03 May 2022
Transpower has released its six-monthly monitoring report on the transformation of Aotearoa New Zealand’s energy system towards a net zero carbon future. It shows New Zealand is headed on the right path to enter a new period of electrification growth, encouraged by record levels of enquiries for renewable energy projects, and government policies and incentives boosting process heat and transport electrification.
Transpower Acting General Manager Strategy & Customer Nicolas Vessiot says that, since the last report, there has been an increase in the number of enquiries from potential grid scale generators and load developers about connecting to the grid, showing an anticipation of growing electrification demand.
“We’re beginning to see our pipeline of enquiries turn into committed projects both on the supply and the demand side and expect this trend to continue as investors and developers continue to invest in decarbonisation.
“We have had 75 enquiries for new grid connections in this financial year and expect these to more than double on the previous year. Of these, there has been a growing number of enquiries from potential developers of new renewable energy generation. Of the 75 so far, most are for either wind (24%) or solar utility scale PV generation (65%). While not all will eventuate in built projects, the volume is a good indicator of developer appetite, and will bring confidence for electricity users that demand for renewable energy can be met,” Mr Vessiot said.
Since 2021 there have also been further developments in the decarbonisation of process heat and transportation. Process heat contributes 10% of New Zealand’s gross emissions and 17% of those covered under the domestic net zero target.
“We are seeing momentum in decarbonisation through the support of government policy and investment. The GIDI fund partnership between Government and business is accelerating emission reductions from industrial process heat by supporting energy efficiency and fuel switching projects.”
The report notes that electrification of the light vehicle passenger fleet is New Zealand’s single largest decarbonisation opportunity, with cars and two-wheelers combined contributing to 58% of transport emissions. While EV growth had previously remained steady, transport policy and funding changes have boosted EV uptake threefold from July 2021. It is hoped that this trend will continue following recent policy changes under the Clean Vehicles Act, as well as lower running costs.
While this future looks bright, it is not without challenge. The upcoming release of the Emissions Reduction Plan, the uncertainty around Tiwai Point and the ongoing effects of COVID-19 are three factors that could materially shift the future of energy in New Zealand. Despite positive growth indicators, Mr Vessiot highlights the ongoing need for scale and speed in the move to decarbonise and emphasises that policy and strategy will need to keep pace to support system expansion and more customer connections.
This report is part of Transpower’s Whakamana i Te Mauri Hiko programme of work, building on the 2020 industry analysis that proposed four potential scenarios to help envision and plan for Aotearoa New Zealand’s energy future. Each six-monthly report tracks the signs and drivers that underpin these scenarios.
This report suggests New Zealand is on track to meet Transpower’s base-case scenario of ‘Accelerated Electrification’, a realistic yet aspirational future that anticipates large-scale transformation of energy in New Zealand.
Report highlights include:
• Record interest in renewable electricity projects –continued increase in the number of enquiries to Transpower for new grid connected demand and renewable electricity generation. There are over 75 enquiries for this financial year; most are for either wind (24%) or solar utility scale PV generation (65%).
• Pipeline of new generation capacity ready to be commissioned – there is currently about 20 GW of generation capacity in the pipeline and around 2 GW of mature utility scale solar interest in the connections process. By comparison New Zealand’s current installed total generation capacity in 2021 is approximately 9.6 GW.
• Process heat decarbonisation – building momentum through support of the Government Investment in Decarbonising Industry (GIDI) fund. The fund is delivering emissions reductions at a remarkably cost effective ~$12–18 to Government per tonne of CO2 reduced. Biomass and electrification have been the main technologies. Collectively, projects underway from the first two rounds of the fund are expected to deliver lifetime emissions cuts of 6.6 million tonnes of CO2-e.
• Transport electrification – light passenger electric vehicle numbers have been boosted by recent transport policy and funding with a 2–3x fold increase in uptake. This trend is expected to continue rising – as low emission vehicles are becoming more attractive due to new clean vehicle policies and lower running costs. We are also seeing increased effort by Government to invest in public fast charging infrastructure through the Low Emission Transport Fund to help meet the needs of a growing electric fleet and announcements of private sector investment by new entrants.
• Battery technology and flexible demand – providing solutions to meet peak and energy demand and support system reliability, reinforcing an emerging appetite for non-wire alternatives.
• Distributed solar installations – these continue to grow in number and capacity. A record 30 MW of residential solar was installed in 2021.
For all our reports in the Te Mauri Hiko series.
For more information please contact:
Senior Communications Advisor Laura Ackland on 021 394 042.