Electrification on target for 2050

Peak electricity demand management remains a challenge, says Transpower in its March 2023 Whakamana i Te Mauri Hiko monitoring report.

The six-monthly reports providing a window into New Zealand’s energy transition, tracking the sector’s progress against future energy scenarios.

March’s monitoring report suggests steady progress toward electrification targets across a number of key industry metrics.

The pipeline of grid connection enquiries continues to rise with sufficient generation in the mix to meet the 2050 net zero emissions target, it says.

A corresponding response is being observed from the demand side, with electricity distribution businesses planning increased capacity to meet potential load growth from process heat and transport sectors.

The report also points to the rapid evolution of new low-emissions options and alternative fuels in the mix, with growth in sustainable aviation, hydrogen and utility-scale solar exceeding original Whakamana i te Mauri Hiko scenarios.

Following the clear ramp up of new generation enquiries in 2022, Transpower continues to closely monitor the pipeline of utility-scale generation projects.

Firm interest in wind and solar continues, with grid-scale solar currently making up about half of the new connection pipeline.

Peak demand growth has risen 2% on average in both 2021 and 2022.

The report notes the rapid evolution of three major technology and fuel shifts that will impact NZ’s decarbonisation journey – clean aviation, green hydrogen and grid-scale solar.

“While these new fuels and technologies are still linked to increased electricity demand, they may significantly alter the shape of our energy future,” says Transpower customer and strategy general manager Chantelle Bramley.

”Final technology and fuel mix options remain uncertain in clean aviation, but it is a notable opportunity for decarbonisation and demand growth.”

The Ministry of Business, Innovation and Employment (MBIE) has also identified significant potential for the production and distribution of green hydrogen, which Transpower calculates could generate up to 88TWh demand by 2050.

The accelerated uptake of grid-scale solar, which has clearly overtaken residential installation, is a development that was not expected to occur until 2035.

Report highlights include transport electrification.

It says increasing consumer concern about climate change and government-led incentives for zero and low emission vehicles has led to a significant increase in EV uptake, now 1.6% of the total light vehicle (LV) fleet from 1% over the past six months.

The Clean Car Discount has also led a surge in registration of hybrids as a low emissions alternative. As of February 2023, 37.2% of vehicles entering the fleet have a battery of some kind, as compared to 6.2% in 2019.

Notably, new registrations of smaller vehicles (which have strong EV and hybrid consumer options), are losing ground to registrations of SUVs and utes, for which new fleet entries are predominantly (63%) internal combustion engine (ICE) vehicles.

The report says energy affordability needs to be maintained.

“While average household electricity bills have decreased from 2012 to 2022, over two-thirds of consumers are concerned about electricity becoming unaffordable over the next 10 years. This comes as the sector is grappling with rising wholesale prices that we expect will filter through to the prices householders pay.”

Click here for Te Mauri Hiko series reports.