The good oil

By Sally Blundell, August 31, 2006 @ midnight

Idealog September/October 2006, page 52

Power cuts, record fuel prices, global warming, pollution. We’re addicted to energy but it’s making us miserable and poor. Idealog meets creative Kiwis who are finding ways to produce clean, sustainable energy. They could create a new export industry and allow New Zealand to keep its profitable green image

More rain in the west, more droughts in the east, climbing temperatures and rising sea levels. Our long-range weather forecast is proof that our unthinking reliance on fossil fuels and other non-renewable sources of energy is about to become history.

It’s also throwing down a gauntlet to this country’s scientists, engineers and business entrepreneurs hell-bent on improving the environmental outlook.

Throughout the country wind energy projects, biofuel trials and alternative energy initiatives are underway in a widespread bid to put some reality back into our clean green global image and help break our reliance on large-scale, one-size-fits-all, non-renewable energy sources. If our green entrepreneurs succeed they could take a leadership role in a huge emerging market.

“There is a debate about where New Zealand should sit,” says Andrew Smith, advisor with the Energy Efficiency and Conservation Authority. “Are we too small to do big, cutting-edge research and development? Should we be a fast follower, picking up new technology that suits our environment? On the other hand, there’s the classic number eight wire Kiwi ingenuity—we have people in New Zealand doing some incredibly innovative work. Sometimes it’s not world leading—wind is being taken up around the world. Some of it is really cutting edge, like algae oil work in Christchurch and Marlborough, cellulose to ethanol, marine currents.”

Encouraged, perhaps, by the brutal beginning to winter this year and record power use, New Zealand homeowners and power companies are taking note.

Which is all good for business.

“There’s a small proportion of people in the world using an exorbitant amount of resources and living as if there’s no tomorrow,” says Wendy Reid, executive director of Sustainable Aotearoa New Zealand. “But tomorrow is coming our way. As the general public becomes increasingly well-informed on sustainable issues they will choose to trade with those businesses that are sustainable, a bit like the Heart Foundation tick. It’s not just an environment issue. It’s about the exhaustion and depletion of the Earth’s resources and how we use them, and this is a huge opportunity for business. Internationally, sustainability is the new buzzword.”

“When I talked to people in the power industry their eyes would glaze over. They thought it was airy fairy stuff—but it was the fastest growing form of power generation.”

While the market may reward those ventures that have a less detrimental impact on the environment, the slow pace of legislation is making it difficult for these businesses to attract investment. In 2002, New Zealand signed up to the Kyoto Protocol. Under this international agreement, greenhouse gas emissions should be reduced to 1990 levels by the end of 2012. If signatory countries don’t reduce their carbon or carbon-equivalent emissions to the required levels, they’ll have to purchase ‘carbon credits’ from those countries or companies emitting fewer carbon emissions.

Already, however, predictions that New Zealand would be well in the black in lucrative carbon credits have reversed as increasing deforestation and carbon emissions (in 2002 our CO₂ emissions were 22 percent higher than they were in 1990) and the scrapping of the proposed carbon tax have turned a positive carbon balance into a deficit.

“New Zealand is in a unique position,” says Smith. “Most countries are trying to increase their renewable energy from zero, while we’re trying to stop the slide away from renewables.”

While the Government thrashes out a new Energy Efficiency and Conservation Strategy, initiatives around the country are revealing creative solutions to help meet the current goal of a 22 percent increase in the renewable energy supply by 2012.

The first challenge is our reliance on non-renewable fossils fuels for transport. New Zealand’s remote geographical location, long supply routes and increasingly high level of oil imports render it economically vulnerable to fluctuations in the global oil market. The current high price of crude oil on the global market (between 2001 and 2005 oil prices rose by 200 percent) has huge implications for a country with growing fuel demands. Electric cars, alternative fuel sources, ethanolblend petrol from biomass such as wood, corn and sugar, and biodiesel are all being mooted to meet 2008 biofuel blend targets.

Power too is high on the list of sustainable energy projects. Nearly 70 percent of our electricity is currently generated by hydro systems, with between 23 and 30 percent coming from gas or coal and small amounts from wind generation, geothermal sources and biomass. While there is clearly a need for smarter thinking on power consumption—solar water heating in every new house, financial support for insulation, more use of natural light in commercial buildings, more prudence when it comes to domestic electricity use—there is a growing understanding that to head towards 100 percent renewable energy we need to look at a variety of solutions.

Something in the wind

When Bob Dylan wrote ‘Blowin’ in the Wind’ in a New York bar in 1962, he wasn’t thinking of 46-metre towers and high-tech aerospace blades. Today, the words are emblazoned across the front desk at the Christchurch office of Windflow Technology, the brainchild of wind energy aficionado Geoff Henderson.

