Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Contact decarbonisation effort gains momentum

Contact decarbonisation effort gains momentum; new contract close

By Gavin Evans

Sept. 27 (BusinessDesk) - Contact Energy says its decarbonisation efforts are gaining momentum, with a new contract close on a project to install an electric boiler for an industrial user.

James Kilty, the firm’s chief generation and development officer, says there is “very real interest” from commercial and industrial users wanting to come off coal and gas.

He wouldn’t name the company Contact has been working with, nor the size of the boiler to be installed. But he said Contact is in necessarily lengthy discussions with several firms. Any agreements resulting will be more in the form of partnerships, including long-term contracts, given the scale of investment required on both sides.

“You’ve got to start at the big end of town,” Kilty told BusinessDesk.

“To make a meaningful environmental and economic difference you have to help the big users with their problems.”

Contact shares last traded at $8.55 and have gained about 45 percent this year.

Heavy industry accounts for about 15 percent of the country’s emissions. Food processing, including dairy and meat processing, is heavily reliant on hot water and steam and accounted for about a third of the almost 9 percent of emissions that came from manufacturing in 2016, according to government data.

Fonterra is trialling both electrification and biomass as part of its emission-reduction strategy. Other firms are switching from coal to gas, or from coal to wood. Synlait Milk installed a 6 megawatt electrode boiler at its Dunsandel plant to reduce its coal use there.

Fonterra, New Zealand Steel, Refining NZ, Oji Fibre Solutions and Pan Pac Forest Products are working with the Major Electricity Users’ Group to test whether a long-term power purchase contract for part of their combined load can bring forward development of renewable electricity at a material scale.

Contact, the country’s second-largest energy retailer, makes more than 80 percent of its electricity at dams on the South Island and at its geothermal fields around Taupo. It is currently drilling at the Tauhara field as part of a plan to expand generation there so it can reduce its use of gas-fired generation, or to provide firms with direct steam field heat for processing.

The firm is aiming to remove about 60,000 tonnes of CO2 by 2022 by helping industrial customers displace about one petajoule of fossil fuels with electricity.

Yesterday, the company said it had increased the emissions reduction it is seeking across its own generation activities and brought forward the target by four years.

It is now seeking a 34 percent reduction in own-generation activities' emissions by 2026 – using 2018 as the base year. The previous target, announced in April, was for a 30 percent reduction by 2030.

It is also seeking a 30 percent reduction in emissions from within Contact’s suppliers’ products and services – so-called scope 3 emissions – by 2026. The earlier target was 15 percent by 2030.

About 80 percent of Contact’s generation emissions come from its gas-fired assets in Taranaki, with the balance from the geothermal business.

Kilty says the emission reduction can be achieved by replacing gas capacity with geothermal. But that did not mean the company was yet committed to shutting its ageing 377-megawatt Taranaki Combined Cycle plant, or that it is going ahead with the first stage of generation development at Tauhara.

He says the new targets are required if the firm’s goals are to align with minimising global warming to the 1.5 degrees targeted in the 2015 Paris agreement on climate change. But they also reflect the firm’s confidence that the reductions are achievable.

The company concluded a steam supply deal with Norske Skog-owned Nature’s Flame business in July, and the firm’s joint-venture with industrial energy specialist Simply Energy has also improved its discussions across that sector, Kilty said.

All those talks take time but some of the firms involved are large and they are “better than long-shots” as prospects, he said.

“This decarbonisation strategy is starting to get momentum.”

Kilty says the drilling at Tauhara is going well and all indications are that the resource will probably be better than the company expected a decade ago when it sought consents for generation development there.

“We’re confident that the resource will provide a significant uplift in megawatts for us,” he said.

The appraisal drilling, due to wrap up early next year, will “position us really well for the next few years of fun.”

(BusinessDesk)


ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Banking: Westpac NZ Lowers Merchant Fees For Small Businesses

Westpac NZ is rolling out a new merchant fee pricing structure that will lead to cost savings for more than 10,000 small and medium Kiwi businesses, and could make contactless transactions more widely available for customers. On 1 September, most ... More>>

REINZ: Million Dollar Plus Property Sales Increase 11.7% Nationally

The number of properties sold around the country for one million dollars or more during the first half (H1) of 2020 increased by 11.7% compared to H1 2019, with 5,426 million-dollar plus properties sold (up from 4,858 in H1 2019) according to the Real ... More>>

Waste: Government To Regulate Plastic Packaging, Tyres, E-Waste

The Government is stepping up action to deal with environmentally harmful products – including plastic packaging, tyres and e-waste – before they become waste. As part of the wider plan to reduce the amount of rubbish ending up in landfills, ... More>>

ALSO:

Bankers Association: Banking Becomes First Living Wage Accredited Industry

Banking has become New Zealand’s first fully living wage accredited industry, leading to nearly 1800 employees and contractors moving onto the living wage and gaining greater economic independence for them and their families. As of today, all ... More>>

ALSO:

Economy: Funding For 85% Of NZ Not-For-Profit Entities Impacted By COVID-19

Results of a recent Institute of Directors poll show that 85% of board members on not-for-profit organisations say COVID-19 has moderately or significantly affected their funding. The ‘pulse check’ conducted in the first two weeks of July looked ... More>>

Volcano Detection: Eruption Alert System Would Have Given 16 Hours’ Warning At Whakaari

An alert system that could have given 16 hours’ warning of last year’s eruption at Whakaari/White Island is ready for deployment, University of Auckland scientists say, with warning systems for Ruapehu and Tongariro the next priority. ... More>>


Property: Queenstown Rents Experience Biggest Drop In Seven Years

Rental prices in the Queenstown-Lakes district saw the biggest annual percentage drop in seven years after falling 28 per cent on June last year, according to the latest Trade Me Rental Price Index. Trade Me Property spokesperson Aaron Clancy said ... More>>

Seismology: The Quiet Earth

As many daily activities came to a halt during lockdown, the Earth itself became quiet, probably quieter than it has been since humans developed the technology to listen in. Seismologists have analysed datasets from more than 300 international ... More>>

RNZ: James Shaw Says Kiwibank, Not Ministers Should Decide On Investors

Climate Change Minister James Shaw says Kiwibank's decision to stop doing business with companies dealing in fossil fuels is the right one. More>>

ALSO:

FMA: Kiwis Confident Financial Markets Will Recover From COVID-19, Plan To Increase Investments

Despite the majority (60%) of investors experiencing losses as a result of COVID-19, the outlook on investing remains positive, according to a Financial Markets Authority (FMA) survey. Most Kiwis (71%) were optimistic that the pandemic will pass eventually ... More>>

FIRST Union: Warehouse Using Covid For Cover As Extensive Restructure Makes Everyone Worse Off

(FIRST Union comments on The Warehouse consultation and proposed restructure) 'Unfortunately the Warehouse have done the disappointing thing and used Covid-19 to justify a bunch of operational business decisions that will leave hundreds of workers without jobs ... More>>

ALSO:

Stats NZ: Mixed Performance By Regions Leaves National Emissions Picture Unchanged

Approximately two-thirds of New Zealand’s regions recorded decreases in their total greenhouse gas emissions, while one-third of regions saw increases between 2007 and 2018, Stats NZ said today. “While some regions reduced their emissions, ... More>>

RNZ: Economic Activity And Business Confidence Bouncing Back

Two surveys from ANZ show business confidence and economic activity have rebounded, but uncertainty about the future remains extreme. More>>

ALSO: