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MED publishes suite of reports

18 August 2006

MED publishes suite of reports as part of NZ Energy Strategy

The Ministry of Economic Development has published a suite of reports on energy topics today. The reports are intended to inform New Zealand’s energy policy debate, including development of the New Zealand Energy Strategy.

The reports are: New Zealand’s Energy Outlook to 2030; Emerging Supply-Side Energy Technologies; Heavy Industry Energy Demand; New Zealand Energy Indicators; New Zealand Energy Indicators - Supporting Information; New Zealand Energy Indicators - Scoping Report; Domain Plan for Energy Sector
2006 – 2016; and Energy Greenhouse Gas Emissions 1990-2005.

The Energy Outlook report has traditionally been produced every three years, and the Energy Greenhouse Gas Emissions report is published annually.

The other reports are new ones, with Energy Indicators being one that will be regularly produced in future.

Several of the reports are written by consultants, and none should be taken as representing any particular policy direction Government might take in the final NZ Energy Strategy document.

The draft New Zealand Energy Strategy document is expected to be published in early November, and will be available for public submission then.

BACKGROUND:

New Zealand’s Energy Outlook to 2030

Energy Outlook is designed to be the starting point for anyone wanting to become more informed about the energy choices New Zealand faces.

A prime feature of the publication is a set of 25-year projections of New Zealand energy supply, demand, prices, and greenhouse gas emissions. A Base Case projection, which assumes “business as usual” with no major changes in policy, provides a standard of comparison for all of the other cases. This case is designed to show the energy challenges New Zealand faces. The Base Case projects a 35% increase in primary energy use, a 30% increase in greenhouse gas emissions, and modest increases in energy prices over the next 25 years. Oil use would grow by about 35% under this scenario. Geothermal energy supply would increase by about 75% and wind energy by about 1000%. National (or domestic) transport is the largest source of growth in energy demand in both percentage and absolute terms, and would be expected to grow by about 35%, with road transport accounting for about 75% of this growth.

The Base Case is not the Ministry’s or the Government’s expectation of what is going to happen. Many things can be done to improve on this outcome. The rest of the document explores various possibilities for how New Zealand’s energy system might respond to a wide range of hypothetical changes in the business environment.

A concluding chapter, titled “Seeking Solutions” examines two scenarios for achieving a New Zealand energy system that is secure, environmentally responsible, and affordable. Both scenarios assume significant improvements in energy efficiency. One of the scenarios is based on the development of renewable energy, including ocean wave energy for electric power generation and biofuels for transport.

The other scenario is based on the application of carbon capture and storage technology, which would store the carbon dioxide emissions from fossil fuel combustion underground. This scenario would allow development of Southland lignite (soft coal) while reducing greenhouse gas emissions. Transport in this scenario would transition to ‘plug-in’ hybrid vehicles, which could be powered much of the time by batteries charged from utility electricity. The results suggest that both scenarios would achieve significant reductions in oil imports and greenhouse gas emissions without major increases in consumer costs.

The Energy Outlook results are expected to provide baseline projections and stimulate creative thinking for the development of the New Zealand Energy Strategy (NZES). The draft NZES will be published by early November, and then the public will be invited to make submissions.

The report can be found at http://www.med.govt.nz/energy/eo/.


Emerging Supply-Side Energy Technologies

The Emerging Energy Supply-Side Technologies report was prepared for the Ministry by PB Power, a subsidiary of Parsons Brinckerhoff, a worldwide consulting engineering firm. The report discusses the likely costs and availability of thirteen emerging international energy supply technologies.

The report was used as an input to the Ministry’s Energy Outlook publication.

Technologies examined are: ocean wave power; tidal height and current power; fuel cells (gas); photovoltaics (solar); marine distribution of compressed natural gas (CNG); superconducting transmission; microturbines (gas); pebble bed nuclear reactors; integrated gasification combined cycle (coal); hot dry rock (geothermal); Kalina Cycle (geothermal); and biofuels (renewable substitute for oil).

The report concludes that wave power and integrated gasification combined cycle (a low emission form of coal-fired electricity generation) are likely to become viable sources of electricity generation in New Zealand within 25 years. The report is not intended to provide specific recommendations on future energy policies, but instead to describe the various emerging technologies, estimate their future commercial viability, and identify any other issues associated with them. The report is expected to be a valuable input to the development of the New Zealand Energy Strategy.

