MBIE energy report highlights need for more electricity generation

Technology / news

MBIE projects 80% increase in electricity demand by 2050 and expects 92% of NZ’s electricity to come from renewable sources by 2035

3rd Jul 24, 3:32pm by Ella Somers

Photo by Dan Meyers on Unsplash

The Ministry of Business, Innovation and Employment (MBIE) says New Zealand must boost electricity production to meet future demand as the country transitions from fossil fuels to electricity.

The latest Electricity Demand and Generation Scenarios (EDGS) report from MBIE, released on Wednesday, shows wind and solar are the most likely sources to generate enough electricity to meet future demand long term.

EDGS is a set of independent scenarios that looks at future electricity demand and the generation capacity needed until 2050.

The Commerce Commission uses these scenarios to review Transpower’s future investment proposals for the transmission grid.

MBIE modeled five scenarios to capture a range of potential futures which included growth, constraint, innovation and environmental scenarios against a reference or baseline scenario. MBIE reiterated the scenarios were not future forecasts and shouldn’t be interpreted as such.

Public consultation over the 2024 report was undertaken over May and June 2023.

According to Wednesday’s report from MBIE, the growth scenario found short-term energy growth will be driven mainly by the commercial and industrial sectors, with electric vehicles (EVs) becoming a bigger factor starting in the late 2030s.

“Demand for electricity is expected to grow as existing fossil fuel use switches to electricity, higher uptake of electric vehicles, and new demand – such as large-scale datacentres coming online,” MBIE Markets Manager Mike Hayward said.

“By 2050, it is expected around half of all energy demand will be met by electricity.”

The report found electricity demand will rise by 80.9% by 2050, from 39.6 terawatt-hours (TWh) today to 71.7 TWh.

By 2035, 92.1% of New Zealand’s electricity is expected to come from renewable sources, including 45.7% from hydro, 20.3% from wind, 19.2% from geothermal, 5.6% from solar, and 1.4% from other renewables.

MBIE’s report projects generation from renewable sources will make up potentially between 96.3% and 98.3% of the country’s electricity by 2050.

Wind and solar power will likely be the main sources of new electricity because they’re getting both cheaper and better and MBIE expects new hydro and geothermal plants will also be built.

However, new gas peaker plants will be needed to ensure there is enough capacity to handle peak demand.

Gas peaker plants are plants that only work during high-demand periods to balance the electricity grid.

“The 2030s see considerable change in electricity demand and generation, with increased demand for electricity and existing coal and natural gas electricity generation capacity expected to retire,” Hayward said.

“While modeling shows increased renewable energy generation will most likely be used to meet the additional demand for the next 26 years, it also shows that gas will continue to play a role in providing support to the electricity generation market”.

MBIE said the amount of energy support needed in the system for peak demand varied by scenario, with better load distribution and more batteries reducing the overall capacity required in MBIE’s environmental and innovation scenarios.

Under the report’s reference scenario, electricity generation emissions were projected to fall to 2.5 million tonnes of CO2-equivalent by 2050 but ranged from 1.6 to 2.8 million tonnes in other scenarios.

MBIE said key factors included the closure of major thermal plants – with Contact Energy signaling its intention to close the Taranaki Combined Cycle gas plant at the end of 2024 – and the switch to renewable energy sources, with emissions expected to stabilise by the mid-2040s.

