Renewable Energy

Working Towards 100%:Part 2

Just north of Wellington the rugged coastline is dotted with wind turbines. Construction for Meridian Energy’s Mill Creek 60 megawatt wind farm commenced in 2012 and will produce over 200 gigawatts each year. Local landowners invited tenders to build the wind farm as a means of diversifying their farming income. Situated close to the High Voltage Direct Current inter-island transmission line the power plant will help balance out the transfer of electricity from the South Island when our hydro lakes are low.

Wind energy currently delivers just 5% of our total electricity supply but has the potential to replace all of our existing fossil fuel generation. International innovation is driving down the cost of wind energy. Since the 1990s rotor diameters have doubled and the average height of the turbine hub has increased by 50%. This has increased the generation capacity of a given wind turbine as winds blow faster at greater heights and larger rotors can generate more power at lower speeds.

Last month, the United States Energy Information Administration reported that wind power achieved grid parity in many parts of the country with the wholesale price of wind power falling to US$23.5 per megawatt. In New Zealand dollars that equates to $36.2 per megawatt and is significantly less than the marginal cost of New Zealand’s gas-fired plants.

With our extended shoreline and strong southern winds New Zealand is especially well placed for offshore wind projects. The United Kingdom and Germany show how quickly this renewable advantage can be deployed. The world’s largest offshore wind farm, the 630 megawatt London Array, was commissioned in 2013 and now delivers 2,200 gigawatts of power each year, enough to power a quarter of million homes.

Germany will add more offshore wind this year than in all previous years and is on track to reach 6,500 megawatt capacity by 2020. That capacity is equivalent to eight Manapouri plants (our largest generator of hydro electricity).

The Ministry of Business, Innovation and Employment estimates that New Zealand’s electricity demand will increase by 1.1% per annum over the next 15 years requiring an additional 10,000 gigawatts of annual generation. Given that New Zealand has over six times the length of coastline of Germany, we could easily meet our 2040 energy demands by building the same amount of offshore wind capacity that Germany is adding in just the next two years.

One of the key arguments against wind is its intermittency. What do you do when the wind isn’t blowing? New Zealand’s high proportion of electricity generation from hydro plants allows us to solve this issue. Recent upgrades to the national grid have further enhanced our ability to match hydro generation with times when the wind turbines stand still.

If there’s anyone who understands the risk of power outages, it’s information technology companies and yet more and more giants are switching their data centres to 100% renewable electricity. Apple, Google, Facebook and Amazon have all committed to 100% renewable electricity and are preferring locations with strong growth in renewables. For example, Iowa’s billion dollar commitments to wind energy helped it secure equally gargantuan size investments from Facebook and Google for new data centres in the state.

European innovation is also providing leadership in energy storage to deliver energy when the wind isn’t blowing. An Audi plant in northwestern Germany will soon start converting surplus wind power into synthetic methane by combining carbon dioxide with water in a process called methanisation. Carbon dioxide neutral electricity can then be generated from the methane as the carbon dioxide emitted will be equal to the carbon removed from the atmosphere at the start of the process.

If large scale storage was required in New Zealand a century old technology is available: pumped-storage hydropower. This effectively converts a hydro power plant into a massive grid scale battery. When surplus energy is supplied to the grid, this excess energy is used to pump water uphill into a reservoir that can then deliver gravity fed hydro energy at a later time.

Overseas, start-ups are exploring modern innovations on the pumped storage model. Gravity Power, a Californian based company has designed two vertical shafts, one inside the other, that uses surplus power to raise a giant piston which when it then falls generates electricity by forcing water through a turbine.

Another Californian concept would fit well with Wellington’s generous wind resources and steep terrain. Advanced Rail Energy Storage (ARES) uses surplus energy to pull modified railway cars up a specially built track. As you guessed, when energy is needed the railway cars roll back downhill generating electricity on demand.

