Annual Planning Report 2012 - Transpower

Chapter 5: Generation AssumptionsTranspower’s scenarios are based on the five generation scenarios in the 2010 SOO:Scenario 1: Sustainable PathScenario 2: South Island WindScenario 3: Medium RenewablesScenario 4: CoalScenario 5: High Gas DiscoveryScenario 1 – Sustainable PathNew Zealand embarks on a path of sustainable electricity development and sectoralemissions reduction. Major development of renewable generation takes place in boththe North and South Islands – mainly hydro, geothermal, and wind, but tidal and waveenergy, solar power and biomass cogeneration also feature. Renewable energyproduction exceeds 90% of total generation from 2020 onwards. Baseload thermalgeneration is largely phased out, but new thermal peakers are required. The demandside also has an important role to play in balancing intermittent generation andmeeting peak demand.Scenario 2 – South Island WindThere is extensive wind and hydro generation development, with a focus on theSouth Island and lower North Island. Geothermal resources in the central NorthIsland are developed more slowly than in the other scenarios. Renewable energyproduction exceeds 85% of total generation (on average) from 2020 onwards.Baseload thermal generation is considerably reduced, but there is substantialinvestment in thermal peaking generation and demand-side participation.Scenario 3 – Medium RenewablesA ‘middle-of-the-road’ scenario. There is moderate geothermal and winddevelopment, mainly in the North Island, but little new hydro generation. Baseloadthermal generation is considerably reduced, but new thermal peakers are required.The demand side contributes less than in the other scenarios. The NZAS aluminiumsmelter is progressively phased out between 2022 and 2027 – no new generationbuild is required over the phase-out period.Scenario 4 – CoalThis is the scenario with the lowest carbon prices, which makes investment in newcoal-fired power stations economic. An efficient new coal-fired power station iscommissioned in 2022; a second, burning Southland lignite, in 2025. Most existingbaseload thermal generation remains online. There is also some renewabledevelopment – but some existing hydro schemes have to reduce their output, owingto difficulty in securing water rights. Intermittent generation is supported by thermalpeaking generation and demand-side response.Scenario 5 – High Gas DiscoveryMajor new gas discoveries keep gas prices low over the entire time horizon. Someexisting thermal power stations are replaced by new, more efficient, gas-fired plants.A 200 MW combined cycle gas turbine (CCGT) is installed in Taranaki in 2015, a240 MW CCGT in Northland in 2017, and 400 MW CCGTs in Auckland in 2020 and2025. New gas-fired peakers and gas cogeneration are also constructed. There issome geothermal and wind development but little new hydro generation.Scenario development approachThe Electricity Commission’s scenarios from the 2010 SOO were produced using theGeneration Expansion Model (GEM), which creates a least cost schedule of new382012 Annual Planning Report © Transpower New Zealand Limited 2012. All rights reserved.