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44 Comments

by Palmtree08 | 3rd Jul 24, 4:09pm 1719979798

Did MIBE think of a cheaper option? Let population decline, cut out waste and maintain what we have? Thought not. Infinite planet religion.

by Colonial Viper | 3rd Jul 24, 6:14pm 1719987292

It isn't possible to "maintain what we have" with a declining and aging population that is exiting the workforce. As for population growth on this planet, we have no say over what India, South America or Africa does. Anglo countries all have fertility rates below replacement so that "population decline" you are talking about refers to stopping immigrants from coming into NZ. Labour and Greens will never allow that because racism.

by niel | 3rd Jul 24, 8:15pm 1719994547

Kiwi's are so kind to share the electricity with people like me. I do find them to be racists though and it is only because of us that they have a first world country. We are hard working immigrants and come here because kiwi is not clever enough to manage business or infrastructure. Without us there would be no electricity in this country.

by Ocelot | 4th Jul 24, 10:10am 1720044620

Accusing kiwi's of racism while being racist about kiwi's? I don't think you're as clever as you claim to be.

by mfd | 4th Jul 24, 10:43am 1720046597

I think they are trolling. Probably best to ignore and leave them to it.

by Palmtree08 | 3rd Jul 24, 11:22pm 1720005735

There's plenty of people to do essential work. Just clear out the BS jobs. You know? Like the ones sent home during COVID and no one noticed?

by niel | 4th Jul 24, 7:22pm 1720077768

We do the fibre because kiwi don't know how and bring out advance optic skill as skill migrant. We fix power line and make sure kiwi can have electricity. Kiwi is not capable of developing first world infrastructure.

by niel | 5th Jul 24, 6:53am 1720119202

White people should be sent back to Europe, they don't belong here, they are lazy and stupid. We own all the businesses now and we also own electricity retailers, we own this country, this country belongs to us, its our place and not theirs. over 100,000 of us came to Auckland last year and in 5 years there will be more of us than there will be white people in Auckland. What we do and how we live is how this country will be. White people who were born here don't deserve to live here, they live off that which was given to them and not that which they earnt. We are the one who have earnt the right to live here and not them, they should leave, they do all the BS jobs, not us. If there are enough of us, we can make them leave like the Muslims had to, at home.

by Palmtree08 | 5th Jul 24, 2:19pm 1720145957

Shouldn't you be working your third job instead of commenting here? Your 15 kids and five wives haven't eaten in two days.

by powerupkiwi | 3rd Jul 24, 8:15pm 1719994520

Stuff that. Stagnation and poverty is not cheap.

by Palmtree08 | 4th Jul 24, 9:49am 1720043372

Don't worry powerup, burning out the planets resources while exponentially increasing demand for them, will get us to the same place, except with environmental devastation and depletion to also deal with. :-)

by AlfaKentaur | 3rd Jul 24, 4:11pm 1719979860

And how much land will need to be sacrificed to achieve 20.3% from wind and 5.6% from solar?

by False economies | 3rd Jul 24, 4:34pm 1719981264

Wind could be off shore?

by Larry76 | 3rd Jul 24, 4:39pm 1719981584

Offshore wind. Turbines on the same land as livestock. Turbines on marginal hill side land. Agrivoltaics. Panels on warehouses. Panels on residential roofs.

There you are - solved.

by Colonial Viper | 3rd Jul 24, 6:10pm 1719987038

1) What is the reliability and cost of establishing and maintaining offshore wind generation compared to other generation including grid connection?

2) What are the effects of turbines and infrasonic vibrations on livestock?

3) What is the reliability and cost of establishing and maintaining turbines on marginal hill side land and connecting it to the grid?

4) How is installing masses of solar panels going to be made profitable for farmers, commercial building owners and property developers?

5) How are we going to maintain good relations with China so that we can keep accessing their solar technology?

by Chris Morris | 3rd Jul 24, 7:33pm 1719992032

From published accounts in the UK, offshore wind costs about $400 a MWh - about three times the wholesale price power currently is. Look at the subsidies they are demanding to build offshore wind in US or Europe. That is why all the contracts are falling through with wind companies paying penalties to get out of contracts. And the firms are losing money.

