The cost of renewable energy 

Consumers could face larger bills, as energy companies invest billions of dollars in new projects, according to industry experts.

Geothermal sources and wind farms are good options for some companies, while other suppliers insist coal-fired plants and natural gas powered production are more efficient and reliable.

Natural Gas

Although gas prices keep rising, Genesis Energy continues to produce energy from gas and coal.

Public affairs manager Richard Gordon said the decline of the Maui field was pushing the prices up, but he maintained that natural gas in the home is a better option than electricity for heating, cooking and hot water.

He said the e3p Huntly power station is the most efficient plant in the world for generating electricity from natural gas. The half-a-billion dollar project has an output of 380 Mega Watts and will produce enough power for about 400,000 homes.

The station is expected to meet demand until at least 2009 when the Maui field is expected to run out.

Genesis is working on plans for a similar station in the Rodney district, north of Auckland, where rapid growth has extended the market by 5 percent.

The domestic gas market is only 2 percent of natural gas and home users will always have supplies, Mr Gordon said.

The situation for industrial use was a little bit tighter and it is hard to say how long it will last, he said. “There is definitely going to be a gap between supply and demand in about 8 ““ 10 years time.

“What would happen if we get to a point in 10 years time that there is not enough gas for power generation? Those power stations would simply be turned off ““ they wouldn’t be run.

“But there would always be enough gas in the pipelines for domestic. It is such a small amount of the production.”

Wind and Geothermal Energy

The executive officer of the New Zealand Geothermal Association, Brian White, says the Government’s draft New Zealand Energy Strategy to 2050 shows potential exists to produce about 1000 MWe of geothermal electricity, at prices less than or close to the cost of fossil fuel generation.

Mr White said along with power companies there is potential home owners to tap geothermal energy. He said this form of direct use, for space or water heating, involves a high front-end capital cost but low operating cost. More people were choosing this option as power prices continue to rise, he said.

Contact Energy has announced plans to start a $2 billion renewable-generation programme in wind and geothermal energy. Chief executive David Baldwin said in a press release that “wind and geothermal generation would play an important part in providing sustainable and climate friendly energy”.

Two new geothermal power stations are planned for Taupo, at a cost of up to $1 billion. The company was hoping the Government would help push the resource consent process through quickly. But the company is still awaiting resource consent for an application put forward in 2001 for a station at Wairakei.

Trust Power is currently pursuing four wind farm sites. Meridian Energy spokesperson, Helen Morgan Banda, said Meridian is committed to using only renewable sources for power generation. Meridian is currently building a wind farm in Southland with 29 turbines, producing enough energy to supply 30,000 average-sized homes. The project should be completed by the mid-2007.

Coal

Mighty River Power’s plans to restart the Marsden B coal-fired power station in Whangarei, could be thwarted following pressure from Greenpeace.

The company has faced an uphill battle since lodging the resource consent application in 2004.

Greenpeace appealed against the consent, leading to a lengthy battle in the Environment Court.

Greenpeace said, in a media release, that the project will contribute toward “climate chaos”.

Genesis Energy joined the appeal process in 2006, siding with Mighty River Power and citing effects on their own coal-fired power plants.

Mighty River Power said coal-fired power was a cheaper, more pragmatic option because coal was easy to source and the plant was already available. They said renewable energy sources such as solar, wind, and hydro electricity, were weather-dependent making them less reliable.

Sustainable Energy?

Genesis Energy public affairs manager Mr Gordon said future power supplies appear to be assured, providing that levels of rainfall in the South Island continue to be good throughout Autumn and Winter.

“The situation last year was very precarious ““ we were all thinking we were about to have a major shortage ““ we, us and others, were about to launch major energy savings campaigns aimed at consumers and we were saved really in the nick of time by good rain in the South Island that suddenly filled up the lakes again. We are pretty much weather dependent for hydro and wind.”

He said that introducing carbon costing will cost the consumer.

“The whole point of pricing carbon dioxide emission is to reduce those emissions and get more investment into renewable energy and essentially that cost, whatever it will be, will ultimately be paid by electricity or energy consumers.”

Energy consultant, Bryan Leyland, said it was time to “again introduce an element of long-range central planning into New Zealand’s energy future”.

“Gas is good ““ but we should have encouraged exploration 10 years ago. Wind power can be unreliable ““ last year during peak (energy) demand, there was no wind ““ very often when you need it, it is not there.”

He doubted that more than MW of wind power could be managed in New Zealand “without serious operational problems and the need for large amounts of thermal generation to provide backup”.

“Countries such as Brazil, India and Australia recognize that nuclear power is the only effective way of making a difference- if you believe in global warming,” he added. But regulations around carbon emissions will come at a very high cost to the customer because it will put up the cost of coal-fired generation, he said.

“Carbon tax and coal-fired fuel will push up the price of electricity ““ whether wind farms, carbon taxes or encouraging biofuels ““ it all works against economic wellbeing.” -Brian Leyland, Energy Consultant.

By Diane Cordemans
Epoch Times Hamilton staff

epochtimes.com

5 March 2007