MBIE: More wind and solar needed for future electricity demand
The latest Electricity Demand and Generation Scenarios (EDGS) report released by the Ministry of Business, Innovation and Employment (MBIE) says more new generation is required to meet local future electricity demand.
MBIE says electricity demand is expected to grow as existing fossil fuel use switches to electricity, electric vehicle uptake increases, and new demand—such as large-scale data centres coming online.
“By 2050, it is expected around half of all energy demand will be met by electricity,” says Markets Manager Mike Hayward.
“Modelling shows wind and solar are the most likely way to generate enough electricity to meet demand. Wind and solar technologies are more cost-effective, and future innovation will likely improve this further,” he says.
Electricity demand and generation scenarios (EDGS) are an independent set of scenarios that explore potential future electricity demand and the generation capacity needed to meet that demand up to 2050.
The Commerce Commission uses the independent scenarios to assess Transpower’s planning proposals for future capital investment in the electricity transmission grid.
The report shows an 80.9% increase in electricity demand under favourable economic conditions by 2050. This would increase the current national demand of 39.6 TWh to 71.7 TWh 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,” Hayward says.
“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 that gas will continue to play a role in supporting the electricity generation market”.
By 2035, it is expected that 92.1% of New Zealand’s electricity will be generated from renewable sources—45.7% hydro, 20.3% wind, 19.2% geothermal, 5.6% solar, and 1.4% other renewable sources—increasing to 96.3% of generation from renewable sources by 2050.
The full EDGS report can be read on the MBIE website here:
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