New Zealand could meet close to half of its emissions-reduction target through wider adoption of digital technologies, says telecommunications company Spark - and Climate Change Minister James Shaw has conceded it was an “oversight” to underplay the role of new tech when targets were set in May.
In partnership with corporate sustainability consultancy Thinkstep, Spark has released an analysis of various studies which it says show that digital technologies could enable a reduction in carbon and carbon-equivalent emissions of 7.2 million tonnes. That would be 42 per cent of the 2030 target (against a 2019 baseline) in New Zealand’s Emissions Reduction Plan, adopted by the Government in May.
A number of the examples cited by the telco, including smart EV charging outside urban areas and “precision agriculture”, depend on better rural broadband - an area where discussions between the Government and telcos are still in flux (more on this below) and on closing the digital divide.
“The high-tech sector was not a huge feature of the Emissions Reduction Plan. I think that was an oversight,” Shaw said at the study’s launch.
“We do need to be investing early in the more speculative and innovative parts of the economy, because that’s where we’re going to get the most dramatic changes over time.”
Shaw added, “We’re open to ideas that could help us go faster, because what wasn’t in the [study’s] charts was our Nationally Determined Contribution under the Paris agreement - which is three times the size of the emissions reductions that the Climate Change Commission suggested were possible by 2030.
“They [the commission] did take a very conservative view, which is entirely reasonable, in focusing on emissions reductions that could be achieved with today’s technology,” Shaw said. But the Government also needed to back new technologies that could help meet targets more quickly.
Prime Minister Jacinda Ardern, who spoke at the same event, welcomed Spark’s initiative. She noted that her Government had put about $100 million more into the public-private Rural Broadband Initiative and launched the $100 million NZ Green Investment Finance Fund. That fund’s investments include a $40m debt facility for solar panel company solarZero, recently sold to US giant BlackRock in a $100m deal; its founder says it will expand in this country under the new ownership).
Ardern also pointed to the $40m Digital Boost initiative, which offers free online training to provide small businesses with basic knowledge of their digital options. Almost a quarter - 23 per cent - of participating companies had reported a revenue boost, the PM said.
The Climate Emergency Response Fund included $339m to develop new technologies to reduce emissions in agriculture.
Her Government had also rolled over subsidies for public charging networks, introduced clear car discounts (and “ute tax” penalties), and welcomed investment from Amazon, Microsoft and others who are currently spending billions building “hyper-scale” data centres in New Zealand.
Spark’s study sees cloud computing as central to reducing emissions across multiple sectors (the telco is both expanding its own data centres and working with AWS and other partners).
The thinking is that although hyper-scale data centres are power hogs, centralised infrastructure is overall more efficient than the hundreds of thousands of on-site computers they replace.
Spark chief executive Jolie Hodson said lockdowns had packed five years of digitisation into five months and shown the promise of technology to help reduce emissions. At the height of lockdowns, more than a million Kiwis were working from home, the CEO said, quoting Statistics NZ figures.
The Spark boss cited three examples of “Internet of Things” (IoT) technology that was helping to reduce emissions, all involving her firm or partner Adroit (Spark bought a 38 per cent stake in Adroit in March).
Smart sensors connected to an IoT network had been installed in Christchurch after the 2017 Port Hills fires, Hodson said. They would help in early detection of forest fires, but their real-time data could also be accessed by the public to, for example, see the pollen count if they were worried about hay fever.
Hira Bhana, whose 600ha in Pukekohe is one of New Zealand’s largest market gardens, has soil monitoring gadgets that connect to Spark’s IoT network, providing real-time information about where fertiliser is needed, via a system hosted on Amazon Web Services (AWS).
And the Westpac Mussel Farm in the Firth of Thames uses smart, solar-powered data buoys for real-time water quality monitoring.
Spark had also worked with Evnex, the Christchurch firm that has developed smart EV chargers that make it easier for electric car owners to charge at off-peak times, and for power companies trialling its technology to balance loads on the network as EV ownership surges.
Technology Users Association head Craig Young said that while greater use of technology could cut emissions, there were basic “digital equity” issues that had to be addressed before many Kiwis could get past ‘Go’, let alone start using those technologies to help the planet.
Too many people in urban areas could not afford good broadband, while too many in the country did not have it within reach.
Spark runs a programme called Jump, offering free or heavily subsidised broadband to some 22,0000 households (up from 5000 pre-Covid). But Young wanted to see more detail on what the Government could do to help close the digital divide between the broadband haves and have-nots.
“And there’s not enough been done for rural broadband,” Young told the Herald.
“I was very pleased to hear that mentioned in a number of speeches today - the recognition that we haven’t done enough in that space. There remains a gap, and it’s not just getting people connected, but the quality of that connection and being able to do what we need online.”
The Government last month said it would give Spark, Vodafone and 2degrees 5G spectrum in the “C band” rather than make them bid for it - a process that cost the companies a collective $259m at the 2016 4G auction. The quid pro quo was that they would take steps to improve broadband and mobile coverage in rural and provincial New Zealand.
The details of these “in-kind” upgrades will be hammered out during negotiations over the coming weeks, said Communications Minister David Clark.
Spark said in an NZX filing that it would increase its contributions to the Rural Connectivity Group by $24m between 2023 and 2025 (the RCG is a joint venture with Vodafone and 2degrees, formed for the second phase of the public-private Rural Broadband Initiative).
Vodafone and 2degrees would not say how much money they would pitch in, citing commercial sensitivity.
Young wants to know the budget but, more, what sort of broadband and mobile coverage boosts we’ll get for our money - and where and when.
“I’ve told the minister we want to see real transparency around this quid pro quo, to know what the telcos will be held accountable for. They’ve been let off paying for the 5G licences, which we’re in favour of, but we want to see how that money will be invested.”
BusinessNZ chief executive Kirk Hope said while technology gains had been made, further infrastructure improvements were required outside main centres.
“Hybrid working is now really embedded,” he told the Herald.
“If you stood here five years ago saying almost all corporates will have some form of hybrid working - that some will have as much as 50 per cent of staff out of their office at any given time, purposefully - people would have said, ‘Don’t be ridiculous’. But it’s actually happening now. And it could not happen without high-quality broadband - and it can’t continue to happen without getting broadband further into local communities.”
Hope added, “The Climate Change Commission said, ‘We can’t anticipate the role technology might play. We could guesstimate, but we don’t want to do that’, and I think that was absolutely the right approach. But what it meant was that they were quite conservative in their emission-reduction plans. That’s why there’s a big gap between those and the Nationally Determined Contribution.”
The gap has created a “big opportunity for businesses”, Hope said, to tap NZGIF and other Crown emission funds to bankroll innovative projects.
The Spark/Thinkstep study recommends that the Government continue to back public-private infrastructure projects, boost education and training opportunities for low-emission industries, and that it includes digital infrastructure planning in its next Climate Change Risk Assessment and in the long-term Climate Adaptation Plan.
Surf's up for the telco as its capital-raising effort comes to the sharp end.