Innovation in Global Power - Parsons Brinckerhoff

Planning and the Role of Regulators
http://www.pbworld.com/news_events/publications/network/
New Zealand Energy Strategy – A Plan for a
Sustainable Nation By Nick Barneveld, Wellington, New Zealand. 64 4 916 6558, barneveldN@pbworld.com
New Zealand promises to be
one of the world’s leaders in
taking proactive measures
toward sustainability in the
electricity sector. The
author tells of its goals and
strategies, and in so doing,
illustrates the promise of
the Kyoto Protocol.
Acronyms/Abbreviations
CER:
ETS:
GHG:
NZETS:
NZU:
Certified Emission
Reduction
Emission Trading
Scheme
Greenhouse gas
New Zealand
Emission Trading
Scheme
New Zealand Unit
Figure 1: Fuel supply –
Hydro storage trajectories.
The New Zealand government is determined that the country become a truly sustainable
nation, and even a carbon neutral nation. Its recently introduced New Zealand Energy Strategy
to 2050 (referred to in this article as The Strategy) maps out an ambitious pathway for the
reduction of energy-related greenhouse gas emissions. Operating within a framework of
competitive energy markets,The Strategy was designed to:
• Set conditions for capital investment
• Provide leadership on energy security and climate change issues
• Respond to the challenges of meeting demand in a growing economy, maintaining security
of supply and reducing greenhouse gas emissions.
The Strategy and the associated New Zealand Energy Efficiency and Conservation Strategy
introduce initiatives that champion:
• Renewable energy across the electricity generation market
• Energy efficiency among transport, domestic and commercial users
• Development and deployment of sustainable energy technologies.
The current electricity sector of New Zealand is characterised by:
• A long stringy transmission system spanning two islands, which are linked by a high voltage
direct current (HVDC) transmission line with both over-land and sub-sea components
• Significant indigenous fossil fuel
• Tightening supply and demand
• Rising investment costs and wholesale and retail prices
• Vertically integrated generator retailers
• Renewable generation resources that are notable for significant seasonal and year-on-year
variability (Figure 1).
New Targets for Low Emissions
A secure energy system with low emissions will require
changes in the way electricity, heat and motive power are
produced and delivered. For example, the electricity
sector, currently sourcing 65-70 percent of its “fuel” from
renewable sources (Table 1), has a target of achieving
90 percent renewables generation by 2025. This very
challenging target requires servicing all new demand with
renewable generation and reducing existing fossil fuelled
thermal generation by more than 50 percent, replacing it
with energy generated using renewable technologies.
This renewable generation policy position is a major change
from the prior neutral policy position. The new policy has been given impetus by a legislated
ban 1 for the next ten years on new base-load thermal electricity generation, plus New
Zealand is a signatory to the Kyoto Protocol.
1 At the time of writing the legislation is
in the process of being enacted.
Tidal power is one technology that the government is supporting, as New Zealand has
significant potential available along its extensive coastline. In fact, Crest Energy Limited has
applied for environmental consent to construct a marine turbine power generation project in
the Kaipara Harbour in Northland, northern New Zealand. The project comprises up to 200
PB Network #68 / August 2008 86