Postscript: Energy in New Zealand - A Possible Future
The future shape of New Zealand's energy system will be influenced by key energy choices yet to be made, many of which have been discussed in this document. It will also be influenced by innovations and technology changes we cannot predict. This is a speculative "snapshot" of what the future could hold in about 2020…
- Continued reliance on oil as New Zealand's dominant energy source, mainly for transport, but - in response to higher and more volatile petrol prices, road tolls, congestion pricing and emission controls - much greater use of small, hybrid and other fuel-efficient vehicles; increased use of public transport and other alternatives to solo driving, such as ridesharing, walking, cycling and telecommuting.
- Increased use of domestically produced biofuels, blended with petrol and diesel, in response to concern about climate change, volatile international oil prices and continuing uncertainty about oil security; higher government and private investment in development of biofuel sources including crops and waste conversion.
- Development of some new medium-sized natural gas discoveries and investment in new pipelines to connect them to the existing distribution network.
- Increased overall use of electricity, with households still predominantly reliant on supply through the national grid but increased commercial and industrial use of on-site generation, particularly co-generation supplying both power and heat.
- Much more use of renewable energy for electricity generation, particularly from wind, geothermal, small or micro-hydro, biomass and waste; some new high-efficiency natural gas-fired generation; some new coal-fired industrial co-generation; continuing use of coal in the refurbished Huntly plant for reserve energy and back-up to hydro in dry periods.
- A continued critical role for the national grid and local line networks in distributing power from large power stations, but some reconfiguration of both the grid and line networks to enable them to handle intermittent flows of power from new distributed generation, including industrial co-generators selling surplus power at peak times or when their production needs are reduced.
- Much more active use by electricity retailers of demand management and load shifting arrangements with commercial and industrial customers, to increase off-peak demand, backed up by sharper differences in peak and off-peak pricing for all customers; active trading in an electricity futures market.
- Increased commercial and industrial use of energy management systems in buildings and industrial processes, making use of smart metering, and a more active and sought-after energy service industry providing advice on such systems and other energy efficiency and conservation opportunities.
- In homes, much improved insulation and energy-efficient heating and cooling systems, such as heat pumps and low-emission woodburners; more attention in new house design to thermal efficiency; significantly increased use of solar water heating, particularly in new houses and high sunshine regions; greater use of smart metering in households, to take advantage of sharper differences in peak and off-peak electricity prices; and better thermal storage technologies for water and space heating.
- More consumer demand for low carbon products and services, including energy, driven by more widespread awareness and concern about climate change and stronger regulatory pressures to reduce greenhouse gas emissions.
- More public and private investment in energy-related research and development, including product and system trials, particularly in niche areas reflecting New Zealand capabilities and opportunities, such as hydro generation efficiency and micro-hydro generation, geothermal energy, co-generation using wood waste, wind generation in gusty conditions, IT-based energy management and energy-efficient building materials.
- More collaboration in the energy sector, through a range of partnerships between central government, local government, business, industry organisations and non-governmental organisations, including new organisational structures and forums for information sharing, industry and regional development and strategic planning.
- Growing use of hydrogen fuel cells overseas, and to a limited extent in New Zealand, for static uses such as energy storage to maintain high-quality electricity flows for major information technology systems.
- Active debate over whether New Zealand should be preparing to adopt hydrogen vehicles and carbon dioxide capture and storage from burning coal.
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