“I was really motivated by the environmental situation,” says Henderson. “We’re stuffing up our children’s environment because burning fossil fuels seems to be the cheapest thing to do. But if we burned all our recoverable carbon, greenhouse gases in the atmosphere would increase by a factor of five to ten. That’s unthinkable. We have to stop using fossil fuels long before that.”

Henderson’s long-term interest in wind energy was confirmed on a working holiday to the United States in 1984. A job on a 336-turbine windfarm in California brought home to him the huge potential of harnessing the wind. “Attached to each turbine was one of those old-fashioned metres with the spinning discs. Seeing them spinning around and seeing the export of power to the grid, gave a tangibility to the whole concept.”

Returning to New Zealand in 1990, he was frustrated by a lack of interest. World oil prices had dropped. Government investment in alternative energy, responding to the 1970s oil shocks, had evaporated.

“When I talked to people in the power industry their eyes would glaze over. They thought it was airy fairy stuff—but it was the fastest growing form of power generation.”

Neither institutional inertia nor governmental prevarication stopped Henderson. In 2001 he founded Windflow Technology. Two years later a photo in the Akaroa Mail shows a flock of people climbing up the hill at Gebbies Pass, a spectacular site overlooking Lyttelton Harbour, for the official opening of the first Turbine 500.

“The rest of the world has been doing this for 20 years. Why it’s taken so long for us to get our head around it I’m not sure. With coal, gas or nuclear energy something is taken out of the ground until it’s all gone. But wind lasts forever.”

The turbine is a uniquely homegrown design with a two-bladed teetering design (while most overseas models are rigid and three-bladed, these two blades teeter up to six degrees in response to varying wind loads) and a patented torque-limiting gearbox. Promoted as a light and cost-effective alternative to larger Danish models, it also boasts new noise reduction technology and a more advanced control and protection system to prevent a repeat of the damage caused by unusual wind conditions in the Pass last year.

Currently being prepared for a gruelling six-tonne horizontal force as part of testing for international accreditation, the prototype already has a power output of up to 500 kilowatts, enough energy to meet the needs of about 200 households and bought by Christchurch-based lines company Orion, through a payback system for customers, to supply electricity during periods of high demand.

Realising that the business of developing and manufacturing turbines is very different from ‘planting’ windfarms and generating power, Windflow Technology established New Zealand Windfarms as a standalone windfarm operator and major customer for the Windflow turbines (both companies are listed on the NZAX alternative market).

The turbines are now in high production—the towers are made in Wellington, the casting in Dunedin, the blades in Auckland and the cell assembly in Christchurch—for a 104-turbine windfarm on the Manawatu Saddle. It’s one of the country’s most blasted locations, hammered by the infamous Roaring Forties—those westerly gales that blow with an average speed of 35 kilometres an hour, 365 days a year. The $80 million windfarm, Te Rere Hau (Maori for windflow), will have the potential to produce power for 18,000 homes a year. It is also expected to reduce emissions of greenhouse gases equivalent to 519,000 tonnes of carbon dioxide between 2008 and 2012.

It hasn’t been all plain sailing. There have been the issues of noise, although the country’s windiest spots are unlikely sites for dwellings, and birds, although windfarms tend to avoid migratory paths. But the most enduring concern is the impact on landscape.

“But this is marginal land, highly modified pastoral land,” says NZ Windfarms chief executive Chris Freear. “It’s land that is either good for windfarms or native bush regeneration.”

And the arguments for wind energy, says Freear, are compelling. “The rest of the world has been doing this for 20 years. Why it’s taken so long for us to get our head around it I’m not sure. With coal, gas or nuclear energy something is taken out of the ground until it’s all gone. But wind lasts forever.”

Freear points to the success of wind energy in Denmark, where it currently meets 20 percent of the total electricity demand, powering 1.4 million homes and supporting an international industry employing 20,000 people.

In this country, Freear argues, there is the potential for wind to generate more than 2,500 megawatts—enough electricity for over one million homes.

“There might be 400 years’ supply of coal in Southland. But 400 years is not forever. Electricity’s place in the modern world is assured—this is a business plan that will last forever. And it’s going to grow in demand as liquid fuels disappear and cars and trains are electrified. I’d like to see New Zealand get to the point of 100 percent renewable energy generation and wind is the cheapest form of generation that will drive us in this direction.”

Freear points to the security of supply and international competitiveness, and the impact on our international image. “Think what Tourism NZ could do with a 100-percent renewable, clean green branding. Think what the organics industry could do with that kind of information.”

