We’ll surpass government forecast says wind energy association

By Bryan Walker 02/02/2012

A mild protest from the NZ Wind Energy Association arrived in my inbox recently. It was in response to the Ministry of Economic Development’s latest Energy Outlook forecast, published last week. The Energy Outlook estimates that wind farm capacity will increase from the current 622MW, to around 1,410MW and produce close to 10% of the country’s electricity by 2030. An understatement, says Eric Pyle, CEO of the Wind Energy Association, by a large margin. ’…our analysis suggests that wind will be even more important than that, producing 20% of our electricity by then.’

The Energy Outlook forecast has not taken into account the lowering costs of wind power, says Pyle:

’Investigation of wind farms in New Zealand shows that recent installations are already among the lowest cost form of new generation, and international studies reveal that the cost of wind is continuing to fall.’

Nor has it allowed for learning by doing:

’We are also a relatively young industry and increasing our understanding of how to make the most of our abundant wind resource. We are developing better wind farms that can generate even cheaper renewable electricity.’

Politely he suggests that facing backwards is not the best way of looking forward:

’Using historical figures for wind farm costs does not reflect the reality of recent downwards trends, including operating and maintenance costs. Wind turbines are now very reliable, something that has improved over the last ten years.’

Perhaps the Ministry will do better next time:

’We look forward to future versions of the Energy Outlook presenting wind in an even more favourable light as officials incorporate more up to date views on the true costs of wind generation.’

Curious, I looked up the Energy Outlook document.  It’s a depressing read for anyone concerned about climate change. By 2030 New Zealand’s energy sector greenhouse gas emissions are projected to be 40-50% higher than in 1990, in spite of a substantial decrease in energy intensity. (Energy is responsible for 44% of the country’s total emissions.) There are detailed indications as to why this is the expected outcome, but it’s the overall tone of the document which disheartens most. There’s a kind of enervating complacency, I guess reflecting the fact that the government has shown little sense of urgency about the need to move away from fossil fuels.  One can’t blame the authors of the document for this. They are presumably working with the guidelines of the government’s Energy Strategy which I’ve already commented on adversely for its determination to exploit all the fossil fuels that can be found.  They obviously find it difficult to envisage any major change in direction. Coal-fired power stations they see as likely to be edged out by the Emissions Trading Scheme, but otherwise there doesn’t seem to be much that is different in the mix. There’ll likely be more gas:

High oil prices improve the economics of oil and gas field development and this leads to increased gas supply in the 2020s.

There are some anticipated moves in more hopeful directions:

Investment in new generation is dominated by geothermal and wind.

But don’t get carried away by that prospect:

The Reference Scenario also sees a net 390 MW increase in gas baseload capacity by 2030. A large plant is built in Auckland in 2026 and all existing gas stations are refurbished and remain in operation.

Transport will continue to be powered as it is today. There is no vision of, say, rapid growth in electrically-powered vehicles supplied by wind generation and maybe integrated into the grid for storage purposes. Indeed there’s no vision of anything much other than what we have now:

Transport remains reliant on oil. Electric vehicles and biofuels remain minor players, contributing less than 2% of total transport energy demand in 2030.

The Ministry of Economic Development is clearly not going to be pushing for a greening of the economy. In fact, if the Wind Energy Association CEO is right, they’re going to lag, not lead any movement towards clean energy. A document like Energy Outlook ought to be marked by the expectation of a steady progress towards a decarbonised energy economy over the next twenty years, not envisaging a large increase in emissions by comparison with 1990. The fact that it carries no such expectation is a reflection of government inaction and lack of vision. It may yet be industry which leads the way. We certainly must hope that someone will. A government which simply plays catch-up, and struggles even to do that, is far from the vanguard. That’s a shame both for the climate and for the future economy.