Uplift In New Renewable Electricity Generation Projects
A report commissioned by the Electricity Authority Te Mana Hiko shows the amount of new renewable electricity generation that has been committed has almost doubled in 18 months.
The Generation Investment Survey released today shows that there is now, based on annual output once built, 5,000 Gigawatt hours (GWh) of new generation committed. This is up from 2,600 GWh from the previous survey in July 2022.
The majority of the new committed investments are geothermal, solar or wind projects.
"It is heartening to see generators responding to market signals and committing to new generation projects over the last couple of years," says Electricity Authority Chief Executive Sarah Gillies.
"Demand for electricity is growing as the country moves away from fossil fuels and more renewable sources of energy take their place. It is vital that this level of investment continues to support the economy’s electrified future.
"We are focused on fostering that investment by providing the right conditions for those multi-million dollar decisions to be made. It is also encouraging that many of the new developments are being undertaken by generators that are new to the market."
The Concept Consulting survey identifies committed projects as those where the unconditional final investment decision has been made. All currently committed projects are expected to be built by 2026. The survey found that the annual development rate, based on projects that have either been completed or committed, for the period 2021-2025 is more than three times the rate from 2011-2020.
In addition to the committed generation, the survey has identified an additional 20,800 GWh of projects that are being actively pursued and could be completed by 2027, which is up from 12,700 GWh at the last survey.
"Even more new generation will be needed to support projected future demand growth and the retirement of some sources of generation but the survey shows that there are a range of projects utilising different sources of generation in the pipeline," said Gillies.
The report also notes the importance of investment in distribution. The Electricity Authority already has work underway to reform distribution network settings and distribution pricing to enable innovation and investment. This work seeks to reduce any regulatory barriers and encourage efficient pricing for all consumers.
The Electricity Authority is an independent Crown Entity with the main statutory objective to promote competition in, reliable supply by, and the efficient operation of, the electricity industry for the long-term benefit of consumers.
The additional objective of the Authority is to protect the interests of domestic consumers and small business consumers in relation to the supply of electricity to those consumers.