!
Who is forking out the $32 billion to stabilise the grid?
"Increased uptake of PV can cause microgrids to operate at critical values αc that are at the upper end of modern line ratings. These grids would be able to operate normally but would be extremely fragile to cascading failures. The installation of household battery storage, while increasing consumer self-sufficiency, does little to ameliorate this resilience problem."
https://www.science.org/doi/10.1126/sciadv.abj6734
https://www.bcg.com/publications/2022/climate-change-in-new-zealand
Only because of human behavior, you can have all the battery you like, but you can't stop the wife cranking up the dryer, hair dryer and heat pump. During the peak. But it's not a$32 billion problem, and it's not caused by solar, it's caused by the current demand habits.
Batteries can help, as can smarter management. People disparage the agreements with large consumers like the smelter to reduce use in peaks, but it is the cheapest and easiest way to solve the problem.
The problem (demand peaks) was there before solar yes, but solar makes it worse because solar generation is almost the perfect inverse of demand.
Totally agree about the demand management being a key element, rather than relying solely on peaker plants. But tiwai doesn't help there, the new demand management in the contract is more of a dry year solution "It won't help in an emergency as it takes 30 days to ramp down the smelter lines. "
Why not incentivise people to install solar and batteries at their homes, and then create a mechanism for paying them to discharge their batteries back into the grid at times of high need? Companies like Solar Zero are already doing this. Seems like something that we should have a lot more of.
Ethanol produced locally from lactose is also discounted in the report. T
“While the processes for producing ethanol from corn or barley are well-known, both crops require use of prime agricultural land and compete for food production, and so are not considered a viable long-term solution,”
Oh but if we import ethanol from overseas then it magically doesn't compete for the use of prime agricultural land for food production?
Or, do they mean it's ok if people go hungry, so long as they are overseas?
Lynemouth in the UK is a 400MW power plant in the UK that runs on 100% biomass since 2018. But yeah, couldn't do that here the technology is too "immature"
Good to know thanks, i couldn't find a lot of detail on that one. Drax has been burning local biomass for a while though, i remember seeing an interview with a farmer talking about how his input costs were low as you can use human shit from the sewerage works as fertiliser.
I've been looking at wood pellet boilers to replace our gas boiler that we use for space and water heating. But i'm really reluctant to commit when it seems supply is so variable. The capital cost is pretty high, and then you are at the mercy of the pellet supply. Apparently the cost varies wildly by region, so you might plonk down $10K for the pellet burner and then a year latter the pellet cost doubles.
I'll probably go for an air to water heatpump instead. Will try and heat the water overnight and again midday from the solar. And warm out the house in the morning and evening just before the peak periods to try and not contribute to the demand peak problem
Talking about electricity this just happened: https://www.rnz.co.nz/news/national/520075/live-tens-of-thousands-lose-…
Meanwhile our trading partners invest in the black stuff.
India will add more coal power capacity. The world’s most populous nation expects an increase of 15.4 gigawatts in the year through March 2025.
Sounds like the answer to cheaper energy and energy security is pumped hydro and renewables. Importing any fuel has its risks even if you stock pile.
"However, the WSP report suggests using biofuels for peak electricity use is easier said than done, for reasons of expense and practicality."
Interest's energy commentators in full swing. All electricity from renewables by 2030, definitely a pipe dream unless you want your electricity costs to jump by how much? A stab in the dark - at least 20%.
Some interesting ideas but highly likely to fail the financial smell test. So with these ideas acceptance of increased prices and not by the usual 5% per year, more like 10-20% per year.
My two cents worth about 20% and no more than 25% solar and wind of current installed capacity based on the current non wind and solar capacity. The 20-25% based on effective wind and solar capacity and not what the windmill can achieve in a howling gale or peak solar irradiance which occurs for about 2h max on a sunny day. High potential for rolling load shedding even under these conditions without adding more than 10% to your electricity bill.
Appears most of the commentators are well enough off to afford >20% electricity price increases.
The report did not look at transportation costs. Including the emissions for shipping imported goods... That is a pretty sizeable gap in the report. It is also one where we often have the clearest recorded information and it is critical to any comparison. Without the costs & emissions of logistics it is almost a comparison solely on the materials without any consideration for how they magically appeared at furnaces, you could almost say there are significant gaps as key in sustainability is the life cycle review from manufacture, transport, use, disposal, transport etc.
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