Power companies are convinced. Both Meridian and TrustPower have announced further investments in windfarms around the country (although both are using the Danish-designed turbines).

And when the wind doesn’t blow? Here we say goodbye to the old mindset of one big source for all our power needs. Like hydro energy with its reliance on unpredictable river flows, wind falls into the category of intermittent generation. As with everyone interviewed for this story, Windflow Technology is convinced that its technology presents only part of the answer. Whether localised or intermittent, we’ll need a range of power sources, and a range of solutions, to get clean, green reliable energy.

Cleaning the greens

For technology start-up expert Nick Gerritsen, when it comes to transport costs the writing on the wall has never been clearer.

“Let’s cut the crap,” he says. “We’re not in some virtual space of a knowledge economy—we still have to sell real things to the world. And the percentage of foreign exchange currently being spent on purchasing liquid fuels is the highest it’s been since carless days and Think Big projects. It’s the number one driver of our deficit. You don’t have to be a rocket scientist to see the ramifications in terms of the underlying competitiveness of New Zealand in the world.”

Gerritsen acknowledges the Government’s commitment to a target two petajoules of renewable transport fuel by 2012 (a petajoule is a measure of energy; our current transport fuel use sits at about 215 petajoules per year).

“How do you satisfy that? To just hope that petrol companies would be able to satisfy the requirements would be silly and self-defeating. Here was an immediate market that had to be addressed.”

And address it he did, using the simplest plant organism to convert sunlight and carbon dioxide into energy through photosynthesis. Last year Gerritsen and fellow shareholders Vicki Buck and Barry Leay launched Aquaflow Bionomic Corporation to convert wild algae sourced from sewage ponds for the production of homegrown biodiesel.

The idea was inspired by a US report naming algae as the best land-based solution for sustainable resources for biofuel. Why? Algae grow continuously and don’t require extensive land cropping or intensive chemical input, don’t compete with other agricultural or horticultural uses of land, and the process produces a sustainable net energy gain by capturing free solar energy from the sun.

The result is an impressive oil yield of 15,000 kilograms per hectare (compared with palm oil’s 5,000 and soybean’s 962 kilograms).

And there’s the added bonus of cleaner water. While algae take most of the nutrients and chemicals out of sewage, too much algae can taint the water. By cleaning up the excess algae and recycling the waste product, Aquaflow can assist councils and local agricultural or horticultural ventures through the production of clean water.

Last year Aquaflow formed an agreement with the Marlborough District Council to undertake a pilot to extract algae from its excess pond discharge. The process involves getting the algae out of the water, releasing the lipid oil using a method of solvent extraction, then converting the oil into fuel through a chemical process called transesterfication.

The result is a low-cost, clean-burning fuel alternative. Mixed with conventional diesel, it could help meet the government’s blended fuel targets for cars, trucks, buses and boats without the need for vehicle modifications. It’s a localised solution, says Gerritsen, developed to meet a regional demand.

“You have to ask, how much is it worth to the community to be self-sufficient? It’s worth quite a lot. So the solution has to be close to the community. We’re looking at a regional solution and the fuel will be used to address a demand in some of the key industries in regional economies. This is a domestic solution to a real economic problem.”

Now that Aquaflow has succeeded in producing a first sample of homegrown biodiesel fuel from wild algae, the next step is to test its product in a range of diesel engines and increase production to an ultimate goal of 1,000,000 litres of biodiesel per year.

Beneath the sea

When the wind don’t blow, the sun don’t shine and the rain don’t fall, you can count on the tides to keep on running. It was the potential of this incessant movement, controlled by the sun and the moon rather than weather patterns, that led Christchurch engineer Chris Bathurst and scientist David Beach, the founding directors of Neptune Power, to the deep waters of Cook Strait.

The TidEl tidal stream generator, a small tethered turbine with two counter-rotating propellers built to capture the energy of the sea’s tides

“As soon as we saw the amount of power that was there,” says Bathurst, “we started to look around at what technology there was.”

Their search took them to SMD Hydrovision in Newcastle, England, manufacturers of submarine vessels for North Sea oil rigs and designers of the TidEl tidal stream generator, a small tethered turbine with two counter-rotating propellers built to capture the energy of the sea’s tides.

The turbine, says Bathurst, is ideal for the underwater terrain of the Strait. They can be moored to the sea floor from the ocean surface and the units can be easily towed ashore, with maintenance carried out in workshops not unlike the old railway or modern aircraft maintenance workshops (providing jobs for the fishing community involved in the biannual maintenance programme).

