Energy – Massive increase in coal-fired generation proof that gas is needed to fuel New Zealand’s future

New data from the Ministry of Business Innovation & Employment (MBIE) shows that between April and June this year, coal-based electricity generation increased over 500% from the same quarter last year.

Energy Resources Chief Executive John Carnegie says coal-fired generation has been required to support gas-fired generation while New Zealand tries to make up for a reduction in hydro and wind generation during a dry and relatively windless winter.

“While generation from natural gas increased last year, net production of gas was down 19%, meaning without new exploration it can no longer fully back up low hydro lake levels as it should. This leaves New Zealand’s energy system lurching from crisis to crisis.

Decreasing gas supply has meant we’ve seen large users operating at lower levels, and in some cases unfortunately, forced to close.”

This has resulted in an environmental own-goal – we have to ask ourselves whether the previous government’s single-minded pursuit of gross emissions reductions over the real, legislated net-zero target was a sensible approach.

The evidence is clear. When coal has generated more electricity for Kiwis than wind, rebuilding our gas reserves needs urgent attention, and clearly, we have more work to do.” Carnegie says.

Stats released this week also show New Zealanders shivered through the coldest May in 15 years.

“While we acknowledge the heavy lifting Genesis is doing to protect our nation’s energy security with its coal-fired Huntly plant, New Zealand homes are now reliant to an uncomfortable degree on imported coal to stay warm during the winter.

We must be more realistic about how to be an energy resilient nation that can keep households healthy and fuel the industries that employ thousands of Kiwis in the regions.” Carnegie says.

Energy Resources Aotearoa is New Zealand’s peak energy industry body. We represent participants from right across the energy system, providing a strategic sector perspective on energy issues and their adjacent portfolios.