A recent report from the Ministry of Business, Innovation and Employment explored the changing demand for electricity and found that more wind and solar power will be the cheapest way to meet that demand.
As more New Zealanders adopt electric vehicles, electric heating, and other electric replacements for fossil fuels, demand for electricity will increase. Commerce and industry will also contribute to growing demand, as will new data centres built in New Zealand by major computing companies.
The Ministry stated that this new demand will probably be met by building more wind and solar power as well as some new hydro and geothermal plants. As a result, it expects that by 2035, 92 percent of New Zealand’s electricity generation would be from renewable sources, that is, hydro, wind, solar and geothermal. Then by 2050, that could increase to 96 percent or even 98 percent. Currently, just over 80% of electricity generated here comes from renewable sources.
However, the report stated that gas will still be used in the future, particularly when supply of electricity is lower than needed. It is therefore likely that more gas power plants will also be built. Another factor that may affect the level of renewable generation is the use of coal at the Huntly Power Station. Genesis Energy, the company that runs this station, have said they expect to reduce the amount of coal they use, but it depends on demand.
This report, called the Electricity Demand and Generation Scenarios, will be used by the Commerce Commission when it decides whether to approve Transpower’s plans for major investments in the electricity transmission grid. The previous report was from 2019.
Listen to Possible Power Shortages for more information about electricity in New Zealand.
Vocabulary
solar – relating to the sun
fossil fuels – fuels such as coal or oil
commerce – buying and selling of goods and services
hydro – relating to water
geothermal – relating to heat coming from inside the Earth
electricity or power generation – the process of producing electricity