New independent report shows gas trumps coal

A new independent report says that New Zealand’s renewable energy transition should be backed up by domestically produced natural gas, rather than imported high-emissions coal.

The independent report by Energy Link, commissioned by Energy Resources Aotearoa, shows that New Zealand could have prevented 3.5 million tonnes of carbon emissions from electricity generation between 2017 and 2021, if largely imported coal was instead replaced by domestically produced natural gas.

If New Zealand switched all coal-fired electricity generation to natural gas from this point on, and half of the North Island’s coal-fired industrial process heat was converted to natural gas, New Zealand would avoid 1.8 million tonnes of emissions by 2030. This is the equivalent of taking over 93,000 cars off the road - and avoided emissions could be even higher if the coming years are drier than average.

Energy Resources Chief Executive John Carnegie says:

"We must ensure that electricity is available when Kiwis need it, particularly during dry winters. The best way to do that is with investment in more fast-start natural gas power plants, which use gas to provide electricity to the grid during times of high demand or dry years."

The Energy Link report shows that New Zealand could need up to 320 MW of new gas-fired power stations by 2038 to back up this largely renewable electricity system.

The report finds that New Zealand has enough natural gas resources to meet this demand, and that there "really is no alternative" if the lights are to stay on and the wheels are to keep turning. Energy Resource Aotearoa says the key is having the right policy settings in place to ensure gas is available in sufficient quantity, when it's required, and at the right price.

"Across the Tasman, Australia’s Prime Minister is telling the public that gas has a key role to play as a flexible source of energy that will help smooth the energy transition by delivering electricity to people when they need it. We need a similar commitment from our own Government."

These emissions reductions would be even higher if New Zealand firms were permitted to use carbon capture technologies. A growing body of evidence - including the recent Castalia report, the latest Climate Change Commission draft advice, and the new International Energy Agency review of New Zealand’s energy policies - shows that natural gas coupled with carbon capture technologies can deliver affordable, reliable, and low emissions energy to power the energy transition.

"Natural gas has a key role to play in New Zealand’s energy transition to a lower emissions economy, if only our policymakers would allow it."

Report recommendations:

  • Retain gas-fired generation into the 2030s and beyond, to provide dry year and peaking support;
  • Switch the electricity system away from burning coal as soon as possible, which could mean burning 100% natural gas or possibly switching to wood pellets at some point in the future; and
  • Convert all geothermal stations to reinject CO 2 (assuming current trials show this is economically feasible)