Wind energy report released

Energy Minister Trevor Mallard says the potential for wind-generated electricity in New Zealand appears to be greater than previously thought.

"Wind energy could supply around 35 per cent of New Zealand’s future peak electricity demand, according to a study I have released today," Trevor Mallard said.

The study, commissioned by the Ministry of Economic Development (MED) and the Energy Efficiency and Conservation Authority (EECA) considers how much wind-generated electricity could technically be integrated into the New Zealand energy supply system.

“This report shows the potential is very high, and rapid advances in technology are making it possible to tap more of that potential. While it is not intended to be a conclusive study it helps us to look ahead and consider a future electricity supply system with a different mix of generation,” Trevor Mallard said.

"New wind generation proposals are being announced at an accelerating rate. Currently, wind accounts for 2.5 per cent of peak electricity generation, but is the fastest growing sector of the generation market.

"There are some caveats around this study as it does not take into account environmental and economic factors.

“It is also important to note that there are challenges in integrating wind power that are yet to be resolved. But with the advent of new tools such as wind forecasting software, a more diverse distribution of wind farms around the country and turbine technology which has similar characteristics to that of existing generation, the future is looking very positive for wind power.

“We are not expecting the potential to be realised overnight, but wind generation could play a significant part in meeting on-going growth in electricity demand. It will be part of a diverse energy mix to improve security of supply, contribute to the National Energy Efficiency and Conservation Strategy renewable energy target and reduce carbon dioxide emissions under our international Kyoto Protocol obligations,” Trevor Mallard said.

“New Zealand is in a unique position to utilise wind energy, both geographically, and because of synergies with our existing hydro generation. The fluctuating nature of wind works well with hydro generation, which can be switched on and off at short notice, and allows water to be stored when the wind is blowing.”

The report recommends further work including developing data for more detailed and accurate analysis, developing appropriate standards for wind farms connecting to the grid, and methods of forecasting output from wind farms.

“This report is an important first step in learning more about the potential of wind. Further work is now planned between MED, EECA and the Electricity Commission,” Trevor Mallard said.

It is available on http://www.med.govt.nz and on http://www.eeca.govt.nz

Questions and Answers

Why are this report’s findings so different to previous estimates? Previous estimates have been largely ‘best guesses’ and supposition – this is the first time a significant publicly available study has been done into the potential for integrating wind energy in New Zealand.

What work are you doing now to further this research? As noted above, and in the report itself, there is a lot of work to further develop the analysis in the report and confirm the assumptions made in the analysis.

What does this report mean for decisions around the siting of wind turbines in future? The report is outlining the technical constraints and does not take into account the environmental issues or the RMA process, in terms of the sites for turbines. The considerations for granting resource consent for wind farms will remain the same.

How many wind turbines would be needed to get a 20 per cent market share for wind? Based on existing turbine technology, about 800 to 2000 turbines would be required to achieve this level of energy generation. These turbines could be accommodated in about 50 medium scale wind farms.

If we have more wind, do we need to have ‘double’ generation to cover the fluctuations? No. Initially at least, the variability in wind generation’s output will be covered by existing hydro-generation as the water can be stored until such time as the wind is not blowing. As more wind generation is developed, diversity in the locations of that wind generation will minimise the impact of any swings in output. Periods of no wind all over New Zealand are unlikely or at least for only short periods.

What changes would need to be made to the electricity generating system to cope with a wind input of the magnitude suggested by this report? How feasible are such changes? There are likely subtle changes necessary to ensure appropriate signals within the electricity market, given the increased output variability of wind power. This is normal practice, the market evolves to incorporate the inherent traits of different generation technologies. It is possible such changes could occur over many years.

What energy source would get turned on or off to accommodate wind fluctuations? As we have a competitive electricity market, this depends entirely on participant behaviour. However, in general hydro is a natural partner to wind as hydro can change output relatively quickly to respond to wind-generation’s variability, and water can be stored when the wind is blowing.

What is the methodology of the report? A methodology has been developed to quantify the technical and operational potential for integrating wind power. The methodology uses a ‘top down’ analysis whereby the essential volumes of generation required to operate (e.g. to provide the ancillary services of frequency reserves and instantaneous reserves) are subtracted from the generation required in a given half hour. The methodology aims to subtract all essential generation, with the remaining non-specific generation being the potential limit to wind integration.

Who are the writers and what are their credentials? Energy Link Ltd and MWH NZ Ltd have written the report. Energy Link is one of New Zealand's leading independent providers to the electricity and gas industries and to major users providing a wide range of modelling, analytical and advisory services. They have extensive experience in the development of the electricity industry in New Zealand over the past decade in both the demand and supply side. MWH is an international engineering, environmental, technology and management consultancy operating in over 37 countries with 6,100 employees. The New Zealand business has more than 600 staff working with public and private sector clients from 22 offices around the country.

Will increased wind generation, which is more expensive than coal, lead to a rise in electricity prices? The economics of wind power relative to other technologies varies over time. However, it appears that wind power is very competitive with other generation technologies at present, and will be more so once the carbon charge comes into effect. A key advantage of wind power over fossil fuel technologies is that it is not subject to the ongoing fuel price and availability risks of say gas-fired generation.

Given the potential of wind, will the government be offering cash incentives for developing that potential, as it is for gas exploration?

Wind generation appears to be economic in its own right at some of the better sites around the country, thus incentives are not always required. However, for less viable sites carbon credits can be gained through the Climate Change Office’s ‘Projects to Reduce Emissions’ programme. The introduction of the carbon tax in 2007 will be an added incentive for the electricity industry to give greater consideration to generation options such as wind that do not produce greenhouse gases.

Will the government be favouring wind over other energy options in future? The Government aims to encourage and facilitate a transition to renewable sources of energy, and this is reflected in the National Energy Efficiency and Conservation Strategy. However, at an operational level, the electricity market does not favour one type of generation over another, so wind-generated electricity must coexist with other generation technologies. Wind power will be a part of the mix of technologies contributing to New Zealand’s future energy needs.

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