Genesis welcomes Government’s dry year risk review,
but urges caution on what the best outcome could be for New
Zealand’s low carbon future
Genesis welcomes the
Government’s proposal to look at solutions to alleviate
New Zealand’s seasonal electricity generation shortfall,
especially during dry years.
“Any solutions for New
Zealand’s dry year risk that can provide deep energy
storage at affordable prices are welcomed. This would help
New Zealand reach its wider emissions targets and reduce the
pressure on Huntly Power Station to provide backup support
to all market participants,” said Marc England, Genesis
CEO.
Existing hydro lakes currently provide about
4,000 GWh of storage, leaving a 3,000 GWh gap during a dry
winter. For scale, 3,000 GWh is about five times what Lake
Taupo currently stores for generation, or 140 home batteries
for every household in New Zealand. That gap is currently
met by the Huntly Power Station.
The Government’s
plan to explore solutions to New Zealand’s dry year risk
aligns to Genesis’ own thermal generation commitments to
replace baseload thermal generation with new renewables and
to remove the remaining coal from its back-up thermal
generation under normal hydrological conditions by 2025,
with an intent to remove it altogether by 2030. Genesis has
removed 1.8 million tonnes of carbon from its generation
activities over the last ten years and aims to remove
another 1 million tonnes over the next few years. However,
backing up New Zealand’s notoriously weather dependant
renewable electricity system remains a challenge and a whole
energy system perspective should be considered.
“It
is good to see the Government taking a long-term strategic
approach to this complex challenge. However, Genesis urges
caution that aggressively pursuing a 100% renewable
electricity may be very expensive for consumers. As
electricity generation contributes only 4.2% of New
Zealand’s emissions, a bigger decarbonising prize would be
the electrification of transport (21%) and industrial heat
(8%) first. We have long maintained that the key to
widespread electrification of these sectors lies in ensuring
that electricity remains affordable, reliable and flexible
enough to adapt to tough market
conditions.
“Alongside a review of dry year risk
support, Genesis would like to see a clear policy framework
for new grid connections, focused on removing the first
mover disadvantage that exists for businesses wanting to
connect to the grid to support the electrification of
industrial coal or gas-fired boilers. We would also like to
see more support for EV adoption. The Government has the
opportunity to lead the way through centralised EV
procurement of the Government fleet.
“Any renewable
energy related review should focus on what investments and
subsidies will drive the lowest carbon outcome for New
Zealand’s energy consumption as a whole, not just
electricity.”