1. Subject of This Report
1.1 Background to the Report
The Energy Modelling and Statistics Unit of the Ministry of Economic Development (MED) sought to review the assumptions underlying the Ministry's current estimates on the availability and costs of generating electricity and heat from renewable energy. Renewable energy (biofuel) for transport has been excluded from this review. The review was to be based on existing published documents where appropriate, and where more recent information was readily available, the estimates were to be updated.
The revised estimates focus on the period up to 2012 but also look beyond this to give a view on the position out to 2025.. No account is taken of possible carbon charges or renewable energy credits, so the uptake scenarios represent a "Business as Usual" case.
This study focuses on the renewable resources and technologies that are likely to find reasonably widespread application by 2012, a year significant as a Kyoto Protocol milestone. The criterion given for the review was that technologies should have the potential for generating electricity at a cost less than 15c/kWh (2002 dollars), or for heat at less than $25/GJ.
In particular, the study looks at hydropower, geothermal, wind power, woody biomass, landfill gas and other biomass energy sources, and solar water heating. Photovoltaics have been included for completeness and because it is likely that by 2025 this technology will have become more economically competitive with the previously mentioned renewable technologies, or isolated diesel plant at the retail end of the market.
The study updates data originally presented in the May 1993 Ministry of Commerce report "Renewable Energy Opportunities for New Zealand". This report was subsequently updated by a July 1996 report jointly published by EECA and Centre for Advanced Engineering (CAE) entitled "New and Emerging Renewable Energy Opportunities in New Zealand". Further technology-based reports have been produced in the last two years, including three reports published by EECA focussing on wind, biomass and solar opportunities. Where possible, the updated data has been based on these later reports.
A brief outline of each type of resource and associated technology has been provided in a form similar to the Summary Data Sheets included in the 1993 report. The information in the data sheets has been updated to reflect an assessment of current community, social, and environmental values.
Information has been prepared covering electricity and heating as appropriate. The resource availability takes no account of electricity transmission/distribution constraints, which are assumed to be addressed when required.
Resource availability in 2012 (and beyond) has been outlined, disaggregated costs have been provided, then aggregated costs developed in tight bands to enable ready use in energy modelling. In addition, assessments have specifically been made for the year 2025. Confidence levels have been applied. The resulting supply curves show additional potential over that which is currently used.
1.2 Comment on Estimates
The cost and quantity information in this review is based on a wide range of publicly available sources. In many cases the specific information has had to be generalised in order to produce realistic cost curves relating to the likely availability of each renewable resource.
The reviewers have used a number of published sources of information plus undertaking original analysis where the published information is considered no longer applicable. Consultation with a number of specialists has been undertaken to ensure that unpublished information is incorporated wherever possible.
The report is not just an indexing revision of the unit costs of each technology. Since 1993 there have been some significant changes in the technologies and in a number of cases a paradigm shift in the conceptual thinking about the resource and its utilisation. The report incorporates these significant changes in thinking.
The boundaries of the review have been constrained by the perceived realities of uptake for each of the technologies in the period up to the year 2012 and on to 2025. In the discussion on each technology comments have been included on the constraining factors and issues that will need to be addressed in order to increase uptake. These do not include an exhaustive analysis on each technology. The comments made provide guidance to the priorities for further work.
The extrapolation of specific information to provide generalised cost curves is based on the experience and opinions of the reviewers.
The report addresses the issue of uncertainty by placing the energy quantity estimates into a number of confidence classes or bands.
All costs are in 2002 dollar values. An estimate has been made of real cost changes that may occur over time1 and these cost reductions have been applied when estimating availabilities for 2012 and 2025.
The real changes in capital costs may arise from economies of scale, advantageous exchange rate changes, increased experience and technology changes.
1.3 Confidence Bands
To provide some guidance on the applicability of the resource estimates the following definitions are given.
High Confidence: These resources are well proven resources, assessed as readily able to be permitted and developed. Achievable development rate has been taken into account. They represent an 80-90% confidence that the uptake will occur.
Medium Confidence: These estimates represent an intermediate resource estimate, for the most part a median estimate of uptake. Generally these are associated with a more liberal consenting environment. Achievable development rate has been taken into account.
Low Confidence: These resources can be developed but difficulties are expected in terms of permitting and access. They represent a 10-20% confidence that the uptake will occur.
Where confidence levels are discussed in this report, these levels are cumulative (except where otherwise noted) e.g. the medium confidence resource available will include both the high and medium confidence bands, low confidence resource available will include high, medium and low confidence bands.
Back to Top