As well, installation costs are going up not down. Reliability is going down and no-one wants to deal with the fact that much of the componentry isn't economically recyclable.

by Colonial Viper | 3rd Jul 24, 9:42pm 1719999752

Plus when site componentry fails unexpectedly under stress it can place sudden demands on the grid causing other problems. The attitude that you can wave a magic wand and these renewables will just appear and start fixing our problems is little short of technical and engineering ignorance. Thanks for adding some technical and economic reality.

by nigelh | 3rd Jul 24, 9:45pm 1719999945

a bit more detail (not all bad but wouldn't hold my breath on the good)

https://www.washingtonexaminer.com/policy/energy-and-environment/244082…

THE BACKSTORY – ORSTED HALTS TWO NEW JERSEY PROJECTS: Orsted, the world’s largest offshore wind developer, cited higher costs and supply chain delays in announcing today that it is halting development on two New Jersey offshore wind farms, Ocean 1 and Ocean 2, that were expected to create roughly 2,248 MW in offshore energy generation.

.......

These conditions have prompted developers to renegotiate or pull out of contacts completely, all but ensuring the Biden administration’s 30 GW offshore wind goal by 2030 will not be met. Read more from Breanne here.

some good news

........

MEANWHILE, IN BETTER NEWS FOR OFFSHORE WIND…: The Biden administration announced Tuesday approval of the Coastal Virginia Offshore Wind Commercial project – the largest commercial-scale U.S. offshore wind project, which is expected to provide roughly 2,600 MW of capacity.

by SilverSnake | 3rd Jul 24, 4:45pm 1719981921

If we take Meridian's Ruakaka solar farm as an example, that's expecting to produce around 150 - 200 GWh/year from a 172 ha solar farm. So with about 1 GWh per ha, 4 TWh of power would require around 4000 ha (or 40 sq km). That's assuming no improvements in solar efficiency, plus a not insignificant amount of this will be stuck on rooves - so compared to other land uses, not really that much. Lake Benmore alone has a surface area of 75 sq km, for just over half the generation potential (granted it does act as a battery to some extent which solar does not).

Turbines use barely any land for the power they generate and we may well end up with huge offshore farms, so not really a big consideration in the grand scheme of things.

by Colonial Viper | 3rd Jul 24, 9:50pm 1720000247

Hydro is also very handy during the times solar is weak e.g. in the middle of winter with short day light hours and long nights.

by Avalanche | 4th Jul 24, 9:20am 1720041643

Why not floating panels on lake benmore then?

by Chris Morris | 4th Jul 24, 6:12pm 1720073573

Google what happens to floating solar panels. It didn't even get commissioned before it was destroyed.

by morepork | 3rd Jul 24, 5:15pm 1719983711

For wind, given we generated a shade over 3 TWh last year (7% of total generation), it would be 4-5x as much land as today assuming none is built offshore, and turbines of the same quality. So not that much really.

by Poission51 | 3rd Jul 24, 5:22pm 1719984167

With 2500 GWh of renewables commissioning this year,and demand still flat,it is likely we will pass 92% renewable in 2025.

by Colonial Viper | 3rd Jul 24, 6:16pm 1719987363

2500 GWh of renewables is what, 800MW worth of generation? China greenlit 114GW of coal fired power last year, in comparison.

by Poission51 | 3rd Jul 24, 7:10pm 1719990649

Under 500 MW and no fuel cost for geothermal,wind and solar.

by M0ralHazard | 3rd Jul 24, 7:15pm 1719990913

Maybe we should look at ways of getting that consents turned into generation? Maybe break up the Gentailers like they did with Telecom / Chorus

by mfd | 4th Jul 24, 9:07am 1720040869

He said commissioned, not consented. The gentailers are going pretty hard on building renewables right now, especially since the Tiwai agreement. Plus other generation-only companies are coming in so the market doesn't seem to be stopping new supply. Overseas capital building solar farms, NWF repowering their wind farm etc.

by powerdownkiwi | 3rd Jul 24, 5:25pm 1719984345

This is pipedream territory.

Firstly, renewables are all solar in origin - if you put PV on paddocks, you grow less grass (It would appear some folk think we can have our cake and eat it to - physics doesn't work like that.

