Maintaining a secure, reliable supply of electricity at a reasonable cost is essential for New Zealand’s economy.
Wind energy provides about 2.5% of New Zealand’s electricity. This proportion will grow as new wind farms are constructed.
Overseas, many countries are seeking to increase their use of local, renewable resources in order to reduce their reliance on thermal generation. They see renewable energy – including wind energy – as increasing their long term energy security because it helps to:
- diversify the sources of electricity generation
- provide certainty in electricity prices as the cost of wind energy is not affected by rising fossil fuel prices
- reduce reliance on constrained supplies of fuels
Greater use of wind generation will bring will bring similar benefits for New Zealand.
Diversity in generation
Reliance on any one form of generation brings with it problems. New Zealand has sufficient generating capacity to meet peaks in demand. However, because we rely heavily on hydro generation, having the energy (in the form of stored water) to generate electricity is not certain in ‘dry years’ – years with low water inflows.
Diversity in generation improves electricity security, as it creates choices for managing electricity supply. No form of generation is completely reliable – hydro generation relies on rain, thermal plants can be forced offline by unexpected faults. Diversity enables flexibility; when there is a problem with one form of generation, other sources can be used to meet demand.
In New Zealand, a major risk is low inflows into hydro lakes. In a dry year, every megawatt hour of wind generation would mean one megawatt hour of energy left stored in our hydro lakes. Such stored energy could be used to meet peaks in demand or to balance wind’s natural variability.
Reducing reliance on thermal generation
If New Zealand were to make greater use of thermal generation to balance our hydro we would increase our exposure to the price and supply uncertainties that affect electricity prices other countries.
Increasing gas prices are already pushing up the price of thermal electricity in New Zealand. This trend is expected to continue into the future. When the electricity sector enters the Emissions Trading Scheme in 2010 the price of thermal generation will increase further.
New Zealand has an abundant supply of renewable resources. Our wind resource is one of the best in the world, and we have untapped geothermal resources as well. Solar and marine energy sources can be developed as technology improves. Making greater use of these renewable resources to balance our hydro generation will provide us with long term energy security by diversifying our sources of electricity generation.