NZ performs well in world energy trilemma index, but slips on security and sustainability
First published in Energy and Environment on September26 ,
An analysis of the World Energy Council’s Energy Trilemma Index shows NZ ranks highly in comparison to other countries, but has slipped in terms of security and sustainability.
The BusinessNZ Energy Council said at 10th out of 128 countries, NZ remained the highest-ranked non-European nation in an index which rates countries on how they achieve a balance of security, sustainability, and equity in their energy systems.
Performance on energy security, equity, and sustainability are ranked against a baseline of 100 set at the year 2000. A slight improvement in equity this year could not offset a fall of 2 percentage points in terms of security, and a 0.7 fall on sustainability.
Despite this NZ achieved a top quartile ranking in every top line priority area, making the country one of 10 to achieve a ‘AAA’ rating.
Energy security factors such as NZ’s import dependence, diversity of electricity generation, and energy storage all fell back in 2018, according to the World Energy Council.
BusinessNZ Energy Council chair David Caygill said, “Recent fluctuations in the security dimensions represent minor reduction in fossil fuel stocks, and slight upturn in import dependence since the late 2000s.”
On policy, NZ’s overall score of 79.4 saw it ranked behind top-rated Switzerland on 85.8, Sweden on 85.2, Denmark (84.7), United Kingdom (81.5), Finland (81.1), France (80.8), Austria (80.7), Luxembourg (80.4), and equal with Germany.
The World Energy Council’s report highlights NZ’s high renewable electricity generation mix, and the Government’s “ambitious decarbonisation goals that are embedded in a commitment to a just transition”.
Australia is the next-highest ranked nation in the Asia region, coming in at 28th with a score of 74.7. The country achieves an ‘A’ ranking for equity, and ‘B’ for sustainability and security.
Japan is the third-ranked Asia region nation, at 31st overall with a score of 73.8. Hong Kong and South Korea round out the Asia region top five, at 34th and 37th overall, respectively.
The report notes “significant progress” in energy equity across the region, but ongoing struggles with security due to heavy reliance on imports. This also has implications for sustainability, as demand growth exceeds the availability of renewables.
“Many countries are developing energy plans that include a focus on renewables,” the report says. “Yet challenges remain including outdated infrastructure; a lack of coordinated national energy policies; limited regional integration; trade patterns; an unbalanced distribution of resources and an uncertain global economic situation.”
BusinessNZ Energy Council executive director John Carnegie said NZ’s ranking over the past few years has been driven by a growing proportion of generation from renewables, as well as managed emissions in the context of economic and population growth.
“Interestingly, NZ has never ranked in the top 10 in any of the dimensions alone. However, due to a sustainable balance of the three dimensions it has remained in the top 10 since 2015. NZ exhibits strength in all three metrics of the Trilemma but should build on these strengths to become a world standard-bearer. In fact, there has never been a greater need for NZ’s government to design policies with the Trilemma in mind, as we peer into an increasingly complex energy future.”
He said this will require the co-operation of government and private partners, financial institutions and the energy sector.
“Policy and investment decision-making have always been complex and are even more so today. The prospect of increasing complexity in energy markets suggest caution is needed in designing policy frameworks while new business opportunities are emerging.”
He said the Governments’ long-term vision should not be clouded by poor modelling and a lack of careful consideration. Bipartisanship also has a role to play in achieving balanced policies.
The Business Energy Council is currently developing a national ‘deep dive’ of the Energy Trilemma and 2060 energy scenario narratives.
First published in Energy and Environment on September26 , 2019.