Download New Zealand`s Energy Choices

New Zealand’s Energy Choices
David Parker
Energy and Climate Change Minister
August 2008
Key challenges
• Climate change
• Energy security
• Affordability
Choices
• To respond to these challenges, Government
has made some key choices
• In short, the choices are designed to make
the economy sustainable
“Why shouldn’t New Zealand aim to be the first
country which is truly sustainable? Not by
sacrificing our living standards, but by being smart
and determined.”
- Prime Minister Helen Clark
Climate change will change our natural
environment
•
•
•
•
Increased frequency of severe
climatic events like droughts,
floods, and storms
Wetter in west, drier in east
Changed growing
seasons/regions
Biosecurity risks
New Zealand’s emissions
Solvents
0.05%
N2O
Industrial processes
5.4%
Predominantly CO2
Waste
2.4%
Predominantly
CH4
Enteric
fermentation
31.0%
CH4
Energy
Agriculture
Transport
18.5%
Forest sinks
- 29.2% (CO2)
Electricity
10.7%
Agriculture soils
16.4%
N2O
Miillion tonnes carbon dioxide equivalent
-20
-100
-80
-84.1
16.9
Total excess emissions
Waste
Forest sinks
Kyoto Protocol Article 3.3
forests
5.0
Industrial Processes
0
7.0
Projects to reduce emissions
-60
18.8
Deforestation
20
Stationary energy
-40
Transport
40
Agriculture
NZ’s projected deficit has reduced dramatically
for the 1st Kyoto Commitment Period
36.0
27.4
14.7
-5.3
Emissions Trading Scheme
• Internationally favoured measure
• In line with others
• Includes every sector of economy –
forestry, liquid fossil fuels, stationary energy/industrial
processes, agriculture/waste/others
• Linked to Kyoto trading markets
• Gradual introduction
NZ Energy Strategy: Our vision
A reliable and resilient
system delivering
New Zealand sustainable,
low-emissions energy
A sustainable low-emissions energy future
Renewable electricity target
90 per cent of electricity
from
renewable sources
by 2025
Forecast electricity generation
Forecast electricity generation
GWh
60000
50000
40000
30000
20000
10000
0
2005
2010
2015
2020
2025
2030
Thermal
Renewable
Source: Ministry of Economic Development
Emissions reduction opportunities in electricity
Renewables future - economic sense
New Build Generation Costs
Key actions for renewables
• National policy
statements on 9 renewable electricity
generation
9 electricity
transmission
- to provide guidance
for councils
• Call-in powers available
Hydro energy
Wind energy
• Small proportion in New
Zealand at present, but
big potential
• Integration into grid
Geothermal
• NZ already a world
leader in geothermal
development
• 8% of electricity from
shallow geothermal
• Untapped deep
geothermal resource
Wave and tidal
• Marine Energy Deployment
Fund: $8m over four years
• First award made to Crest
Energy for $1.85m
Role of fossil fuel generation
• All new electricity should
be renewable except that
for security of supply.
• Fossil fuel generation
continues to play a critical
role (particularly gas).
More gas discoveries needed
• New gas discoveries
needed to meet our
future domestic demand
• Indigenous sources are
preferred over imports
• Onshore Taranaki Blocks
Offer:
– Enabling new gas discoveries
– Opening up opportunities to
maximise chances in the New
Zealand gas market
More gas discoveries needed (cont’d)
New Zealand Gas Production and Known Reserves
250
200
150
Gas bankable for later
delivery
100
50
Kapuni
Mangahewa
Kupe
Maui
Gross Production
*Others includes Kaimiro, Ngatoro and Radnor
TAWN
Rimu/ Kauri
Turangi
Own use, losses and flared
McKee
Pohokura
Other*
Gas Demand (Gross PJ)
Source: Ministry of Economic Development
2030
2025
2020
2015
2010
2005
0
2000
Gas production and projected demand (PJ)
300
The future for coal-fired electricity
• Huntly power station
currently the only
large user
• Huge lignite coal
reserves
Carbon capture and storage (CCS)
•
CCS can provide low emissions
supplies of energy from existing
and new fossil-fuel generation.
•
CCS still poses questions
•
Much international research
underway.
•
Government policy group
established to consider issues
and regulatory options, including
ensuring compatibility with ETS
•
Identified CCS issues:
- Storage liability
- Ownership of CO2 and
pore spaces
Resilient, low carbon transport
Halve domestic
transport
emissions by
2040, from 2007
levels
New Zealand Production1
Imports
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
1977
1976
1975
1974
PJ
NZ’s dependence on imported oil
Annual Crude Oil, Condensate and Naphtha Supply
350
300
250
200
150
100
50
0
Realising the potential of New Zealand’s
petroleum estate
• Opportunities to discover
world-class oil and gas
deposits
• Potential overseas trading of
large petroleum finds
• Positive indications: Tui and
Maari oil fields
• Government actively
encourages petroleum
exploration and development
www.nzog.net/tui
Opportunities to reduce transport emissions
Biofuels
• Biofuel Bill (introduced in
October 2007) will mean
sales of biofuels are
mandatory
• Sustainability standard being
developed
• Second generation biofuels
Electric vehicles
• Low carbon future for
transport essential
• NZ to be world leaders in
using electric vehicles
• Powered by renewables
• ‘Smart grid’ needed to
balance load
• Early models by 2010
Longer-term predictions
• Slow ramp-up from 2015, for new light
vehicles
• 17% of light vehicle fleet plug-in hybrid or
electric by 2030, rising to 60% by 2050
• 80% of travel in full electric mode
• Likely consumption around 8TWh (14%
additional load) in 2050
• Potential to draw energy from batteries during
peak load periods
Hydrogen
•
•
•
•
•
Technological challenges
International cooperation
New Zealand can be a fast adopter
Substantial lignite reserves
Significant environmental challenges
Energy efficiency
• An untapped virtual
source of energy
• NZEECS covers whole of
economy, including
vehicle efficiency
• Long-term major savings
possible
Energy efficiency
Building design
• Building Code changes
mean better insulation
and efficiency
standards
• The future lies in
smarter design to
reduce energy use
Affordability
• Programmes to fund insulation
• Low Fixed Charge electricity tariff
• South Island customers
Technology and innovation
New technologies
• Need diverse mix of renewables
• Main increase over next decade will be wind and
geothermal
• As island nation NZ has great potential for marine
generation
Marine Energy Deployment Fund
• First grant – Crest
Energy for Kaipara
Harbour entrance
project
• Will improve reliability
of supply to local
community
• Further funds
available in Round 2
Role of research and education
Universities contribute:
• Research on behavioural and technological
issues
• Scientific understanding and analysis of our
energy resource base, climactic data,
adaptation and mitigation issues
• Analysis and presentation of views to inform
public debates and policy development
Funding for sustainable development research
Budget 2008: $32.5m over 4 years:
• $10 m for renewable energy research
• $18.5m for transformation Research, Science
and Technology
– Includes $4m for the Low Carbon Energy
Technologies (LCET) Fund
• $4m for deep geothermal energy research
Towards a carbon neutral New Zealand
Carbon
neutral
electrical
energy
Carbon
neutral
stationary
energy
Carbon
neutral
transport
and
energy
David Parker
Minister of Energy
August 2008