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• Renewable Energy: 2005 Edition
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• Generating: Technical Note

• Hydro Developments
• Geothermal Developments
• Wind Developments

The East Harbour renewables report discusses the availability and costs of generation from hydropower, geothermal, wind power, biomass and solar energy. The identified potential biomass and solar energy is not used in the Energy Outlook because it is relatively small and high cost (the Outlook does however include biomass projections derived from estimates of forestry wood waste).

The East Harbour report gives energy supply costs and availabilities for three levels of confidence: high, medium and low. Costs are derived using a weighted average cost of capital (WACC) set at 5% and also at 10%. For the Energy Outlook, figures were taken corresponding to the high confidence estimates at the 10% WACC.

The availability in the East Harbour report is presented as the potential capacity (MW) or potential annual generation (GWh per year) over 2c/kWh cost bands; i.e. 2-4c/kWh, 4-6c/kWh, etc. Point costs representative of each band were taken as the cost inputs for modelling purposes. Only renewable energy available up to and including the 8-10c/kWh band is considered in the Energy Outlook.

There were no adjustments to the renewable energy costs for the exchange rate as the renewables report used the same exchange rate assumptions for 2012 and 2025 as the Energy Outlook.

Hydro Developments

In the East Harbour report the potential identified for hydro developments, at the high confidence level and 10% WACC (page 20) is:

The cost of potential new hydro developments shown in the Energy Outlook (Box 2 on page 8) is:

Project Aqua is the 570MW / 3200GWh project divided into two stages to reflect the expected construction schedule. It is costed at 4.5c/kWh based on public information from Meridian Energy.

The medium and high cost hydro is the remaining 330MW from the East Harbour report. A breakdown of this data showed that 50MW of the 130MW in the 6-8c/kWh band is close in cost to 7c/kWh, with the remaining 80MW closer to 8c/kWh. Combined with the 200MW in the 8-10c/kWh band, this makes a total of 280MW (representing a number of different hydro projects) costing around 8.5c/kWh.

The total GWh for the medium and high cost hydro is less than given in the renewables report because a lower average load has been assumed. There is also a small difference due to rounding.

Geothermal Developments

The East Harbour report gives the following figures for the annual GWh available from geothermal energy, at the high confidence level and 10% WACC (page 24):

As in the case of hydro, these represent a number of different projects. The availability of energy varies with time because it is assumed that staged development will be necessary.

In the Energy Outlook, the GWh figures are converted to MW at an average load of 90%. From inspecting the data, point costs were chosen at 4c/kWh, 6.2c/kWh and 8.5c/kWh based on how the individual project costs are grouped within each cost band.

This results in the following figures presented in the Energy Outlook:

The year ranges show the periods covering from when the resource is first available to when it is most likely to be fully utilised. The 1800GWh in 2011-2020 is obtained from rounding the 1790GWh in the 6-8c/kWh band for 2012. The additional 3000GWh in 2021-2025 is the increase (rounded) in this band from 1790GWh to 4780GWh in 2025. The 475GWh at 8.5c/kWh over the period 2006-2025 is an upward revision of the figures reported by East Harbour in the 8-10c/kWh band.

Wind Developments

The potential availability of wind power reported by East Harbour at the high confidence level and 10% WACC (pages 27 & 28) is:

The costs of these projects are evenly spread within each band and are not clustered around any particular point cost figures. Consequently it was decided to use the same point costs as for geothermal generation at 6.2c/kWh and 8.5c/kWh. This enables the available quantities of wind and geothermal to be compared on a like cost basis. An intermediate point cost at 6.5c/kWh was included to provide a finer breakdown. The reported wind MW and GWh figures were then scaled to fit around these new point costs.

The increasing quantities in the lower price bands reflects the fact that wind is a rapidly maturing technology associated with falling capital costs.

After scaling, the following figures were obtained:

In the Energy Outlook, these are presented as:

The 240MW and 840GWh figures for 2011-2020 at 6.2c/kWh are the respective increases from 2012 to 2025 in the previous table. The MW figure at 6.5c/kWh increased to 250MW from 200MW as a result of applying a lower average load figure (35% instead of 43%).