New Zealand Waves Goodbye to Coal

New Zealand made a big announcement: the era of coal is about to end.

In late 2018, the last two coal-fired power plants will shut down.

"Historically coal has played an important role in ensuring the security of New Zealand’s electricity supply, particularly in dry years where our hydro-lake levels are low. But significant market investment in other forms of renewable energy in recent years, particularly in geothermal, means that a coal backstop is becoming less of a requirement," explains Simon Bridges, Minister of Energy and Resources.

The utility, Genesis Energy, decided to close the plants because of the "development of lower cost renewable generation, principally wind and geothermal, investment in the HVDC link, and relatively flat growth in consumer and industrial demand for electricity," says CEO Albert Brantley.

Coal Emissions

"Advance notice of the unit closures will give the energy industry time to consider further investment in renewables," says Bridges, noting that significant geothermal projects have been approved and are waiting for development.

Hydro is the main source of electricity, and combined with geothermal (about 14%), supplied 80% of power last year. Geothermal is growing rapidly, surpassing natural gas for the first time in 2014. The goal is to run on 90% renewable electricity by 2025. 

New Zealand greatly lags developed nations for solar with just 13 megawatts because of the lack of any policy support. The industry is expected to begin growing anyway now prices are so low, but right now a mere 13 MW is installed, according to Renewable Energy World.  

Last month, New Zealand submitted a fairly weak climate target to the UN – emission cuts of 30% by 2030 from 2005 levels. 46% of emissions come from agriculture (even though it leads on organic acreage), in contrast to 11% in most developed countries, according to the Ministry for the Environment. The country has been running a cap-and-trade system since 2010, but it doesn’t include agriculture.

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