Energy efficiency goup EECA says New Zealand can take a lead from Europe. Photo / Getty
An energy efficiency group says New Zealand can take a lead from the way Europe adjusted to constrained gas supply after Russia’s invasion of Ukraine to help local gas users adapt to dwindling reserves.
The Energy Efficiency and Conservation Authority (EECA) said practical steps can be taken by businesses to reduce their gas bills.
“The cheapest unit of gas is the one you do not use,” EECA chief executive Marcos Pelenur said.
Europe’s response to losing access to Russian gas highlighted the power of efficiency.
“Savings from heat pumps [in Europe] and reduced wastage largely offset the loss of gas supply, and drove a 6% total drop in all energy consumption, demonstrating the potential of demand-side action,” he told the Herald.
“They are very different contexts, but are similar conditions in the sense that from the Ukraine-Russia war there was a sudden gas shortage, and then they had to quickly pivot to deal with this gas crunch.
“And so specifically it was essentially heat pumps and then identifying and reducing waste.
“If Europe was able to very quickly cut their consumption by 6%, we think that we can help businesses save up to 30% on their gas bills with some of the energy efficiency measures they can do right now,” he said.
Pelenur said New Zealand businesses were under pressure from rising gas prices and contract uncertainty.
There were a number of micro, more detailed actions than could be taken.
At a macro level, demand response had a role to play in driving down usage and costs.
EECA suggests businesses start by reviewing their energy bills, tracking usage and setting a baseline. Involving workers can help identify waste, it said.
Maintaining equipment - insulating pipes and regularly servicing of boilers, motors and refrigeration - can improve performance.
Even small fixes and maintenance, like repairing steam leaks, can cut boiler energy use by up to 30%, the authority says.
Using timers, adjusting temperature settings and keeping air conditioning units clean can also deliver quick gains, it said.
EECA analysis also showed there was much to gain from demand-side efficiency.
Across medium and large gas users, around 2.5 to 3.5 petajoules of annual gas demand - equal to Huntly’s Unit 5 gas turbine running flat out for 35 to 50 days - could be avoided through demand reduction projects, EECA says.
With domestic gas production now forecast to be lower in 2025 than earlier estimates, efficiency was a “no-regrets” option for businesses.
In electricity, “demand response” deals have been struck with major users who have agreed to button back on demand when the power grid is stretched.
Pelenur said there was untapped potential for demand side efficiency and demand flexibility in gas.
There were also opportunities on the distributed network side at a household level.
“From the household and business and community level, there’s a lot of energy that can be put back into the grid or used more efficiently or just flexed at that bottom up.
“When you start to aggregate all of the houses around the country, then it becomes really a significant number, and that should be alongside the large scale industrial demand systems,” he said.
Advanced technology also had a role to play.
“We feel like the technology needs to be able to talk to whatever platform might exist or whatever future market might exist, in order to provide value.
“We need to have a conversation to understand how to unlock the supply side, but in the meantime we should be working with businesses to make sure that the gas is going to the highest value user,” he said.
Data from the Ministry of Business, Innovation and Employment (MBIE) covering the latest June quarter showed hydro generation was down 6.8% from the June 2024 quarter, with lower hydro storage in April being the main contributor.
Coal imports increased from 71.5 kilotonnes in the June 2024 quarter to 539 kilotonnes in the latest quarter as shipments of coal arrived in the country to increase the stockpile for electricity generation.
Total gas use in the economy was down 19.8%, with the quarter seeing methanol exporter Methanex pausing operations at its Motunui facility for eight weeks to free up gas for electricity generation, MBIE said.
Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.