Leyland�MSc, FIEE, FIMechE, FIPENZ, MRSNZ
a consulting engineer specializing in electricity generation and
transmission. He is part owner and operator of a small hydro
His interest in
man-made global warming arises from the huge impact it would
have on power supply in New Zealand. He is Chairman of the
economics panel of the New Zealand Climate Science Coalition.
Contact us if
you would like to submit an opinion piece. We are seeking
commentators on a range of topics, including: RMA, crime and
justice, environmental issues, Maori issues, a NZ constitution
and governance. Contact
Skip to make comment
Send to a friend
8 December 07
Zealand Energy "Strategy"
I have been
involved in the electricity and energy business in New Zealand
for the last fifty years. From 1992 to 2003, I produced the
only independent review of electricity generation and demand
in New Zealand.
In all that
time, I have never seen anything that is potentially so
disastrous for electricity supply and for the economy as the
New Zealand Energy Strategy and the Emissions Trading Scheme.
Its central focus is climate change and political
expediency not strategy and energy.
It also demonstrates that electricity supply is now or
more firmly under government control than it was in the
"bad old days"
when the Power Planning Committee issued reports that
anyone could understand and which clearly set out the options
and the arguments for and against them.
strategy must first establish the objective. For the energy
sector it is, surely, the provision of a reliable and economic
supply of electricity and other forms of energy for New
Zealand. The next step is to establish what the demand will be
and, having done that, evaluate all the resources available to
us to meet that demand. Then
it needs to match the resources and the demand to give the
lowest possible cost of energy with reasonable security.
Having done that, we have a firmly established and rational
"base case". The next step is to consider
alternatives to the base case. These can include variations in
demand, and the cost and availability of, for instance
indigenous oil and gas. Other options such as a belief that
minimizing the emissions of greenhouse gases is important can
also be factored in.
strategy would give us a comprehensive review of the options
and their uncertainties and their costs and benefits. On the
basis of this, a long-term strategy for pursuing what is
determined to be the most attractive option can be developed.
If circumstances change, then it is easy to repeat the
whole exercise by changing the base case or the options as
But what we
actually got is a political document that reflects, more than
anything else, the government's obsession with the idea that
man-made carbon dioxide causes dangerous global warming.
It also seems that the government believes that if New
Zealand reduces its emissions, it will have an effect on the
climate. Yet there are scientific studies which show that even
if Kyoto were adopted 100%, the world would be 0.07 degrees
cooler in 2050 than it otherwise would be.
It is worth noting that much of the hoped for carbon
reduction will be achieved by shifting efficient New Zealand
production overseas. If
this happens, more, not less, carbon dioxide will be emitted
On the 5th
Dec the government announced a moratorium on thermal power
stations running on "base load".
This was done, it seems, to stop generators building
more base load gas turbine stations if, as it likely, we find
more gas. Instead
of "the market will provide" we get "the market
shall not be allowed to provide".
So much for an electricity market and an industry free
from political interference.
incontrovertible that the world has cooled since 1998. 2007
will be cooler than 2005 and 2006 in spite of the fact that,
since 1998, carbon dioxide levels in the atmosphere increased
by 4%. The
climate models said it would get warmer. It didn't.
And yet the Energy Strategy relies on the same shonky
significant feature of the "Energy Strategy" is the
belief that our electricity supply can be 90% renewable by
this end the government has told the state-owned generators
that they cannot build new thermal generation for the next 10
years (except for "security").
The Strategy says virtually nothing about coal fired
generation, claims that nuclear power is not for New Zealand -
without any justification for the statement - and largely
ignores the potential for continued development of large hydro
the fact that at least 3000 MW of our existing coal and gas
fired power stations will have died of old age before 2030 and
will need to be replaced. Instead, it seems to believe that
some geothermal development and a huge amount of wind power
will give a reliable and economic supply. It won't.
to the government's own Electricity Commission, wind power is
very expensive - more than 11 cents per kWh
- and it will need another 2c/kWh or more to provide
the transmission and backup or when the wind it isn't blowing.
(Over the past year, the average spot price has been in the
region of 6 c/kWh.) Coal, nuclear, and large hydro power would
provide electricity for about 8c/kWh and would not require
near as much transmission or as much backup. So there is one
thing we can be sure of: compared with the alternatives, the
energy strategy will give us a very expensive supply of
electricity. But no-one reading the Strategy would dream that
this is the case.
rage about whether or not wind power needs a large amount of
backup capacity. It does. In June and July this year, when the
system demand was at its maximum, the wind farms in operation
in the North Island produced virtually no electricity for 25%
of the time and not much for another 12%. For 37% of the time,
the output of the wind farms was less than 17% of the
installed capacity. The backup that was needed was provided by
hydro power. Fortunately, it was quite a wet year and the new
CCGT station at Huntly ran reliably. People who understand the
system believe that, at most, our 5300 MW of hydropower could
support and backup 1500 MW of wind. But the government wants
three times this amount. Where will the backup come from? The
Strategy is silent on this.
wind power developments proposed for the South Island will
produce large amounts of electricity when the wind is blowing
hard. Much of it can only be used in the North Island. To get
it to the North Island, new 220 kV lines will be needed in the
South and it will be necessary to spend more than $600 million
increasing the capacity of the direct current link. But that
only gets it to Wellington. To get it to Auckland, new lines
will be needed between Wellington and the centre of the North
Island. The costs of this extra transmission could easily add
50% to the cost of wind power in the South Island. One thing
we can be sure of: one way or another, the consumer will pay
for all this.
strategy is implemented, it is inevitable that, sooner or
later there will be a need for rotating blackouts when the
demand is high and the wind is not blowing. The public
reaction to this will be so strong that, whichever government
is it power, it will have to take desperate measures. The only
option it will have is to purchase open cycle gas turbines
which are inefficient and extremely expensive to run. So the
cost of electricity will increase even more and these
inefficient gas turbines will spew lots of carbon dioxide.
instead, we built a nuclear power station North of Auckland,
we would save billions of dollars on power transmission and we
would have a secure and reliable supply at a predictable
price. And for those who believe in global warming, there
would be a massive reduction in emissions of carbon dioxide.
Many countries that believe that CO2 causes dangerous man-made
global warming are actively considering - or actively
developing - nuclear power. But our Prime Minister has decided
that we are not even allowed to talk about it!
When he was
in charge of the Ministry for the Environment, Barry Carbon
told me that "Kyoto is all about politics, not
the same thing can be said about our energy strategy.
would like to comment on this issue please click
Skip to top