Aotearoa has always been at the forefront of renewable energy development. It led the world in harnessing geothermal energy at scale and opened the Southern Hemisphere’s first industrial hydro-electric power plant in 1885, a mere 45 years after European settlement. New Zealand recently became only the second country in the world to use geothermal energy for hydrogen production.

Its strong background in the production of renewable energy has allowed New Zealand to assume the role of a global leader in renewables, generating a record 84% of its electricity demand using renewable sources. However, this is not enough. In an ambitious move prior to the 2020 election, New Zealand’s government pledged to achieve 100% renewable electricity generation by 2030. This follows the passage of New Zealand’s 2019 Zero Carbon Bill, which sets Aotearoa on track to eliminate all carbon emissions by 2050, in line with its commitments under the Paris agreement. Local councils are acting as well, with Auckland, the country’s largest metropolitan area, planning to cut all GHG emissions by 50% by 2030 and 94% by 2050.

To support clean energy initiatives the government has established a 60€ million Green Investment Fund, a 16€ million National Energy Development Centre, and multiple renewable energy investments via the 1,8€ billion Provincial Growth Fund. Interest in New Zealand’s renewable energy sector is high, with a three-year energy dialogue project from Germany starting mid-2021. The German Federal Ministry for Economic Affairs and Energy (BMWi) led project is supporting the uptake and deepening of energy policy dialogue between New Zealand and Germany and helping German SMEs get a foothold in Aotearoa.

Dry Year Risk and the New Zealand Battery Project

Since the beginning of power usage in New Zealand, abundant lakes and rivers have provided the backbone of Aotearoa’s electricity generation. For more than 50 years, hydropower has provided over half of New Zealand’s electricity needs and is more reliable than wind and solar generation. However, a power grid based mostly on hydropower bears one critical flaw: in periods where hydro inflows are lower than usual, less energy can be sourced from water. When a dry year shortage occurs, New Zealand falls back on coal and natural gas generation to still generate sufficient electricity. Solving the dry year problem is key to reduce New Zealand’s dependence on fossil fuels and achieve energy security and 100% renewable electricity generation.

To this end, the NZ Battery Project has received 41,6€ million to investigate, among others, a pumped hydro storage solution to the dry year problem at Lake Onslow. Pumped hydro storage is a regular hydroelectric station which pumps water into a man-made reservoir in times of cheap and plentiful electricity, and provides power during dry year shortages, when other stations do not provide sufficient power. The 2,4€ billion solution, which would be New Zealand’s largest infrastructure project since the 1980s, would potentially enable Aotearoa to survive of 100% renewable electricity year-round.  

While the pumped hydro is the most promising solution being considered, others are also under investigation. Hydrogen, Biomass and overbuilding of renewables, or a combination thereof are all being investigated.

Solar Power

Aotearoa’s solar resources are better than those of Japan or Southern France, regions with significant uptake of solar technologies. Freiburg, Europe’s ‘Solar City’, is one of Germany’s sunniest cities, yet it receives about as much sunlight as Invercargill and is further from the equator than all of New Zealand. Despite of the positive statistics, New Zealand has only seen slow growth over the past five years, with a total installed capacity of 130 MW in 2019. The residential sector has been a key driver for solar uptake, accounting for over 70 percent of installed capacity at the end of 2019. The rate of SMEs, commercial and industrial market segments is growing even faster, although from a lower base.

At a utility scale, a number of solar farm projects are in development across New Zealand. Genesis Energy is planning New Zealand’s biggest solar farm, capable of generating 550 GWh of electricity.