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Govt’s Energy Saving Targets Slated As Unrealistic In New Report
Chris Mole - Associate Editor

15th September 2004

A new report suggests the Govt is too optimistic in its energy efficiency targets and is thus seriously underestimating growth in energy demand in the next 20 years. The study facilitated by the NZ Business Council for Sustainable Development with the country’s 9 major energy providers presents their assumptions about how the energy market will develop. It concludes electricity demand will rise significantly faster than forecast in the Ministry of Economic Development’s “NZ Energy Outlook to 2005.”

The report notes energy saving targets in the national Energy Efficiency and Conservation Strategy are “aspirational” but have now become locked into Govt policy and planning, and the MED is counting on energy savings which are not likely to occur.
The study considers 2 scenarios –“high demand,” which is for electricity consumption to grow around 2% a year, and “moderate demand,” which would see consumption grow 1.8% annually to 2010 and then gradually decline to 1.5%, due to efficiency measures.

Even the “moderate” scenario requires 45% more new generation by 2010 than the MED’s official estimates.

The report looks at wind, hydro, geothermal, natural gas, LNG and coal as potential energy sources. It is optimistic about wind, concluding it has the potential to generate 1500MW or more as long as investment continues to increase rapidly in the wind generation industry. The report is also positive about hydro generation, but sees it confined to small-scale distributed generation, which will help ease the pressure on the national grid.

Geothermal has the potential to produce another 700MW by 2025, if existing restrictions on land use are eased. As for natural gas, the report finds while the short-term future is uncertain, the medium to long-term potential is promising, with prospects for good gas finds in Taranaki and Northland. LNG could be a fallback option, with an import terminal probably at Marsden Point and a 400MW combined cycle power station next door.

The study also sees a significant role for coal, with a scenario of new coal fired stations at Huntly, Marsden Point and the West Coast. It concludes no single source of energy generation stands out from a sustainability viewpoint, and recommends a mix of renewables, gas and coal as the best solution. It also notes NZ’s geographical isolation precludes importing electricity, an option used by many countries to balance their own generation shortfalls.

The report stresses NZ is at a key point in energy policy, but Business Council CEO Peter Neilson says “the overwhelming view of the industry participants is there is an absence of coordinated thinking to ensure a sustainable balance of future energy supply.” Neilson adds the Business Council is planning a second study, with focus on energy sustainability looking 40-50 years out in partnership with users, generators, EECA and other Govt Depts.

The full report is at https://nzenergy-environment.co.nz/free/nzbcsd-report.pdf

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