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Energy

• Energy supply
• Energy demand
  • Total consumer demand
  • Compared to GDP

Consumer energy demand compared to GDP

This indicator measures the energy intensity of the economy. It does this by comparing economic growth as measured by gross domestic product (GDP) with consumer energy demand. It is represented as the amount of energy required (in gigajoules (GJ)) to contribute $1000 towards New Zealand’s economy. This is represented as GJ/$000.

While energy is integral to New Zealand’s economy, the environmental impacts associated with its production and use means long-term sustainability will depend, in part, on becoming more efficient in the amount of energy we use to add value to the economy.

Current situation

In 2006, New Zealand’s economy used 4 gigajoules of energy for every $1000 of value it created (4 GJ/$000).

As a whole, in 2006, the goods-producing sector was the most energy intensive sector in the New Zealand, using 4.7 GJ/$000. This is followed by the primary sector, which used 4.5 GJ/$000, and finally the service sector, which used 2.3 GJ/1000.

Among New Zealand’s industries, in 2006, fishing was the most energy intensive in New Zealand, using 32.7 GJ/$000. Transport and storage followed as the second most energy intensive industry, using 21.5 GJ/$000. This is because both require large quantities of liquid fuels to operate vessels and vehicles. Non-metallic mineral production and petroleum, chemical, plastic and rubber product manufacturing are also relatively energy intensive, requiring large amounts of energy to operate heavy machinery and run heat-intensive processes.

Long-term trend

Between 1990 and 2007, New Zealand’s total consumer energy demand increased by 39 per cent. Over the same period, New Zealand’s gross domestic product increased by 63 per cent. The difference between these two rates of growth represents the economy’s reduced energy intensity – almost 15 per cent. As shown in the figure below, while the relationship between energy demand and economic growth has varied during this period, in the long term there exists a trend of ‘relative decoupling’.

Consumer energy demand compared to GDP in New Zealand, 1990–2007 (percentage change since 1990)

Read table of data of this graph

Recent trend

Between 2004 and 2006, New Zealand’s economy reduced the amount of energy required to add $1000 of value to GDP by 4.8 per cent.

The most significant reductions in energy intensity were found in the service industries, which in 2006 required 4.6 per cent less energy to add $1000 of value to the GDP than they did in 2004. Goods-producing industries also showed improved energy use, with a 3.7 per cent reduction in energy intensity over the same time period. Following a fall in energy intensity in 2004, by 2006 primary industries had increased their energy intensity by 3.8 per cent.

The graph below shows the amount of energy the service, primary and goods-producing industries used to add $1000 of value to New Zealand's economy between 1997 and 2006. It highlights not only the changes in energy intensity of each individual sector, but also relative changes in energy intensity between the sectors.

Read table of data of this graph

The energy intensity of the economy as a whole is not only affected by technical improvements in energy efficiency, but also by the relative composition of the sectors within it. The service sector is the largest and fastest growing sector of New Zealand’s economy. It also happens to be the least energy intensive. As this sector grows, its low energy intensity will have an increasingly large impact on the energy intensity of the economy as a whole. Thus, decreased energy intensity at the economy-wide level is not necessarily the result of the decreased energy intensity of any given sector, but could be attributed to sector shifts in the economy’s composition, and it is important to recognise the impact of both.

The figure below shows the change in GDP by sector, since 1997. While all sectors grew, they did so at different rates. It is these different rates of growth between the individual sectors that lead to changes in composition of the economy as a whole.

Read table of data of this graph

International comparison

According to the most recent data, New Zealand ranks poorly among the Organisation for Economic Co-operation and Development (OECD) countries, with a more energy intensive economy than 20 of our peers. The figure below shows the changes in the energy intensity of New Zealand's economy between 1994 and 2006, as well as the OECD and world averages. While New Zealand’s economy is depending less on energy to add value to GDP over time, it remains more energy intensive than both the OECD and world averages.

Read table of data of this graph

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Last updated: 24 July 2009