Tourists view geothermal attractions at Te Puia in Rotorua. In the central North Island, some sites might be suitable for delivwering 'superhot' geothermal energy. Photo / Mike Scott
Tourists view geothermal attractions at Te Puia in Rotorua. In the central North Island, some sites might be suitable for delivwering 'superhot' geothermal energy. Photo / Mike Scott
THREE KEY FACTS:
In less than three years, wholesale energy prices have leapt from about $100 per megawatt hour (MWh) to an average of about $860 on Tuesday afternoon.
Andreas Heuser is managing director of Castalia, a global strategic advisory firm, headquartered in New Zealand. He led Castalia’s work for GNS identifying the economic potential of superhot geothermal energy.
OPINION
It is clear that New Zealand has an energy problem.
Wholesale electricity prices are four timeswhat they were a year ago.
New Zealand’s gas reserves are expected to produce 10 petajoules less than the demand.
Two wood-processing facilities in the central North Island just stopped production for two weeks due to high electricity prices, with another in Auckland considering closure.
Rocketing electricity prices are hurting businesses and consumers. Cartoon / Rod Emmerson
Ministers fear for the future of industry in New Zealand. High energy costs, and a gas shortage are serious problems for our long-term industrial future and our export competitiveness.
Electricity demand will only increase; the vehicle fleet will switch to electricity over time and AI will significantly increase electricity demand as data centres and cloud computing requires more processing power and AI is integrated into business processes and manufacturing.
The good news is that New Zealand does have a source of reliable, low-cost and clean electricity right under our feet.
The Taupō Volcanic Zone (TVC) has the best geological conditions in the world for developing “superhot” geothermal energy.
Superhot geothermal energy harnesses extremely high temperatures found at between 3.5 and 6km depth in the TVC. Our conventional geothermal generation taps sources at 1.5 to 3.5km.
Scientists and researchers at the Institute of Geological and Nuclear Sciences (GNS Science) have identified that 30,000 GWh of energy could be available just from sites outside of national or regional parks.
New Zealand’s total current demand is about 40,000 GWh. Superhot geothermal is not only potentially super-abundant, but also super-reliable (unlike wind or solar) and 100% renewable.
Developing superhot geothermal power generation has a lot going for it. Analysis by Castalia shows superhot geothermal generation would be economic to build, even at costs that are double that of new conventional geothermal power plants.
Once available, Castalia’s modelling shows most new electricity supply could come from superhot geothermal at a reasonable cost.
Superhot geothermal would provide continuous firm generation, an advantage over wind and solar which need expensive batteries or other firming from fossil generation or hydro. The location of the stations would be on existing transmission nodes, and close to growing energy demand in Waikato, Bay of Plenty and Auckland.
Additional superhot generation would complement new wind farms and enable existing hydro stations to strategically store water and generate when the wind stops blowing.
Superhot geothermal could also provide high temperature heat needed for industry. Iwi-owned Miraka already uses geothermal heat at its Mokai dairy processing plant. Outside the peak dairy season the energy is used for power generation.
Nature’s Flame uses geothermal to make wood pellets near Taupō. Superhot geothermal could secure and grow the value-adding industrial future of the central North Island. In a world increasingly concerned about sustainability, products made with cheap, 100% renewable New Zealand energy would secure our competitiveness.
New Zealand led the world in the 1950s and 60s when the Wairākei power station became only the second geothermal power station in the world.
Geothermal energy has gone on to be one of the quiet heroes of our energy system, and New Zealanders’ expertise has been shared globally. A similar vision, and coordination of expertise and capital, is needed to get superhot geothermal to commercial scale.
Technical challenges to develop resilient, commercial scale, deep wells can be overcome with focused effort – no pure science breakthroughs are needed.
New Zealand’s world-best scientists and technologists hold the skills and knowledge, and GNS Science the important IP for taking superhot geothermal forward.
Iwi landowners and rights holders can be partners to develop the resource in mutually beneficial ways. Global energy companies wanting to shift from fossil fuel extraction have the technical know-how for deep drilling and, importantly, the balance sheets and risk appetite to take on the challenge.
To secure and grow New Zealand’s industrial future and a transition to abundant and renewable energy, the Government and industry partners should prioritise a smart approach to sharing risks and mobilising necessary capital.
