Last week the company that uses the most gas in New Zealand, Methanex, announced that it is shutting its plant until the end of October. As a result, it can sell the gas to two power companies, Contact Energy and Genesis Energy. This is good news, as there were concerns about lack of gas for the rest of winter and spring, which could have led to electricity shortages.
New Zealand relies a lot on renewable electricity production, from hydropower, geothermal power and increasingly from wind and solar energy. However, sometimes there is not enough electricity from these sources. For example, at the moment the hydro lake levels are low, at just 46 percent of the average for this time of year, because of a lack of rain. Consequently, at these times, gas and coal need to be used to generate electricity. Genesis Energy uses gas and coal at the Huntly power station, in the Waikato region, and Contact Energy has a gas-fired station at Stratford, in Taranaki.
The agreement between Methanex and these two power companies means that there is enough gas to run the Huntly power station at full capacity until spring as well as the station at Stratford. However, this is only a temporary solution, as Methanex wants to re-open their plant in a few months.
There is a problem with gas supplies in New Zealand. Not as much extra gas has been discovered in recent years, so perhaps there is less gas than was previously thought. Perhaps the country is running out of gas. If that happens, the companies may need to use more coal when there is not enough generation from wind, hydro and solar sources. But both gas and coal contribute to carbon emissions, so that is not good for New Zealand’s target of reducing emissions.
The previous government banned new oil and gas exploration, but the current government wants to reverse that ban. However, it is not clear if any companies would invest in new gas fields, and even if they did, it could take ten years or more to get a reliable supply from those new fields. But it also takes time to build wind and solar farms, and there will still be times when there is not enough wind or sun. Research into how to store wind and solar energy is needed, and perhaps all forms of electricity generation are needed to cope with increased demand from a growing population.
There is no easy solution for this complex problem.
Listen to Possible power shortages from May to hear about other problems in this sector.
Vocabulary
announce – to officially tell people something, especially a plan or decision
shortage – when there is not enough of something
renewable energy – energy that is replaced easily (notice the prefix re- = again, and the suffix -able)
hydro – relating to water
geothermal – relating to heat coming from inside the Earth
solar – relating to the sun
generate – to produce
carbon emissions – the release of carbon dioxide (CO2) into the atmosphere
ban – to say that something must not be done
cope with – to succeed in dealing with a difficult problem or situation