With “the best site in the southern hemisphere”, Neptune Power is proposing a multibillion-dollar tide turbine farm of up to 7,000 turbines anchored to the floor of Cook Strait and floating about 40 metres below the ocean surface. Covering a 200 square kilometre area, the turbines could generate up to 14,000 megawatts of energy—nearly twice New Zealand’s total present capacity.

A secondary tidal generation project in Foveaux Strait is also being considered as an energy source for the lower South Island.

The lull in tidal activity (about every six hours when the tide turns) could be offset by hydropower in a meshing together of energy systems. “In a drought hydro systems suffer because they don’t have enough water,” Bathurst says. “If they could save water while the tides are running it would save New Zealand from building much more than the existing hydro stations for a long time.”

Depending on the results of a trial currently being conducted in Scotland’s Orkney Islands and the outcome of the resource consent process, Bathurst is hoping to have the first turbine in place by 2008 with a commercial operation underway within eight years. Already state-owned power companies Meridian Energy and Transpower have shown interest in the project.

Bathurst says that the technology could be useful in other areas of strong tidal flows in the Pacific, such as in the ocean waters just south of Indonesia.

Similar explorations are being conducted in the northern hemisphere. A tidal and wave energy project is being mooted for San Francisco (under the Golden Gate Bridge no less). In Portugal, General Electric is supporting trials of a wave energy converter in Portugal with expectations that the system will meet the electricity demands of more than 15,000 Portuguese homes while saving more than 60,000 tons of carbon dioxide emissions per year. A German energy company is planning to build the country’s first tidal power plant on the North Sea coast. And Scotland has recently invested over £2 million in developing its own marine energy industry.

Down in the woods

An unremarkable shrubby plant on the shores of Lake Taupo is expected to help reduce New Zealand’s dependency on imported petrol.

Cane willow (botanical name Salix) is being grown as a rich source of wood cellulose that can be converted into ethanol while also sucking up the nitrates from dairy run-off that are degrading local waterways.

“It’s clear that New Zealand will follow the rest of the world in getting away from a reliance on fossil fuels for petrol and oil,” says Jim Watson, BioJoule’s founder and chief scientist of Genesis Research and Development. “So we set out to find a place where we could grow cane willow on marginal lands that would produce reasonably good yields of biomass that we could refine into diesel.”

“Internationally, sustainability is the new buzzword. As the general public becomes increasingly well-informed on sustainable issues they will choose to trade with those businesses that are sustainable.”

Why willow? In Europe, the US, Canada, Brazil and Australia, ethanol is being extracted from corn, wheat and sugarcane. The appeal of cane willow, however, is its high level of cellulose, its low establishment costs, its success on marginal lands and its low fertiliser requirements. It doesn’t compete for land use with agriculture or timber production and it is coppicable (able to be regularly cut back).

Farming the Salix plant also offers a viable alternative to more chemical-intensive agriculture.

“We began to realise that one of the ways to reduce nitrogen runoff is to reduce fertiliser use around the country,” says Watson. “If you replace a dependency on livestock for income with cane willow cropping, fertiliser use will drop substantially.”

One of several central North Island lakes suffering from nitrogen run-off, Lake Taupo is now the site for a trial plantation of about 8,000 trees. In partnership with the Lake Taupo Development Company and with $5 million from private investors, BioJoule is planning to have the willow refining plant built and operating within the next 12 months.

Using heat from the nearby geothermal plant (Northland and Kawerau are also suitable contenders for providing heat from steam), the refining process separates the biomass into 50 percent lignin and xylose and 50 percent pure cellulose. The cellulose is then converted into ethanol through a process of hydrolysis and fermentation. Watson calculates that 2,500 to 3,000 hectares of Salix harvested every year will produce enough biomass to make 11 million litres of transport ethanol. And, at an estimated cost of 67 to 69 cents a litre, it would work out at roughly one-third cheaper than imported ethanol.

There’s also sales potential from the two main by-products. Lignin can be sold as a natural alternative to fossil fuels in the manufacture of paints, resins and adhesives, while xylose is widely sought after as a natural sweetener and sugar substitute.

The major obstacle for BioJoule, as with many of the energy initiatives, is the current legislative vacuum. The government is currently looking at requiring on oil companies to sell a certain percentage of their annual turnover as biofuel, but such targets have yet to be finalised.

“We need legislation to give some certainty that the Government is serious about these forms of transport fuel and to send a strong signal to business,” says Watson. “And we need legislation to monitor the conversion of biofuel into petrol or oil as well as the sale of petrol or diesel at the pump.”

Originally published in Idealog #5, page 52