By Gavin Evans
July 31 (BusinessDesk) - Gas must be part of the decarbonisation of the country’s heavy industry if New Zealand is serious about rapid and affordable emission reductions, First Gas chief executive Paul Goodeve says.
Electricity is an ideal option for replacing coal in low-temperature industrial heat operations, he told officials and energy industry executives at a Transpower function in Wellington last night.
But he said gas is much more cost-effective for cutting coal use in higher heat applications. Waiting for improved electrical options misses the chance to reduce emissions much faster, and with greater certainty, as part of the shift toward a net-zero economy by 2050.
“Absolute electrification is not the objective. Net-zero carbon is the objective, and emission reduction is the path to that,” he said in notes for his speech
“Rather than hoping that new technology will arrive, and the economics will stack up, we can reduce emissions now by using a mix of lower carbon electricity and gas equipment.”
Electrification of industry and transportation have been key planks of the government’s strategy for meeting the country’s 2015 Paris climate change commitments. Earlier this month, the Interim Climate Change Committee urged the government to accelerate those efforts but back-off its goals for 100 percent renewable power generation, which it believed would be ruinously expensive and deliver little emissions reduction.
First Gas runs the country’s major gas transmission network and also distributes gas through Northland, Waikato, the central North Island, Bay of Plenty and Gisborne. It is expanding its network to offer gas as a coal replacement and is also investigating hydrogen as a longer-term, lower emission option.
Goodeve was speaking at the launch of a report by national grid operator Transpower advocating greater electrification of industry to reduce emissions, and the need for planning to get underway now for the extra generation and transmission that could be required to deliver it.
Goodeve said the country can achieve immediate emission reductions by swapping to new electrically powered equipment for processes that require heat of less than 100 degrees celsius. It can also achieve immediate reductions of up to 55 percent by converting existing coal-fired equipment to gas for higher heat requirements.
In the North Island, that switch to gas could cut annual emissions by 100,000 tonnes at a fraction of the cost and much sooner than the conversion to electricity, he said. That reduction would be like putting 27,000 electric vehicles on the road without investing in a single extra electricity asset.
“That would give us up to two thirds of the potential emission reduction in process heat within the next three years without having to wait for the very uncertain new technology and economic conditions in a decade or more.”
Gas is a difficult topic for the government. It insists it recognises the ongoing importance of gas for peak winter power generation and dry-year back-up, but has banned new offshore exploration and has not committed to new onshore gas exploration beyond the next three years.
Goodeve noted the ICCC’s strong endorsement of an ongoing role for gas, and also supported many of the findings of the Transpower paper.
But he said the report also reflects human tendencies to put off taking action and a flawed belief that “certainty” can be created by taking bets on future technologies.
“Many of the emission reductions hoped for out of this report are dependent on future predictions,” he said. “Will heat pumps improve their efficiency, will we be able to use heat pumps for high process heat, will the people of the Waikato accept a new transmission line, will we be able to build the generation and network assets necessary to support electrification? These are uncertain.
“To deliver on our 2050 aspirations we need to be making changes right now. To lower more emissions sooner, we need to be agnostic about how it occurs,” he said.
“I endorse the report’s focus on low-grade processing. These are easily changed with cheap, efficient, electrical equipment that does the job very well.
“But the reality is that for all process heat using coal, the easiest, cheapest change is gas. That will halve current emissions for each coal user. And it can be achieved within two to three years.”