Others have argued that wind is not well designed to match peaking demand. Again, New Zealand is blessed with renewable energy advantages to meet this need – geothermal. This week Contact Energy announced it will soon close the Otahuhu B gas-fired power plant. In the 2014 financial year the Otahuhu plant produced 1,700 megawatts of power. Contact Energy’s proposed 250 megawatt extension to its geothermal plant on the Tauhara field, north of Taupo, could replace this power. Contact Energy has already secured consents for the extension. However instead of deepening its investment in geothermal, Contact Energy announced it would re-invest in its gas fired Stratford plant, the same plant that failed to meet its 1990s commitment to sequester the 250 tonnes of carbon dioxide it emits per hour at full capacity.

Wind energy can also be a great match for electric cars. Wind tends to blow at night exactly the time when most cars are parked in their owner’s garages. Perversely, research by National Institute of Water and Atmosphere (NIWA) predicts that by 2040, wind speed in New Zealand will increase with climate change thereby increasing the annual generation per megawatt of wind energy capacity.

Collectively, New Zealand’s major power generators have ten new projects to deliver 2852 megawatts of wind capacity. Consents have already been secured but have been put on hold while demand uncertainties remain. This additional wind capacity would generate almost 10,000 gigawatts of energy each year, one quarter of our annual electricity needs. Next week we will explore the role of solar energy in New Zealand’s path to 100% renewable energy.

About the author

Belinda Storey

Belinda Storey

The Founder of Nouveau Eco, Belinda has 20 years experience advising multinationals in New Zealand, Australia and the United States. Her work has been covered by Radio New Zealand, the New Zealand Herald and Harvard Business Review. Belinda is Chief Consultant Rural Climate Impacts for 350.org Aotearoa and is a Board Member of ShelterBox New Zealand. She is a Member of the Institute of Directors.

8 Comments

  • Thanks Belinda,

    Do you know what Contact Energy’s thinking is behind their decision to reinvest in their gas-fired Stratford plant instead of Geothermal? Also, is the government doing anything to sway companies like Contact towards investing more in renewables?

    • Hi David,

      Contact Energy’s leadership have not clarified their rationale. However, most NZ’s electricity companies have indicated they are reluctant to invest in new renewable plants while Rio Tinto’s threat remains to close the Tiwai aluminium plant within the next 5 years.

      I agree, the government as majority shareholder in most of New Zealand’s major electricity companies should be guiding our electricity companies to future proof our electricity infrastructure by retiring ageing fossil fuel plants and replacing them with renewable energy plants. The current government has given no indication that they see this as a strategic priority.

    • Real NZ Data:
      West Wind wind farm capacity 143MW, FY2014 production 534,000MW
      Te Uku wind farm capacity 64MW, FY2014 production 211,000MW
      Te Apiti wind farm capacity 91MW, FY2014 production 325,000MW
      Source: Meridian Energy Annual Report 2014

      • Fortunately we have the luxury of east and west coasts. This allows us to balance national supply – if the wind stops in one location it is likely to be blowing in another. When no wind is blowing anywhere – a rare event in NZ – we are able to supplement our electricity supply with hydro.

  • Hello Belinda,

    You may need to revise the units that you have used to specify the amount of electricity produced.
    The correct units to use for electrical energy produced would be gigawatt-hours (GWh) per year.

  • I’ve looked at wind outputs from turbines all over the country and there are plenty of times when there is no, or very little, wind generation anywhere in the country for periods longer than demand management could handle. Plus there currently isn’t enough hydro and geothermal capacity to cover peak demand on their own. Wind does work well with hydro – essentially saving water – but hydro and baseload geothermal isn’t enough on its own yet to meet the no wind days. The paper at the following link covers some of the issues of trying to reach 100% renewables in more detail – requiring a large increase in baseload and still some kind of peaking or demand side solution: http://www.thesustainabilitysociety.org.nz/conference/2010/papers/Mason-Page-Williamson.pdf

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