Source: BusinessNZ
Meeting New Zealand’s energy needs to 2050 will cost approximately $1.3 trillion, according to the country’s latest and most comprehensive whole-of-energy-system model to date.
BusinessNZ Energy Council (BEC) Policy Advisor Ben Young says meeting New Zealand’s future energy demand will require stable, predictable and permissive policy settings that give businesses the confidence to make generational investment decisions.
“Whether we plan for it or not, new modelling indicates we will spend around $1.3 trillion meeting future energy demand as we power our homes, transport and the economy. The question is whether we can make informed decisions now to deliver a more secure, affordable and sustainable energy system for decades to come.”
TIMES-NZ 3.0, the latest energy model developed by BEC and the Energy Efficiency and Conservation Authority (EECA), provides the most comprehensive picture yet of how New Zealand’s energy future could unfold.
Young says the model gives greater insight and clarity for business and government in decision making.
“The model considers the country’s entire energy system – from fuel supply and electricity generation through to energy use in homes, transport, industry and agriculture – and identifies the lowest-cost way of meeting future energy demand under different assumptions.”
Following extensive consultation, TIMES-NZ 3.0 tests four critical uncertainties: the future structure of the economy, the pace of global technology development, climate policy and consumer behaviour, and the ongoing role of gas.
These uncertainties underpin two contrasting but plausible scenarios put forward as part of TIMES-NZ 3.0; Steady and Shift. Instead of forecasts or prescribed pathways, they test decisions against futures that could require very different technologies, fuels, and infrastructure.
The “Steady” scenario represents a future with less structural change. Primary exports and conventional manufacturing remain central to the economy, clean technology costs fall more gradually, private vehicle travel continues to grow and imported LNG is available as domestic gas supply declines.
The “Shift” scenario explores a more electrified and structurally different economy. One where New Zealand becomes less reliant on traditional primary exports, clean technology costs fall faster, advanced manufacturing and data centres grow, and consumers and businesses invest more readily in energy efficiency.
The Steady scenario isn’t static, but the economy and the energy sector change less in this possible future. In the Shift scenario, the drivers of change across a range of inputs are stronger, resulting in greater and more rapid change in the energy sector.
BusinessNZ Director of Advocacy Catherine Beard says by testing distinct future pathways, TIMES-NZ gives government, businesses and investors a stronger basis for making decisions today while reserving options for tomorrow.
“The different scenarios highlight how decisions made in one part of the energy system can create costs and consequences elsewhere. TIMES-NZ 3.0 does not try to predict or prescribe a single pathway. It helps us understand how economic, technological and policy choices interact across the entire energy system.
“Thanks to all BEC members, EECA and government departments, stakeholders and advisors whose time and expertise have helped create this essential tool for New Zealand’s future.”
The updated TIMES-NZ model incorporates extensive input from industry, government and technical experts. The model and Insights Report are publicly available now.
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