The Ministry of Business, Innovation and Employment (MBIE) says New Zealand must boost electricity production to meet future demand as the country transitions from fossil fuels to electricity.
The latest Electricity Demand and Generation Scenarios (EDGS) report from MBIE, released on Wednesday, shows wind and solar are the most likely sources to generate enough electricity to meet future demand long term.
EDGS is a set of independent scenarios that looks at future electricity demand and the generation capacity needed until 2050.
The Commerce Commission uses these scenarios to review Transpower’s future investment proposals for the transmission grid.
MBIE modeled five scenarios to capture a range of potential futures which included growth, constraint, innovation and environmental scenarios against a reference or baseline scenario. MBIE reiterated the scenarios were not future forecasts and shouldn’t be interpreted as such.
Public consultation over the 2024 report was undertaken over May and June 2023.
According to Wednesday’s report from MBIE, the growth scenario found short-term energy growth will be driven mainly by the commercial and industrial sectors, with electric vehicles (EVs) becoming a bigger factor starting in the late 2030s.
“Demand for electricity is expected to grow as existing fossil fuel use switches to electricity, higher uptake of electric vehicles, and new demand – such as large-scale datacentres coming online,” MBIE Markets Manager Mike Hayward said.
“By 2050, it is expected around half of all energy demand will be met by electricity.”
The report found electricity demand will rise by 80.9% by 2050, from 39.6 terawatt-hours (TWh) today to 71.7 TWh.
By 2035, 92.1% of New Zealand’s electricity is expected to come from renewable sources, including 45.7% from hydro, 20.3% from wind, 19.2% from geothermal, 5.6% from solar, and 1.4% from other renewables.
MBIE’s report projects generation from renewable sources will make up potentially between 96.3% and 98.3% of the country’s electricity by 2050.
Wind and solar power will likely be the main sources of new electricity because they’re getting both cheaper and better and MBIE expects new hydro and geothermal plants will also be built.
However, new gas peaker plants will be needed to ensure there is enough capacity to handle peak demand.
Gas peaker plants are plants that only work during high-demand periods to balance the electricity grid.
“The 2030s see considerable change in electricity demand and generation, with increased demand for electricity and existing coal and natural gas electricity generation capacity expected to retire,” Hayward said.
“While modeling shows increased renewable energy generation will most likely be used to meet the additional demand for the next 26 years, it also shows that gas will continue to play a role in providing support to the electricity generation market”.
MBIE said the amount of energy support needed in the system for peak demand varied by scenario, with better load distribution and more batteries reducing the overall capacity required in MBIE’s environmental and innovation scenarios.
Under the report’s reference scenario, electricity generation emissions were projected to fall to 2.5 million tonnes of CO2-equivalent by 2050 but ranged from 1.6 to 2.8 million tonnes in other scenarios.
MBIE said key factors included the closure of major thermal plants – with Contact Energy signaling its intention to close the Taranaki Combined Cycle gas plant at the end of 2024 – and the switch to renewable energy sources, with emissions expected to stabilise by the mid-2040s.
27 Comments
It isn't possible to "maintain what we have" with a declining and aging population that is exiting the workforce. As for population growth on this planet, we have no say over what India, South America or Africa does. Anglo countries all have fertility rates below replacement so that "population decline" you are talking about refers to stopping immigrants from coming into NZ. Labour and Greens will never allow that because racism.
Kiwi's are so kind to share the electricity with people like me. I do find them to be racists though and it is only because of us that they have a first world country. We are hard working immigrants and come here because kiwi is not clever enough to manage business or infrastructure. Without us there would be no electricity in this country.
1) What is the reliability and cost of establishing and maintaining offshore wind generation compared to other generation including grid connection?
2) What are the effects of turbines and infrasonic vibrations on livestock?
3) What is the reliability and cost of establishing and maintaining turbines on marginal hill side land and connecting it to the grid?
4) How is installing masses of solar panels going to be made profitable for farmers, commercial building owners and property developers?
5) How are we going to maintain good relations with China so that we can keep accessing their solar technology?
From published accounts in the UK, offshore wind costs about $400 a MWh - about three times the wholesale price power currently is. Look at the subsidies they are demanding to build offshore wind in US or Europe. That is why all the contracts are falling through with wind companies paying penalties to get out of contracts. And the firms are losing money.
As well, installation costs are going up not down. Reliability is going down and no-one wants to deal with the fact that much of the componentry isn't economically recyclable.
Plus when site componentry fails unexpectedly under stress it can place sudden demands on the grid causing other problems. The attitude that you can wave a magic wand and these renewables will just appear and start fixing our problems is little short of technical and engineering ignorance. Thanks for adding some technical and economic reality.
a bit more detail (not all bad but wouldn't hold my breath on the good)
https://www.washingtonexaminer.com/policy/energy-and-environment/244082…
THE BACKSTORY – ORSTED HALTS TWO NEW JERSEY PROJECTS: Orsted, the world’s largest offshore wind developer, cited higher costs and supply chain delays in announcing today that it is halting development on two New Jersey offshore wind farms, Ocean 1 and Ocean 2, that were expected to create roughly 2,248 MW in offshore energy generation.
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These conditions have prompted developers to renegotiate or pull out of contacts completely, all but ensuring the Biden administration’s 30 GW offshore wind goal by 2030 will not be met. Read more from Breanne here.
some good news
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MEANWHILE, IN BETTER NEWS FOR OFFSHORE WIND…: The Biden administration announced Tuesday approval of the Coastal Virginia Offshore Wind Commercial project – the largest commercial-scale U.S. offshore wind project, which is expected to provide roughly 2,600 MW of capacity.
If we take Meridian's Ruakaka solar farm as an example, that's expecting to produce around 150 - 200 GWh/year from a 172 ha solar farm. So with about 1 GWh per ha, 4 TWh of power would require around 4000 ha (or 40 sq km). That's assuming no improvements in solar efficiency, plus a not insignificant amount of this will be stuck on rooves - so compared to other land uses, not really that much. Lake Benmore alone has a surface area of 75 sq km, for just over half the generation potential (granted it does act as a battery to some extent which solar does not).
Turbines use barely any land for the power they generate and we may well end up with huge offshore farms, so not really a big consideration in the grand scheme of things.
This is pipedream territory.
Firstly, renewables are all solar in origin - if you put PV on paddocks, you grow less grass (It would appear some folk think we can have our cake and eat it to - physics doesn't work like that.
And GROWTH is over - it took energy to grow, and there ain't enough to peddle more. So this is displacement of FF, no more. And FF are currently 60% of our energy mix.
My guessing is that we will be having trouble even maintaining the existing grid, beyond 2030/35, and will be experiencing blackouts and regional separations. Projecting from back-casting is always fraught.
I am trying to not think about every power bill, that has ever been paid, every month for decades, by every household. As much as I try to understand why theres never enough capital available to expand generation output ,I am forced to conclude that theres no money to be made in having excessive output. Could it be that too much output is bad for business, it means cheap prices.....lol
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