Chief executive of the Electricity Authority (EA) Carl Hansen said New Zealand was well placed for the target of achieving 100% renewable energy generation by 2025 in years when rainfall and inflows into hydro lakes are considered normal.
Writing in EA’s latest newsletter he said that at the end of 2016 New Zealand reached 85% renewable energy generation while other countries including the United Kingdom, Australia and the United States had by that time failed to pass the 25% renewables mark.
The EA outlined the current state of play in the March document “Adjusting to New Zealand’s electricity future” which pointed out it was important increased renewable generation supported good outcomes for consumers.
“The electricity system has been able to accommodate increased renewable generation largely thanks to its flexibility,” Hansen said.
“Most renewable generation is intermittent by nature, meaning there needs to be careful consideration of how to ensure the supply of electricity to end consumers remains secure.”
New Zealand has plenty of back-up options for when weather conditions prevent renewable sources from fully meeting demand, enabling the continued growth of renewable generation.
“Generators are actively responding to customers’ demand for clean, green electricity, and the costs of renewable generation and renewable technologies are increasingly favourable for consumers.”
He said the Emissions Trading Scheme offers further incentive to switch to lower-emission generation, with the expected future costs of emissions an important factor in investment decisions. However, challenges and opportunities remain.
For example, there are potential downstream effects from new technology.
He said technologies giving consumers greater control over their own levels of reliability and security of electricity supply are changing expectations about the overall costs and who should pay.
“It’s also possible that the costs of having reserves of renewable generation, needed only rarely to meet times of increased demand, may be high.”
The EA document concluded that for New Zealand to avoid the use of fossil-fuelled back-up generation while retaining high reliability standards and current cost levels, it will need to rely on innovations in technology and demand management.