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Transpower says Govt has to lead the way on electrification

Transpower says Govt has to lead the way on electrification

First published in Energy and Environment on May 23, 2019.

Transpower says the Government needs to do more if it wants to electrify the economy and meets its energy and climate change targets.

Transpower’s submission to the Ministry of Business, Innovation and Employment’s discussion paper on process heat says the sector has several important challenges, including significant investment in new renewable generation and associated transmission connections, new transmission investment, changes to the roles of networks (to enable new technologies and more complex trading relationships), and the increased importance of system reliability and security of supply.

“Only by focusing on both electrification of transport and process heat as well as enabling new renewable generation will NZ be able to achieve its ambition to decarbonise.”

Transpower said MBIE should focus on starting electrification with low and medium temperature process heat plant categories where technical solutions are proven and economic today. “This will be a key steppingstone towards wider electrification of process heat.”

The SOE said MBIE should recommend the Government take a leadership role. “This could involve leading the way with the electrification of hot water, space heating and sterilising needs for public hospitals, prisons and schools”.

They agreed the time required for obtaining resource consent for an electrical connection and/or a new electricity generation facility can be long, with the cost involved uncertain and prohibitive for some businesses.

Because of this more work was also needed to develop National Policy Statements for renewable generation and transmission. Transpower said “MBIE and the Ministry for the Environment (MfE) should complete their Outcome Evaluation Report on the National Policy Statement on Electricity Transmission (NPSET), and the Government amend the National Policy Statements on Renewable Electricity Generation (NPSREG) and the NPSET to facilitate investment in renewable generation, and the transmission infrastructure necessary to support the electrification of process heat.”

There was also not enough information about the benefits and costs of electricity versus fossil fuels.

“In our view, there is a lack of robust information comparing the price of electricity to other fuels for process heat… We understand EECA has done some work in this area. We encourage it be made more commonly available and cited as a reference.”

While electricity is fundamentally more complex to store and transport than other fuels “there are a number of consequential and ongoing costs associated with the infrastructure and personnel required to enable storage and transportation that are often not taken into account when identifying the cost of the given fossil fuel.”

Transpower appreciated the electricity sector will need to meet several challenges, including significant investment in new renewable generation and associated transmission connections, new transmission investment to meet increasing demand, and the continuing focus on robust management of system reliability and security of supply. “We are of the view that, once transitioned, electricity is no more complex to manage than other fuels (and in many cases will be easier)”.

The SOE also said it had more work to do as multiple new grid connections will be required before 2050 to connect new industrial process heat plants, and renewable generation. “Transpower is required to ensure the transmission system meets prescribed security and reliability standards. This is our focus when we design and build our transmission assets. These regulatory obligations necessitate us to consider the impact of increasing, decreasing and/or changing capacity on the system as a whole and not working on part of the system in a vacuum. Taking a holistic view and addressing consequential needs on the system is something we could explain better to our current and potential customers.”

First published in Energy and Environment on May 23, 2019.

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