The March edition of the excellent New Zealand Energy Quarterly is out. Here are the top 3 findings from my perspective.
1: NZ electricity was 79% from renewable sources last quarter. While this share will drop as winter kicks in and the more expensive forms of power increase in use to deliver the demand, it’s a superb result from the industry. It’s the highest since 1996 and the seventh quarter over 70%.
2: Coal is dying out in NZ – largely, I believe, because Huntly can now be gas-fired. We also see enough Wind power to make a difference, and investment in Geothermal plants is paying off.
3: Emissions from electricity generation have plummeted as coal is replaced by everything else. While Geothermal does emit, it is very small versus the other emitting sources.
Huntly units 1-4 have always been able to run on gas. The NZEQ twice refers to a “preference” to run Huntly on gas rather than coal. My understanding is that because Genesis has ‘take or pay’ contracts for all the Kupe gas, they have little choice but to use it at Huntly.
Lance, I don’t want to rain on your parade, but it is too early to start celebrating the demise of coal just yet. While it is true more renewable generation is being brought on stream, this is relatively incremental. The reality is that the reduction in coal production is caused by an act of god. More rain; you will see that hydro generation is up significantly on the same quarter last year.
@Kaukapakapa: you are correct, Huntly U1-4 have always been dual fuel capable, and spent many of their working years running on gas. However, since to introduction of Huntly U5 (the more efficient combined cycle plant) most of the contracted Genesis gas is used in this plant.
The reality is that coal is the “swing” fuel in the NZ market and it’s use will be influenced largely by weather (rain and wind) and overall demand for electricity.
There is still much work to be done to secure a renewable energy future for NZ.
The excerpt below is taken from the transcript of Genesis Energy’s Financial Review hearing in March of this year. In response to David Parker’s query about the dramatic decrease in the use of coal at Huntly, Genesis’s CEO admitted the company didn’t really have much of a choice:
“Look, in all honesty, I have to be quite honest with you that it was really
driven by a balancing on our gas available. Like other thermal generators we
have relative inflexibility in our gas supply agreements. What we use Huntly
1 to 4 is that if we can’t burn all of the gas in unit 5, which is the most
efficient use of the gas, and we can’t offload it through our retail or
wholesale sales, then the logical way to do it is it’s cheaper to actually run it
in Huntly 1 to 4 than it is to leave it in the ground and pay for it.”
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