Fraser Clark writes on optimism in New Zealand's electricity generation industry.
Progress in the wind energy industry is optimistic. But this has nothing to do with, as a recent contributor suggested, collecting "greenie points" for projects that will never be pursued.
Wind generation has grown 10-fold since 2003, to more than 4 per cent today. This year alone wind capacity will
grow nearly 25 per cent as three new wind farms are commissioned.
By 2030 wind could be supplying 20 per cent of our electricity. A close look at the electricity sector reveals that sound economic and energy security reasons are driving the wind industry.
New Zealand's electricity prices are low in comparison to many other countries. But they have been rising in recent years, mostly because of increasing natural gas prices.
As existing gas fields are depleted, new fields are needed to maintain supply. These are likely to be smaller, more difficult and expensive to develop than fields such as Maui - meaning the cost of generating electricity from natural gas will continue to increase.
Competition for the water that fuels hydro stations is also rising, as it is good for other uses such as irrigation.
Unlike gas, wind is free. Unlike water, wind is not in demand for other purposes.
Wind farms do not create greenhouse gas emissions as they generate electricity, so the price of their electricity will not be affected by the Emissions Trading Scheme.
Given these factors, increasing wind generation will reduce the upwards pressure on electricity prices. Consumers will also have long-term certainty about the cost of wind power.
This cost is already competitive with other forms of generation. New Zealand is unique in that our wind farms do not benefit from support schemes or subsidies.
Wind farms are built only when investors are confident that they can generate electricity at a cost that is competitive in today's market.
Growing amounts of wind generation will increase diversity in our electricity system, reducing the risks and uncertainties associated with over-reliance on any one form of generation, such as the dry-year risks associated with hydro power.
Using wind when it is available allows our valuable water and natural gas resources to be used more efficiently - ensuring consumers have access to electricity when they need it.
Wind farms bring many benefits for local communities including business opportunities and employment. The operation of three wind farms in the Manawatu injects $8 million to $11 million a year into the local economy.
Vestas, the operator of two of the three Manawatu wind farms, employs about 40 people in Palmerston North. Several local companies have expanded to supply services and equipment to the wind farms during construction and operation.
At the new Te Uku wind farm, being built in the Waikato, 800 people have been inducted to work on the site. More than $30 million has already been invested in the Waikato economy through the project.
No form of development comes without effects. But before projects are approved, they go through the robust and independent assessment required by the Resource Management Act. If a project's effects are deemed inappropriate, it will not proceed.
New Zealand's wind industry is committed to managing the effects of wind farms. This commitment is reflected by the industry joining with the Energy Efficiency and Conservation Authority to fund Standards New Zealand's revision of the New Zealand Standard for wind farm noise last year.
The standard sets limits on the level of noise wind farms can make and establishes methods for predicting and measuring that noise.
Beyond this, the industry is seeking to establish, with the input of councils and other stakeholders, guidelines for wind farm development. The guidelines will provide communities, councils, developers and decision-makers with good practice guidelines.
Recently, the economic slowdown has caused electricity demand to ease. This has reduced the immediate need for new generation. But as the economy returns to growth, electricity demand will increase.
Having a range of proposed wind farms and other generation projects ready to proceed enables generation to be commissioned as needed.
With no fuel cost, a secure fuel supply and no carbon risk, wind farms will continue to play an important role in our electricity system.
Fraser Clark is chief executive of the New Zealand Wind Energy Association.
