New Zealand's need for renewables projects

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Aotearoa is well known for its green image and our renewable electricity system. For the last 5 years ~80–85% of our electricity has been produced from renewable sources including hydro (55–60%), geothermal (~20%) and wind (~5%). By comparison, ~29% of the world’s electricity was renewable in 2020.

What many people don’t appreciate is New Zealand’s environmental flip side. Our net emissions have increased 34% since 1990, and our gross emissions per capita (~17 tonnes CO2 per year) is not far off the United States (~20 tonnes CO2 per year). In 2021, New Zealand had record high coal imports; a shortage of water at our hydro stations means coal used for electricity generation more than doubled compared to Q1&2 of 2020. In 2019, coal burning contributed to ~12% of our energy sector emissions and ~5% of total emissions. Coal is one of the most carbon intensive fossil fuels, emitting 30–45% more carbon than refined fuels (e.g. petrol, diesel).

To understand New Zealand’s continued use of coal and other fossil fuels, it’s helpful to know a little about our country’s energy production and consumption. New Zealand is fortunate to have plentiful renewable energy resources (hydro, geothermal, wind, solar, woody biomass) and local non-renewable resources (coal, gas). Below is a chart mapping the final consumption of these resources in 2019.

Data source: Energy in New Zealand 2020 (MBIE)

Many people will be surprised by this energy consumption mix. How can this be true when New Zealand produces 80–85% of our electricity from renewable resources, and our primary energy supply is 40% renewable? Frustratingly, these often quoted figures don’t consider our entire fossil fuel footprint (including transport and international aviation) or that ~85% of geothermal energy is lost when converting geothermal steam to electricity. As noted by Michael Liebreich, founder of Bloomberg New Energy Finance (BNEF), “The challenge the world faces is meeting final energy demand, not meeting a primary energy figure, most of which is thermal waste”. New Zealand’s reality is that renewables contribute to less than 25% of our final energy consumption.

In 2021, New Zealand’s Climate Change Committee (CCC) released their final recommendations for how to meet our target of net zero carbon by 2050. They’re clear about the enormous challenges ahead, a path that requires reducing our total emissions by ~50%, and energy sector emissions by 85%. Their advice to the government could mark a turning point, outlining a number of ambitious, evidence-based recommendations for how to achieve a low emissions future for Aotearoa. They recommend phasing out of coal as soon as possible and estimate that electricity demand will increase 60% between now and 2050 to support electrification of areas like process heat and transport. The government is expected to use their advice to help create an emissions reduction plan by mid 2022.

As things stand, New Zealand is one of the world’s top 5 worst climate performers out of 43 developed countries. However, unlike many countries we have an opportunity to quickly reverse our emissions thanks to vast renewable resources. In the energy sector we can begin by phasing out coal, supporting new renewables, transforming our electricity system, encouraging active and public transport, and building green communities. Liebreich offers an inspiring vision:

“Imagine a country or a region that has fabulous wind resources, fabulous solar resources, some pumped hydro capacity, a few batteries, and a decent grid. By 2030, you should be able to run industrial processes with 80% uptime, based purely on renewable energy… These will be the green industrial superpowers of the future.”

Sounds good, doesn’t it? Aotearoa has the potential to be one of the world’s green superpowers. It’s time for us to increase our commitment to renewable energy, supported by New Zealand's renewable developers and sustainable businesses.