Fresh projections on the future of New Zealand’s energy industry have been released by the Ministry of Economic Development.
New Zealand’s Energy Outlook 2011 assumes that broad trends of key economic drivers and policy settings continue along their current path.
If so, energy intensity would improve 21 percent by 2030 and renewable energy sources could provide around 50 percent of New Zealand’s primary energy supply. Investment in new generation will be dominated by geothermal and wind, the outlook states.
Currently about three-quarters of our electricity comes from renewable sources.
"There is a great deal of uncertainty over what the precise make-up of New Zealand’s future electricity supply will be, as a number of factors could shift it towards, or away from specific technologies. Exchange rates and steel prices affect the capital cost of building new plants, especially renewables, whilst fuel and carbon prices affect the cost of running thermal plants. Gas supply is also critical, with new gas plants unlikely to be built without long-term supply contracts."
Wholesale electricity prices may rise above the rate of inflation out to 2030 in order to support investment in new electricity generation, it concluded.
Meanwhile, consumer energy demand is projected to grow at around 1
percent per annum over the next decade, lower than the 1.4 percent p.a.
seen from 1990.
According to the report, electricity demand will increase more than a quarter by 2030, but associated emissions would be 7 percent lower than in 2010.
Transport remains the key challenge in New Zealand’s bid to reduce energy sector greenhouse gas emissions, the outlook says.
As emissions from other sectors remain flat or decline, transport will likely increase its share of total emissions to nearly 50 percent by 2030.
The industry will remain reliant on oil, with electric vehicles and biofuels minor players contributing less than 2 percent of total transport energy demand in 2030.