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Energy

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).

In 2005, 28 per cent of New Zealand’s primary energy supply consisted of renewable sources. Non-renewable sources accounted for the other 72 per cent, made up of 39 per cent oil, 20 per cent gas, and 13 per cent coal.

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 affect the environment and human health.

Energy supply

In 2005, New Zealand’s total primary energy supply was about 740 petajoules (PJ), of which around two-thirds (494 PJ) was used as consumer energy. The remaining one-third was used or lost in transformation and in bringing the energy to consumers.

Between 1995 and 2005, New Zealand’s total primary energy supply increased by 10 per cent, from 675 petajoules to 740 petajoules. In recent years, we have become increasingly reliant on imported oil and oil products to meet growing consumer demand. The share of renewable energy varies from year to year, depending on water inflows to hydro-electricity lakes, and consumer demand for energy.

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.

Energy demand

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.

The greatest growth in energy demand occurred in the commercial sector, which increased by 32 per cent. This was closely followed by the transport sector, which increased by 30 per cent. Figure 2.3 shows consumer energy demand by sector in 2005. Transport was the largest energy-consuming sector, accounting for 43 per cent of New Zealand’s total energy consumption. Industry had the second largest share, at 30 per cent.

Figure 2.3: Consumer energy demand by sector, 2005

 

Notes:

(1) The industrial sector includes primary industry not accounted for in the other sectors: food processing; textiles; wood, pulp, paper, and printing; chemicals; non-metallic minerals; basic metals; mechanical/electrical equipment; and building and construction.

(2) Transport includes land transport (road, off-road, and rail), coastal shipping, and air transport within New Zealand. It also includes transport fuel that could not be accurately allocated to the agricultural, industrial, commercial, or residential sectors.

Source: Ministry of Economic Development, 2006.

Consumer energy demand by sector:

  • 43% domestic transport
  • 30% industrial
  • 10% commercial
  • 13% residential
  • 4% agriculture

Although our energy use is increasing, the growth in energy consumption is not as fast as growth in the economy, as Figure 2.4 shows. From 1990 to 2005, New Zealand’s total consumer energy demand increased by 37 per cent. Over the same period, the size of the New Zealand economy, as measured by gross domestic product (GDP), increased by 56 per cent.

These figures suggest the economy is reducing its reliance on energy, at least to some degree. This is known as ‘decoupling’, meaning that the pressure on the environment has, to a certain extent, been separated from economic growth’. As shown in Figure 2.4, the relationship between energy demand and economic growth has varied during the period.

Figure 2.4: Consumer energy demand compared to gross domestic product (percentage change, 1990–2005)

 

Data source: Adapted from Ministry of Economic Development, 2006; Statistics New Zealand, 2006.

Figure 2.4 shows the relationship between consumer energy demand compared to gross domestic product (percentage change between 1990 and 2005). From 1990 to 2005, New Zealand's total consumer energy demand increased by 37 per cent. Over the same period, gross domestic product increased by 56 per cent. This indicates that the economy is reducing its reliance on energy, at least to some degree.

Local action: waste-to-energy

Awareness is growing in New Zealand of the opportunities to produce energy from waste. Waste-to-energy projects have benefits for the environment, including reduced greenhouse gas emissions and reduced reliance on fossil fuels.

Christchurch City Council has turned waste into a resource by capturing gas from the closed Burwood landfill to heat and power the QEII Park swimming pool complex. This use of landfill gas at QEII Park will replace 1.5 million litres of liquid petroleum gas each year, helping to reduce the Council’s reliance on fossil fuels. The project also has benefits for reducing greenhouse gas emissions, because methane gas is captured instead of being released into the environment.

Through the Government's Projects to Reduce Emissions programme, the Christchurch City Council was allocated 200,000 carbon credits for the project in return for emission reductions between 2008 and 2012.

Methane gas from the former Burwood Landfill heats the Queen Elizabeth II swimming pool complex in Christchurch.

Photo of a swimming pool in the Queen Elizabeth II swmming pool complex.

Source: Courtesy of Christchurch City Council.

Developing renewable energy resources

In 1997, New Zealand had one wind farm – Hau Nui in the Wairarapa region – and one turbine at Brooklyn in Wellington. There are now eight wind farms operating throughout the country, with several more projects at various stages of planning.

Demand for solar energy is small but is increasing, particularly for water heating. Industry sales of solar water heating systems indicate that, as of June 2006, about 35,000 solar water heating systems had been installed in New Zealand homes and commercial buildings. Ten per cent (3,500 ) of these were installed in the year leading up to June 2006.

International energy policies have led to the development of a global market for renewable transport fuels and technologies. This has prompted the introduction of biofuels for commercial use in the New Zealand transport sector. The marine environment also has the potential to contribute to New Zealand’s energy needs in the future – wave and tidal energy can be harnessed to generate renewable electricity.

Using energy efficiently to reduce environmental impacts

Using energy supplies efficiently saves money and helps New Zealand companies become more competitive as they reduce their energy costs. It will also help reduce New Zealand's need for new energy supplies.

The Energy Efficiency and Conservation Act 2000 highlights the benefits of demand management – in other words, the benefits of influencing the quantity and pattern of energy used by the end user. The Act has prompted programmes to improve insulation in older homes and encourage the uptake of efficient home heating and lighting options.

The ENERGY STAR energy efficiency rating programme enables consumers to compare the energy efficiency of household appliances, and there are now also Minimum Energy Performance Standards in place for some household appliances, such as fridges, air conditioners, and electric hot-water cylinders. Other demand management measures include energy efficiency requirements in the Building Code, and voluntary schemes to help businesses, households, and organisations save energy.

Our energy future

Recent changes in international energy supply and higher global energy costs, coupled with concerns about climate change, have resulted in a worldwide drive towards greater energy efficiency and increased use of renewable fuels.

As New Zealand takes action on climate change, the focus on renewable energy, and energy efficiency and conservation is increasing. Safeguarding security of supply will also remain a concern. The challenge for New Zealand is to maintain economic and social well-being, while it reduces the environmental costs of energy use.

Much of New Zealand’s efficiency gains will have to be achieved in the transport sector, given that this is both the single largest user of energy in New Zealand and one of our fastest growing sectors by consumption. Scope for efficiency improvements also exists in the residential sector, and attention has now turned to this through improvements to the Building Code, and through insulation and solar water heating programmes.

Government action on energy

New Zealand Energy Strategy to 2050

The New Zealand Energy Strategy to 2050, Powering our Future: Towards a sustainable low emissions energy system, was released in October 2007. The strategy provides long-term direction for energy policy and promotes the development of an energy system that supports economic growth in an environmentally responsible way.

New Zealand Energy Efficiency and Conservation Strategy

The New Zealand Energy Efficiency and Conservation Strategy, Making it Happen: Action plan to maximise energy efficiency and renewable energy was released in October 2007 to replace the National Energy Efficiency and Conservation Strategy. It will help achieve the objectives of the New Zealand Energy Strategy to 2050. It includes measures to reduce electricity demand; address energy use in transport, buildings, and industry; and promote greater consideration of sustainable energy in the development of land, settlements, and energy production.

Solar Water Heating programme

The Solar Water Heating programme promotes the uptake of solar water heating in homes, which in turn reduces the demand for electricity and gas. In 2006, an investment of $15.5 million was announced for the first three-and-a-half years of a five-year programme to increase the use of solar water heating. The New Zealand Energy Efficiency and Conservation Strategy has set a target of 15,000-20,000 solar water heating units to be installed by 2010.