Heightened imports of biofuel will be needed for any significant “greening” of New Zealand’s electricity supply, according to a new report.
That's because domestic sources of biofuel are costly or impractical ways of generating the 15% of New Zealand’s electricity useage that doesn’t come from existing renewable sources.
The report casts doubt on the viability of the previous government’s plans to make electricity 100% renewable by 2030. This plan was subsequently dumped by the current government.
The report was written by the consultancy, WSP, for the Ministry of Business, Innovation and Employment (MBIE).
It was released along with over 40 other documents related to the NZ Battery Project. This project had been commissioned by the previous government to find ways to plug the supply gap when calm weather idles wind turbines and poor rainfall leaves hydro dams low. The now-dumped pumped hydro scheme at Lake Onslow dominated this programme.
But the team behind the NZ Battery Project investigated other schemes besides Lake Onslow, and so-called green peaking plants were among them.
These would be switched on quickly to meet peak demand for electricity when so-called base load generation is insufficient. This would typically happen at 6pm on a freezing night in winter, when heaters, TV sets and electric cookers are working full blast throughout the country.
Traditionally, gas-fired peaking plants have been used to plug this gap, along with the big boilers at Huntly, which burn a lot of coal. But why use fossil fuel? Surely, clean fuels could be used in peaking instead. One option would be hydrogen, which comes from water and is turned back into water after combustion. Alternatively, hydrogen can be “stored” in ammonia, which is later “cracked” to release the gas.
Other renewable fuels are made from plant matter. They are carbon-neutral, since the CO2 released during combustion was absorbed from the air during plant growth earlier.
However, the WSP report suggests using biofuels for peak electricity use is easier said than done, for reasons of expense and practicality.
In their report, the WSP writers assume total capacity for peaking plants would be 800 megawatts, or half as big again as the Benmore Dam. They would have to be fully workable in less than an hour and be able to run continuously for over a week. The writers looked at 11 different classes of green fuel, such as green methanol, and methane from biogas and found faults with 10 of them. Only imported ethanol made the grade.
“Methanol is not considered further because it is unclear whether an international market exists,” the team writes.
“And while much methanol is made in NZ, it is all from fossil fuels. Methanol can be created from biomass, however this is not considered to be mature technology at large scale.
“Biogas is not considered to offer a sufficiently large resource, and the costs of accumulating compressed biogas would be significant.”
Ethanol produced locally from lactose is also discounted in the report. This is due to uncertain availability of lactose from dairy whey, as well as competition for land to grow crops for biofuel compared with using that land to grow food.
“While the processes for producing ethanol from corn or barley are well-known, both crops require use of prime agricultural land and compete for food production, and so are not considered a viable long-term solution,” the report says.
It adds that using enzymes to break down cellulose from softwood is possible but is considered technologically immature at present.
The report also finds fault with biodiesel, saying using it to fire an electricity peaking plant would produce very expensive power. As an example of the difficult economics of this fuel, it cites the closure of a biodiesel plant by Z Energy due to rising costs of its raw ingredient, tallow. And the report goes on to run down the use of hydrogen, either directly or via ammonia.
The report concludes that electricity peaking generators powered by imported biofuels are realistic, and says some infrastructure for gas importation already exists. But its capacity would have to be expanded, and the report has questions over reliability of overseas supply.
“Fuel importation carries a high risk of supply-chain disruption or of market trends that are outside NZ’s control,” the report reads.
“For an application requiring modest volumes spread relatively evenly, New Zealand can mitigate the supply chain risk with modest levels of stockpiling,” it says.
“But the renewability credentials of imported biofuels will require further investigation to ensure that 100% certified renewable biofuels can be sourced.”
Despite these niggles, the report finds general favour with the use of imported biofuels for peak electricity generation.
It says ethanol is imported already via the Port of Tauranga to augment motor fuel sold by Gull NZ. It is mainly sourced from sugar cane grown in Australia, Asia or Brazil.
It says future prices are hard to gauge, due to uncertain future demand, growing need for land for food production and unpredictable world events. However, it suggests 2020 prices will rise 20% by 2030 and 50% by 2065, over and above inflation.
The report did not look at transportation costs.
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