New renewable electricity target achievable says analyst

Renewable energy will get a boost under the new government. Photo / Ross Setford

The new government's 100 per cent renewable electricity target is largely achievable, a leading energy analyst says.

John Kidd of Woodward Partners says new technology such as battery storage and the possible closure of Tiwai Pt would bear on the energy equation.

"I do think the 100 per cent renewable target is materially achievable. I add the rider 'materially' because there are likely to be site-specific pockets of demand where renewable options may simply not be feasible, but these might eventually be few."

Under the Labour-Greens agreement, all electricity generation should be from renewable sources by 2035. Up to 93 per cent of generation was renewable at times last winter and the former government aimed to have 90 per cent renewable electricity across the year by 2025.

Kidd said energy decentralisation was shaping as the dominant energy sector macro theme of the next two decades. Consumers would have much greater control over how their energy is supplied, including using solar panels.

"The key enabler to this is energy storage - in New Zealand's case more so than generation itself. Battery and fuel cell technologies are advancing rapidly and will become increasingly mainstream as their economics improve," he said.

Uptake should relieve peak demand-side stress from the network and therefore reduce the call on gas and coal plants to meet marginal demand.

There was also the Tiwai Pt "demand overhang" to consider.

"If Tiwai Pt was to close for whatever reason, then it is highly likely that a significant wedge of existing thermal plant would be retired. The irony therefore being that closure of one of the nation's largest industrial sites would be very helpful towards government achieving its renewable electricity target," said Kidd.

For a number of reasons, including the impact of carbon emissions, there was now a strong preference for renewable formats among those working to develop electricity generation.
By 2035 nearly all existing thermal plant now operating will have reached the end of their respective technical and/or economic lives and would probably in any case have been retired and replaced with renewable formats.

Electricity Authority data shows that of 4125 MW of proposed new generating plant to have already been approved, 2535 MW is wind, 553 MW hydro, 355 MW geothermal. Only 460MW is gas - being the Todd Energy peaking plants at New Plymouth and Otorohanga.

"Labour's policy of imposing a 10-year ban on the construction of new base-load thermal plant is I think superfluous as even without a ban there would be no such plant built," said Kidd.

A shift to renewable fuel for boilers, particularly in the South Island, was another opportunity.

Coal dominates but conversion to electricity was expensive and decisions tended to be made around long-term asset life cycles.

Contact Energy has welcomed the new government's plan to set up the Climate Change Commission.

"New Zealand needs to act on climate change and having targets, an independent Climate Change Commission and a plan on how we will work together to move to a lower carbon economy are crucial to provide certainty for businesses, investors and the public,'' said chief executive Dennis Barnes.

Contact had cut emissions from electricity generation by 53 per centduring the past five years and was exploring with customers the role batteries, solar, smart hot water and electric vehicles will play in the future.

"We're keen to work through the details with the Climate Commission once it's established," he said.