Decription:

Depletion of the Maui gas field has quickly imposed a new framework for New Zealand’s energy future, beginning with the immediate concerns of electricity supply but in the medium term moving to the much more fundamental concern of securing adequate primary energy sources to meet ongoing demands for essential energy services.

Maui gas meets almost 25% of our total primary energy supply. Other primary energy sources include geothermal, coal, other natural gas supplies, oil, hydro and other renewable sources. Yet despite plentiful primary energy sources, New Zealand remains vulnerable to the risks of shortages of consumer energy including electricity and transport fuels. It also risks increased dependency on imported fuels with the consequent higher costs to consumers.

The dry year electricity crisis at the beginning of 2003 was a potent reminder of the reality of life in a nation with an energy shortfall. But this crisis was fundamentally different from other post 1990 supply shortages because it was policy based. It largely reflected the lack of a coherent policy framework for future planning and investment in the development of new primary energy resources for this country.

Recent history shows that New Zealand is increasingly vulnerable to delays in commissioning new electricity generation plant, and increasingly reliant on imported sources of primary energy. It is not as if the depletion of the Maui gas field was not well known and oft predicted, or that dry years are not expected. But even with this knowledge, New Zealand has failed to ensure the levels of investment required to manage the risks of electricity supply shortfall.

Our thinking must go far beyond just the issues surrounding electricity supply and demand; we must focus on primary energy sources. The transition from dependence on Maui gas to other alternative primary energy supplies needs to be managed assertively if we are to avoid energy shortages which would potentially cripple New Zealand.

Levels of exploration have not been adequate to secure gas reserves. Public policy initiatives to avoid wasteful use of energy have languished. And despite government policy objectives for sustainable economic growth, the market share of consumer energy provided by renewables has reduced. The delivery of energy services requires decades of large capital investment, and this has just not been undertaken.

But the Centre for Advanced Engineering does not just want to point to the problems. This document has been produced to stimulate robust public debate on the choices available to New Zealand, and so help plot a more sustainable energy policy for the future.

The information contained in it is based upon the extensive work undertaken by CAE over many years. It draws on its various studies and reports covering energy supply and demand, risks and vulnerabilities, energy efficiency, distributed generation and renewable energy options for New Zealand. In doing this the authors paint a coherent picture of the current New Zealand primary energy supply situation and the likely influences that will determine outcomes over the near term.

We have drawn upon public information to outline the issues and to inform New Zealander’s of their future choices. The private and public sector must work together to actively pursue all the options and ensure the necessary investment to secure our energy future is made. There is no silver bullet available to New Zealand.