Monday 10 November 2003 Media Statement

Energy modelling highlights benefits of efficiency

The way increased energy efficiency can hold back the price of electricity is highlighted in a new Ministry of Economic Development publication released today, says Energy Minister Pete Hodgson.

The Ministry's Energy Outlook to 2025 models possible energy futures for New Zealand under a range of scenarios.

"The Outlook does not attempt to project what will actually happen in the energy sector, but it provides useful insights into the possible medium- and long-term effects of different policies and developments," Mr Hodgson said.

"It is particularly interesting in my view that the scenario producing the lowest price path for electricity includes the effects of the National Energy Efficiency and Conservation Strategy and a carbon charge. A low energy efficiency scenario leads to significantly higher cost electricity generation and higher prices."

Increased use of renewable energy sources for electricity generation is also projected in the scenario that assumes energy efficiency and climate change policies are implemented. Geothermal and wind generation, in particular, are projected to grow rapidly.

It is projected that about 3355 MW of new electricity generation capacity will be required between 2000 and 2025 to service demand growth. The Outlook modelling suggests this will comprise about 890 MW of hydro, 635 MW of geothermal, 630 MW of wind, 800 MW of combined cycle gas, 50 MW of distillate and 350 MW of cogeneration.

“It can be safely predicted that none of the scenarios explored in the Outlook will come to pass exactly as described," Mr Hodgson said. "But the range of possibilities examined makes this a very useful source of information for everyone with an interest in New Zealand's energy future."

See also... Executive Summary of Energy Outlook to 2025

http://www.med.govt.nz/ers/en_stats.html

© Scoop Media