Extra generation needed
New Zealand will need new generation to meet future electricity demand, according to the latest electricity demand and generation scenarios (EDGS) report released by the Ministry of Business, Innovation and Employment (MBIE).
Markets manager Mike Hayward says demand for electricity is expected to grow as existing fossil-fuel use switches to electricity, the uptake of electric vehicles (EVs) increases and new demand, such as large-scale datacentres, comes online.
“By 2050, it is expected around half of all energy demand will be met by electricity,” he says. “Modelling shows wind and solar is the most likely way to generate enough electricity to meet demand. Wind and solar technologies continue to be more cost effective and future innovation is likely to improve this further.”
The independent EDGS explore potential future electricity demand and generation capacity needed to meet that demand out to 2050.
The scenarios are used by the Commerce Commission to assess Transpower’s planning proposals for future capital investment in the electricity transmission grid.
The report shows an 80.9 per cent increase in demand for electricity under favourable economic conditions by 2050. This would result in current national demand of 39.6TWh increasing to 71.7TWh in 2050.
“The 2030s see considerable change in electricity demand and generation with increased demand for electricity, and existing coal and natural gas electricity generation capacity expected to retire,” says Hayward.
“While modelling shows increased renewable energy generation will most likely be used to meet the additional demand for the next 26 years, it also shows gas will continue to play a role in providing support to the electricity generation market.”
By 2035, it is expected that 92.1 per cent of New Zealand’s electricity will be generated from renewable sources – with 45.7 per cent hydro, 20.3 per cent wind, 19.2 per cent geothermal, 5.6 per cent solar and 1.4 per cent other renewable sources – increasing to 96.3 per cent of generation from renewable sources by 2050. The full EDGS report can be read on MBIE’s website. Click here to access it.