The report can be found at http://www.med.govt.nz/energy/modelling/papers/.

Heavy Industry Energy Demand:

This report was written by Covec Consultants for the Ministry of Economic Development. It provides projections of energy demand for six industrial sectors (steel, aluminium, petrochemicals, oil refining, forest products and dairy processing) out to 2025. These sectors use approximately 20 per cent of all energy used in New Zealand.

Dairy processing is the only one of our six heavy industries projected to experience major growth in energy demand. World demand for dairy products is growing rapidly, and, as one of the world’s low-cost producers, New Zealand is well placed to help meet this demand. The report projects modest expansion in the steel and oil refining industries, where New Zealand producers also face a favourable competitive situation. New Zealand’s aluminium, forestry, and petrochemicals industries face a more difficult competitive environment. Their energy demand is projected to remain stable, however the future of these industries will be heavily dependent on developments in the international market for their products and New Zealand’s exchange rate relative to other key currencies.

The report can be found at http://www.med.govt.nz/energy/modelling/papers/.

Energy Indicators:

The New Zealand Energy Indicators publication (and the two associated papers) presents and explains movements in a core set of high-level indicators, which collectively represent the performance of New Zealand’s energy sector. These indicators present information on: - Security of Supply, - Efficient Economic Performance;- Efficient and Fair Pricing; - Access to Affordable Energy; - Adverse Effects from Energy Production, Distribution and Use.

These indicators are in the process of development and may change over time as new/revised policy objectives emerge from the development of the New Zealand Energy Strategy and as new data become available.

Key findings:

- There is an overall decoupling of Total Final Energy Consumption from economic growth as measured by GDP for the period 1990 to 2005. This is due to decoupling during the mid 90’s. However, more recently, changes in energy demand have generally matched economic growth.

- New Zealand’s net import dependency has more than doubled since 1990 (from 10 to 24 percent). Net oil import dependency is extremely high at 81 percent in 2005, 80 percent higher than in 1990 (45 percent).

- Reliability of electricity as measured through the national average number of outages and the national average duration of the outages has improved for the period 1995 to 2005.

- Energy related greenhouse gas emission are 38% higher than 1990 levels.

- National level energy intensity as measured by Total Final Consumption/Gross Domestic Product ($000/GJ) has improved by 11 percent since 1990.

- The average proportion of total household expenditure on domestic fuel and power (electricity, coal, firewood etc) has increased from 2.5 to 3.1 percent of total expenditure for the period 1988 to 2004 (20 percent increase).

- The average proportion of total household expenditure on fuel for vehicles (petrol, diesel, LPG etc) has decreased from 3.8 to 3.4 percent of total expenditure for the period 1988 to 2004 (11 percent decrease). Recent rises in fuel costs would not yet be reflected in the data.

- New Zealand’s trend in real energy prices mirror trends in the OECD average. Industrial electricity prices are slightly higher than Australian prices.

The report can be found at http://www.med.govt.nz/energy/indicators/.

Energy Domain Plan:

The Energy Domain Plan is an initiative lead by Statistics New Zealand in conjunction with the Ministry of Economic Development and the Energy Efficiency and Conservation Authority (EECA) to assess the current state of energy data and propose initiatives for filling the gaps.

The domain plan itself aims to:

- identify the key enduring topic areas that need to be informed by Official Statistics;

identify the data sources that currently inform these topics;

- identify the topic areas that are most in need of enhancement; and

- propose a set of initiatives to be undertaken to strengthen Official Statistics in the Energy Sector

Like the reports on energy indicators, the Energy Domain Plan is very much a work in progress and further input and consultation is needed.

It can be found at http://www.med.govt.nz/energy/info/domain-plan/.

Energy Greenhouse Gas Emissions 1990-2005:

This report provides the background material used in preparation of the annual projection of New Zealand's greenhouse gas emissions during the first Kyoto commitment period.

The report shows energy-related greenhouse gas emissions increased slightly in 2005, compared to the year before.

However the main change was an increase in emissions for thermal electricity generation.

For the first time since 1990, there was a slight decrease in transport emissions.

The report can be found at: www.med.govt/energy/ghg/.

The reports should all be live now.

ENDS

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