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Chapter 5: Energy

At a glance

Energy in New Zealand

Energy is an essential part of everyday life. Fuels and electricity power our transport systems, heat our buildings, and produce the goods and services that underpin New Zealand’s economic and social well-being.

Using energy supplies efficiently saves money and helps New Zealand companies produce their goods and services more competitively.

New Zealand has access to a wide range of energy sources, both renewable (hydro, geothermal, wood, wind, biogas, and solar) and non-renewable (oil, gas, and coal). We have some of the most efficient forms of renewable energy in the world, such as wind and hydro.

While our energy needs are increasing, they are not increasing as fast as our economy is growing. Since 1990, New Zealand’s economic growth has exceeded energy demand, indicating that New Zealand’s economy has reduced, to some degree, its reliance on energy.

Impacts of energy

All forms of energy generation and use have an impact on the environment. For example, our growing consumption of non-renewable energy contributes to increased greenhouse gas and particulate emissions, which have negative impacts on the environment and human health.

Energy supply and consumption

New Zealand’s total primary energy supply is growing to meet increased consumer demand. Between 1995 and 2005, New Zealand’s total primary energy supply increased by 10 per cent, from 675 petajoules to 740 petajoules. In 2005, 72 per cent of this supply comes from fossil-fuel-based oil and natural gas. The remaining 28 per cent is from renewable sources.

As our population grows and our lifestyles change, so do our energy needs. Between 1995 and 2005, total consumer energy demand increased by 21 per cent from 407 petajoules to 494 petajoules. Much of this growth in demand is from transport, which accounted for 43 per cent of New Zealand’s total energy consumption in 2005. To meet this demand, New Zealand has become more reliant on imported oil and oil products.

New Zealand’s use of renewable sources for electricity generation is high by international standards. In 2005, renewable sources accounted for about 66 per cent of New Zealand’s electricity generation, with hydro-electricity providing 56 per cent of New Zealand’s total electricity generation.

Present and future management

In 2007, New Zealand is increasing its focus on renewable energy, energy efficiency and conservation, and security of supply to meet our increasing energy demands.

This focus on efficiency, conservation, and renewable energy will continue as New Zealand responds to the national and international demands for action on climate change.

Domestically, the increasing demand for energy is likely to require the development of new infrastructure for electricity generation (such as power stations and wind turbines) and transmission (transmission lines).

We are also likely to experience changes in the future to the fuels we use in our vehicles, with the uptake of biofuels and an increasing number of hybrid vehicles on our roads.