The New Zealand Government has recognised the importance of renewable generation; its current energy strategy includes a target of 90% electricity from renewable sources by 2025 up from around 75% today.
Achieving this target requires a substantial increase in renewable generation – renewable electricity needs to grow much faster than electricity demand.
The use of these renewable energy resources will be important for New Zealand’s economy.
The country is fortunate in having ample supplies of renewable energy resources to help meet future energy demand. These renewable resources can shield the economy from global price and supply issues associated with fossil fuels. They can help combat climate change.
Renewable energy also ties in strongly with New Zealand’s clean and green image around the world, supporting tourism and providing other business opportunities.
New Zealand has much of its electricity supply ‘eggs in one basket’, with hydro supplying two thirds of our electricity needs. Our geothermal resources are also well developed. But it is hard to see how these technologies can continue meeting all the increasing electricity demand. Development sites for large hydro dams are becoming very hard to secure.
New Zealand is coming to the end of sites for cheap “brownfield” geothermal development – although there may be plenty of new geothermal potential it will be more expensive and uncertain than previous development.
In terms of renewable electricity generation, wind is likely to play a very significant role over the next 20 years.
This country’s wind resource is one of the best in the world; in fact, the Global Wind Energy Council calls our wind resources “spectacular”. We have only scratched the surface of its potential.
Although the New Zealand wind industry is still young, wind generation technology itself has come of age. Wind power already produces 5% of the country’s electricity. That figure is predicted to grow because New Zealand has a lot of wind, it is a very cost effective form of new generation, and many onshore development sites are available. Investment in new wind farms makes economic sense for generators.
In 2011 a report showed that existing wind farms have long run marginal costs that make them among the best choices for delivering low cost electricity, and Bloomberg showed that costs are continuing to fall. Looking out into the future, turbine manufacturers say that because of technology improvements, operations and maintenance costs will be much lower than in the earlier years of the wind industry.
Read more of the NZ Wind Energy Association 'Wind Energy Report' here