And GROWTH is over - it took energy to grow, and there ain't enough to peddle more. So this is displacement of FF, no more. And FF are currently 60% of our energy mix.

My guessing is that we will be having trouble even maintaining the existing grid, beyond 2030/35, and will be experiencing blackouts and regional separations. Projecting from back-casting is always fraught.

by M0ralHazard | 3rd Jul 24, 7:29pm 1719991794

So what should we be doing then to ensure we have sufficient electricity in the future? Solar and Batteries on an individual level?

by powerupkiwi | 3rd Jul 24, 8:17pm 1719994656

Probably just let other countries push the solar cost curve down and be late adopters of utility scale once it’s cheap enough. As per usual.

by chemistpeter@g… | 3rd Jul 24, 6:00pm 1719986407

On the way to unreliable electricity without changing the world's temperature.

by Colonial Viper | 3rd Jul 24, 6:16pm 1719987386

It's the thought that counts, I guess.

by phalanax | 3rd Jul 24, 9:01pm 1719997291

I am trying to not think about every power bill, that has ever been paid, every month for decades, by every household. As much as I try to understand why theres never enough capital available to expand generation output ,I am forced to conclude that theres no money to be made in having excessive output. Could it be that too much output is bad for business, it means cheap prices.....lol

by solardb | 4th Jul 24, 8:12am 1720037528

You got it, the market at work.

by It's all shits… | 3rd Jul 24, 9:23pm 1719998605

NUCLEAR POWER......

by Colonial Viper | 3rd Jul 24, 9:53pm 1720000435

This is the obvious choice. 4th generation nuclear right now (with sixty to eighty year plant lifetime), and hopefully in ten years time, salt cooled thorium. Ten years after that - fusion reactors from China.

by It's all shits… | 4th Jul 24, 8:28am 1720038526

I cant imagine the luddite hordes that live here even thinking as far into the future as that.Their fear is irrational, hindering their ability to adapt and thrive in an ever-evolving world.

And so we will still be talking about this issue as a problem in another two decades.

by powerdownkiwi | 4th Jul 24, 9:52am 1720043522

There have been some silly comments on the thread, but that perhaps wins the prize.

1 - Fossil carbon is finite.

2 - We are about 1/2 way through the stock, burned the best first, and are INCREASING our demand (with one 'doubling' left; if growing at 3%, that gives 24 years to depletion).

3 - We will end up on renewables, ex fossil energy).

4 - Renewables aren't as useful as FF - and mostly only do electricity, which doesn't store as compactly (the chemistry of electron-swapping suggests this will not improve).

5 - The material demand to replace FF with renewables at same scale, is probably unassuageable. And we would have to be crash-coursing the programme, now.

6 - There are implications for the constructs we built on FF - particularly the one requiring growth to be perpetuated (fiat finance).

Sheesh it's sad to see such shallow comments.

by Colonial Viper | 4th Jul 24, 11:33am 1720049639

Just thought I'd mention that we were talking about advanced nuclear technology producing electricity, not fossil fuels. (Although fossil fuels are currently required in the construction and maintenance of nuclear).

by solardb | 4th Jul 24, 1:06pm 1720055184

I think you'd have to look to the likes of Saudi Arabia. with unlimited money , and no public opposition , ( i'd imagine any protester would be heading for the chopping block ), they put in massive solar , not nuclear. At 0.5 cents kw/h.

by The Person | 4th Jul 24, 3:21pm 1720063280

However, new gas peaker plants will be needed to ensure there is enough capacity to handle peak demand.

Someone needs to tell MBIE, that despite decades of prospecting, no new gas fields have been found and we have less than 8 years supply of gas left.

by solardb | 4th Jul 24, 5:03pm 1720069419

I think they mean gas peaker plants, rather than gas baseload plants we have now. So overall gas use is lower.

by The Person | 5th Jul 24, 9:00am 1720126838

When there is no gas, neither peaker or baseload gas plants will be running.