Speaking at the New Zealand Wind Energy Association Conference earlier this month, the country’s National Energy and Resource Minister Phil Heatley had a clear message: wind generation is an important part of New Zealand’s future.
Heatley, a mechanical engineer by profession, says that New Zealand is fortunate in that it has a wide range of energy resources including minerals, oil and gas, wind, hydro and geothermal in various stages of development, and that developing and utilising these resources is a key priority for the government.
Consistent with expectations in many other countries, Heatley believes growth across the broader renewable energy sector, in New Zealand will stem from a continued drive toward reducing greenhouse gas emissions. Whilst the country already generated 77% of its energy through renewables last year, Heatley says that the government wants to increase this to 90% by 2025 as well as to reduce the country’s overall emissions to half 1990 levels by 2050. In addition, Heatley says a further boost to renewables should come through the country’s emissions trading scheme, which is helping to make less carbon intensive energy sources more price competitive.
Aside from that, Heatley believes further demand for wind and other energy sources in New Zealand will spring from a requirement to replace the country’s aging fleet of thermal generators. And that’s not to mention normal growth from what he expects will be ‘incremental’ increases in national energy consumption.
Indeed, Heatley says, given the current suite of consented renewables projects underway, which totalled over 3,000MW of future generating capacity at last count (two-thirds of which are wind projects), the future looks ‘very bright’ not only for the renewables sector as a whole but also for wind in particular.
Still, Heatley cautions that the sector is not without its challenges going forward.
For one thing, he says, the precise make-up of New Zealand’s future energy supply remains far from certain, and a number of factors could shift it away from, as well as toward, specific technologies.
Further uncertainties, too, such as exchange rates and steel prices, could impact the cost of building new renewable energy projects.
Then, there are challenges specific to wind, such as the variability of supply. Heatley says it must be recognised geothermal power, not wind, provides the country’s primary source of energy flexibility, with additional flexibility coming from hydro generation.
With this in mind, Heatley says the future of wind energy in New Zealand depends largely upon how well the industry works to improve wind forecasting, improve control of output (for example, by limiting how fast wind generation output can increase when the wind picks up) and integrate wind into the broader power system.
Potential for Spin-off industries
Despite these challenges, Heatley says the New Zealand wind industry is a ‘good news’ story, and will most likely remain that way in the future.
He says New Zealand is one of the few countries, if not the only country, where wind projects are developed without subsidy. He also notes that whilst ‘consents’ for new projects were once seen as difficult to obtain, and also despite wind projects being subject to intense scrutiny, very few projects are now denied consent because of the expertise the industry has built up in design and construction of wind generating facilities.
Indeed, Heatley sees opportunities to apply some of this expertise, along with the positive reputation the New Zealand industry has built internationally, to new markets and opportunities. Already, he says that some New Zealand wind generation companies are successfully offering their expertise in terms of approval, construction and operation of wind turbine stations to overseas clients. Another possibility is turbine manufacturing, whereby Heatley notes that one manufacturing facility has been developed in New Zealand, with the company behind the facility having already formed an important overseas partnership. These types of areas, Heatley says, could provide extra sources of growth for the industry.
New Zealand’s wind generation industry has a number of challenges ahead.
But Heatley’s message is clear: it has a lot of potential and opportunities as well.