Climate Change Commission has plenty of new energy developments to consider before completing its final report

Thirteen   wind farms, each the size of the country’s  largest, will need  to be  built in the  next  15 years  to power  the  country’s fleets of  electric vehicles, and boilers. That’s  what the Climate Change Commission has urged in its  recent    report to the  government.

Whether   the  country’s power  companies  will see it  the  same way  as the commission is  far   less certain. Already  Contact, one of the biggest, has stepped  up  to the plate and says  it  will  invest $580m  to build a  new  geothermal  station at Tauhara.

Contact’s  chairman, Rob McDonald,  says:

“We believe the Tauhara geothermal project is NZ’s  best  low-carbon ren ewable electricity opportunity.  It will operate 24/7, is not reliant on the weather  and is ideal for displacing  baseload  fossil fuel generation  from the  national grid which  will significantly reduce  NZ’s carbon emissions”.

Construction is  expected to be  completed  by  mid-2023. Japan’s Sumitomo Corporation  is  leading the build, in partnership   with Naylor Love  and Fuiji Electric.

Meanwhile   Genesis Energy  is  reviewing whether it  should keep its investment in the offshore Kupe  oil and gas field,  or look at “better investment  opportunities”.

It  says the field  has “attractive” cash flow and a  strong  growth outlook, and its operators are looking at further development, including  further  exploration and drilling  another well.

Kupe  provides  around 15% of  the  country’s  natural gas  and half  of  LPG demand.

Last  August  its gas  reserves  were revised  upwards  by  more  than 20%.  Its  importance to  the  country  has  risen  after  Beach  Energy  and NZ  Oil  and  Gas (Genesis’  other  partners  in Kupe)  relinquished  PEP  52717 (Clipper)  which contained  the promising Barque  prospect off  the  Canterbury coast  this  week.

NZ  Oil  and  Gas  said  it  was with “much regret”  they  gave  up the permit  after years of  work to mature  it  and  bring in appropriate partners. CEO Andrew  Jefferies  says  he  expects it  will not be  the  last offshore  acreage  to suffer  the same fate.

He  points to a  confluence of  events including adverse regulatory settings, the  dry  hole in OMV’s Tawhilki permit,the recent announcement

Terminating the  Wherry-1 drilling, and the effects of Covid drill costs having  formed  a perfect storm, making  the task of finding suitable drill partners in the required timeline impossible.

Both  Beach  and  NZOG  reaffirm their commitment  to NZ  with  Kupe   which they say “remains a  key supplier to the  country’s energy needs”.

At Kupe they are halfway through a major compression project  to maintain production, and say  the offshore  permit has both development and near-field  exploration potential.

Their enthusiasm  for  Kupe  suggests   both   could be interested   in  channelling  more of  their capital,  now  they  will be  no longer funnelling   any  towards the  Barque prospect, into Kupe. They might  also  be interested  in snapping  up   Genesis’ stake  if it comes on the market.

However  that  works  out, there  are  other interesting  moves   in the  energy  field  which makes  some of  the  Climate Change Commission’s scenarios  look  out of  date  even  before  they reach the government.

Energy  consultants    report   keen interest by  overseas  interests  in investing   in large-scale  solar  projects  in NZ,  now  that  the price  of  solar  equipment   is falling.   Where big solar  farms   can  be  located  adjacent to large sources  of demand,   the  lower  transmission costs  are  said  to make  the economics  look very attractive.

With  the  government  moving  last week to  stiffen up the Emissions  Trading Scheme, incentives  in the  energy  sector   are  changing  rapidly. Climate Change Minister James Shaw  claims  the government  had to lift the price  to emit  because  the  scheme had  failed to deliver on its primary purpose  of bring down carbon emissions.

The  Climate  Change Commission will have to bring these developments into consideration before its final report  reaches the government  for  action next  December.

2 thoughts on “Climate Change Commission has plenty of new energy developments to consider before completing its final report

  1. The Climate Change Commission will also need to take into account the impact of the Grand Solar Minimum which began in 2020 and which is expected to persist until the 2050s. The reduction in the Sun’s output will have huge implications for agriculture around the world and is predicted by some experts to result in famine if steps are not taken in a timely manner to address the issue.

    Liked by 1 person

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