Opinion: Warning signs from blackouts can’t be ignored

New Zealand’s energy shortage isn’t new, but it suddenly became real for thousands of homes caught in power blackouts last month. It’s also a warning for the future that can’t be ignored.

Anyone reading the NBR knows the industrial sector is already suffering from high prices for electricity and natural gas. This has contributed to closures and job losses in industries such as refining, paper processing and methanol.

The blackouts seem to have been caused by a combination of issues, including the clear vulnerabilities of renewable power generation. But one thing is clear: without natural gas and coal, they would have been far worse. Tens of thousands of homes would have lost power and it’s not an exaggeration to say lives could have been lost.

In fact, the blackouts could have been avoided altogether with the help of natural gas that was ready and available.

Therefore, it’s odd to hear some claim ‘fossil fuels failed us’. In reality, they saved us, and could have avoided the problem entirely had they been fully utilised.

Fundamental challenge

Renewable energy is great and we need more of it, but the fundamental challenge is that it’s weather dependent, as we saw a few weeks ago.

In simple terms, wind generation doesn’t work if the wind isn’t blowing (or is too strong); solar doesn’t work if the sun isn’t shining; hydro lakes need rain.

Our worry is this could happen again. A cold, still winter night is not exactly uncommon in New Zealand.

As we become more dependent on electricity generated by the weather, the importance of a backup becomes even more important.

Battery technology to store power for when it’s needed has been talked about but is decades away from feasibility. The same goes for the idea of a pumped hydro scheme.

This is why natural gas is so important in a backup role for cold winter nights. It has half the emissions of coal, and keeps the overall price of electricity down by avoiding the need for costly overbuilds of renewable sources that might only be required once or twice a year.

By way of illustration, it’s estimated that without gas or coal as a backup fuel, New Zealand would need six to eight additional hydro storage reservoirs the size of Lake Taupo. That’s not exactly realistic.

All of this is why the Interim Climate Change Committee strongly warned against the government’s target of 100% renewable electricity by 2030. This was then carefully considered by the Climate Change Commission, who also warned against the policy.

Danger far from over

The Commission thinks we will need natural gas for electricity generation until at least 2050, and not surprisingly, we agree.

While the blackouts were bad, we are deeply worried over what will happen in future when electricity demand is even higher and natural gas supply even more precarious as gas fields reach their natural end of life.

The danger is far from over, and the impacts are being felt right now.

New investment is under way into renewables and natural gas – which is great, but our concern is we need even more to avoid our energy shortage becoming a gulf.

The blackouts came at the same time as the IPCC’s latest climate change report. The two events together provide a sobering reminder of the enormous challenges in achieving the balanced energy system we all want – reliable, affordable and sustainable.

So what can we do? For a start, the government and industry need to work together to unlock new energy investment.

We should take the pedal off anti-gas policies, such as talk of a ban on new gas connections and the 100% renewable electricity target – which is set for 2030, just nine years away. We have now clearly seen the danger of phasing out natural gas too soon before better backup alternatives are ready.

Instead of gambling on certain energy sources as winners or losers, let’s take a broader approach and focus on reducing overall emissions across all sectors.

The way to do this is through the ETS, which puts a price on carbon – and it’s working. We are seeing innovation and investment into new solar and wind farms as a direct result.

In a way, we got lucky with the blackouts. They were a wake-up call; one we ignore at our peril.

Originally published in the NBR.