Draft NZ Energy Strategy

The draft New Zealand Energy Strategy to 2050 is available on the Ministry of Economic Development website here - "Powering Our Future: Towards a Sustainable Low Emissions Energy System".

A summary of the main points relevant to wind generation.

Part 1

Sets out the Governments proposed vision for NZ’s energy future and the broad directions by which this could be achieved.

Part 2

Provides detail on proposed actions that the Government could take to support its vision.
The actions and issues are covered under six broad headings:

• Resilient, low carbon transport
• Security of electricity supply
• Low emissions power and heat
• Using energy more efficiently
• Sustainable technologies and innovation
• Affordability and well-being

Vision

A reliable and resilient system delivering NZ sustainable low emissions energy by:

• Clear directions
• Maintaining high levels of security and reliability at competitive prices
• Maximise efficiency
• Maximising renewable energy
• Reducing greenhouse gas emissions
• Producing sustainable technologies

Relevant details from Part 1

Initiatives already underway that contribute to the Govt’s vision:

• 2004 amendment to RMA to ensure greater emphasis on benefits of renewable energy and efficiency.
• 2005 amendment to RMA to improve processes for decision making on issues of national importance, including energy planning.
• Revision of Govt. policy statement to the Electricity Commission (EC) to ensure a more robust transmission grid.

One Govt. initiative to support and advance sustainable energy policies is:
consideration of a voluntary mechanism for consolidated consideration of RMA consent applications for wind and geothermal energy generation projects.

Some of the measures to promote renewable energy include:

• Consideration of incentives
• Removing barriers to distributed generation
• Using RMA to provide greater leadership and guidance for consenting of renewable energy generation

Pathway to a low emission future:
The strategy recognises that all forms of electricity generation have some adverse effect, and that the adverse local effects of all proposals for renewable energy will be acceptable, i.e. a balance must be struck. (p.20)

Section 4.4.1 Electricity costs
It is recognised that there could be some trade-off between additional renewables and prices, especially if sufficient lower cost renewable options are unable to be consented or if high levels of intermittent renewables, such as wind, impose additional costs on the system. These costs can include the need for reserve capacity to be available to provide sufficient certainty (i.e. security) of meeting peak demand on an instantaneous and daily basis and providing back up for dry years. Peaking plant is likely to be thermal. (p. 26)

Also in this section it states that "there is an argument for considering support for renewable energy generation to reflect the value of the greenhouse gas emissions that might otherwise be produced by fossil fuel generation."

Part 2: Proposed NZES action plan

Section 3 Security of electricity supply. Two main points are:

• Maintaining security of supply at competitive prices
• Energy efficiency, demand-side management and an increased diversity of electrical supply to contribute to higher levels of security.

The vision to action statements include enhancing regulated backstop measures and developing policies to manage the security implications of increasing the contribution of wind and other intermittent renewable energy sources. (p. 39)

Security (or reliability) requires ensuring there is enough fuel (including water and wind) to generate sufficient electricity at any instant in time and over time. (p. 40)

Table 3.1 (p. 41) Planned generation projects (consented) includes for wind generation:

• 2007- 106.5 MW
• 2008- 347 MW
• 2009- 384 MW

The footnote states that MW capacity is not directly comparable, since load factors differ significantly between generation types. For example, the load factor for wind is about 40% of thermal generation.

The EC must set and ensure compliance with a wide range of technical requirements, such as maintaining acceptable voltages and power system frequency. (p. 42 & p. 45)

Section 3.3.2 Generation sources (p.45) states:
Wind generation cannot always guarantee firm capacity at times of peak demand. It is also less able than other types of generation technologies to provide services such as rapid reserve response and frequency and voltage support.

At current levels wind generation is not yet a source of security of supply risk, but a significantly larger share of wind generation could make supply less secure at peak times unless the system has adequate reserve capacity in place.

Further study is required to understand how a greater market share of intermittent generation could best be managed. Options may include improved wind forecasting, increased demand response and more geographically dispersed development of wind farms.

The EC is currently assessing the likely impact of wind generation development over the next 5- 10 years. The study will identify wider power system implications of additional wind generation.

Section 3.5 (p.47) Have your say
Wind generation cannot guarantee firm capacity to meet loads and is less able than other types of generation technologies to provide contingency services. However, it is a promising technology that offers many benefits. How great a part should wind play in our generation mix?

Low emission power and heat p. 48

• at present, low emission technologies such as renewable generation are economically disadvantaged because the cost of fossil fuel based generation does not include the cost of greenhouse gas emissions.
• developing a sustainable low emissions energy system will involve balancing local and global environmental impact, as well as energy prices.

From the vision to action statements:

• investors in new generation plant should face a price signal that reflects the value of greenhouse gas emissions avoided for renewables relative to fossil fuels.
• Breakdown barriers that prevent low emissions technologies from being more widely used.
• Consider a voluntary mechanism for consolidated consideration of RMA consent applications for wind and geothermal electricity generation projects.

Section 4.2.1 (p.50) Renewables
The EC and Transpower released a report on the integration of wind power into the grid.

Section 4.3.2 (p.53) Our renewables potential
The intermittent nature of wind generation lessens grid reliability, which will require prudent monitoring and management as the proportion of wind generation in our electricity system grows. In the long term, the economic cost of these issues may put an upper limit on wind generation.

Section 4.3.6 (p.55) Environmental effects and the RMA
Action
Consideration is being given to a consolidated consenting process for wind and/ or geothermal generation projects. Further consider the merits of national guidance under the RMA for renewable energy. In the near term, ensure that RMA decision makers are provided with information held by central Govt. on the energy sector implications, environmental effects and trade-offs associated with renewable energy projects.

Section 4.5 (p. 56) Have your say
How should greater use of renewable energy and reducing greenhouse gas emissions be reconciled against local environmental effects?

Section 6.3.1 (p.68) Sustainable energy innovation: areas for action
Research on wind integration and managing intermittency.