Transcript Document

Wind Energy in NZ
NZWEA - RMLA Seminar
Auckland
Thursday 9 November 2006
Fraser Clark
Chief Executive
New Zealand Wind Energy Association
The NZ Wind Energy Association
“to promote the uptake of New Zealand’s abundant wind resource as a
reliable, sustainable and clean energy source.”
• 70 members, including:
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4 of 5 major retailer/generators
Transpower and several large lines companies
Wind turbine manufacturers
Range of other interested organisations including developers,
consultancies, financiers and legal firms.
• 700% increase in membership revenues and
200% increase in membership since 2004
Existing NZ wind energy capacity
Name
Year
Commissioned
Region
No. of turbines
Turbine capacity
Te Rere Hau
2006
Manawatu
5*
500 kW
2.5
Southbridge
2005
Canterbury
1
100 kW
0.1
Te Apiti
2004
Manawatu
55
1,650 MW
90.8
Tararua II
2004
Manawatu
55
660 kW
36.3
Hau Nui II
2004
Wairarapa
8
600 kW
4.8
Gebbies Pass
2003
Canterbury
1
500 kW
0.5
Tararua I
1999
Manawatu
48
660 kW
31.7
Hau Nui I
1996
Wairarapa
7
550 kW
3.9
Brooklyn
1993
Wellington
1
225 kW
0.2
TOTAL
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181
-
170.8
* When completed the Te Rere Hau project is expected to consist of 97 turbines generating a total of 48.5 MW
Project Capacity
(MW)
Projects under construction
Name
Commissioning
Region
No. of turbines
White Hills
2007
Southland
29
2,000 kW
58.0
Tararua III
2007
Manawatu
31
3,000 kW
93.0
TOTAL under construction
60
TOTAL at end 2007
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241
Average turbine size:
Existing:
Turbine capacity
944 kW
For 2007:
2,517 kW
At end 2007:
1,335 kW
(635 kW excluding Te Apiti)
Project Capacity
(MW)
151.0
-
321.8
Potential wind farms
Project
Te Rere Hau
West Wind
Developer
Consent
Lodged
NZ Windfarms
Region
Project capacity
Status
Manawatu
Up to 46 MW
Financing next stages
Meridian Energy
July 2005
Wellington
Up to 210 MW
Awaiting Court decision
HBWF
May 2005
Hastings
Up to 225 MW
Consented (after appeal)
Titiokura
Unison/Hydro Tasmania
Apr 2005
Hastings
Up to 48 MW
Consented (after appeal)
Te Waka
Unison/Hydro Tasmania
Jan 2006
Hastings
Up to 111 MW
Consented and appealed
Ventus
Waikato
Up to 20 MW
Consented
Taharoa
Taharoa C/PowerCoast
Waikato
Up to 100 MW
Consented
Motorimu
Allco Wind Energy
Nov 2006
Manawatu
Up to 110 MW
Applied for consent
Hayes
Meridian Energy
Nov 2006
Central Otago
Up to 630 MW
Applied for consent
Awhitu
Genesis
Apr 2004
Franklin
18 MW
Consented (after appeal)
but deferred
Hawkes Bay
Taumatatotara
TOTAL
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Up to
1,518 MW
This is just the projects in the consenting phase.
Many others have been announced or are under investigation.
Global developments to end 2005
Source: GWEC Global Wind Energy Outlook 2006
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20-35% pa growth in last 5 years
Nearly 60,000 MW installed
100,000 + jobs created
€11bn per year of investment
How much is too much?
Country
Population
Density
(#/km2)
Denmark
117
3,128
5.3
43.1
72.6
Germany
230
18,428
31.2
356.9
51.6
77
10,028
17.0
504.8
19.9
244
1,337
2.3
244.9
5.5
29
9,149
15.5
9,629.0
1.0
3
708
1.2
7,682.0
0.1
15
168
0.3
268.7
0.6
Spain
UK
United States
Australia
New Zealand
Installed wind
capacity
(MW)
Data as at end 2005. Based on data from 2005 IEA Wind Energy Annual Report
Installed wind
capacity
(% world total)
Land area
(‘000 km2)
Density
(MW/1,000 km2)
Wind Energy in the national
electricity market
According to the latest MED data:
(year to end March ‘06)
168 MW of 8,840 MW total capacity (1.9%)
619 GWh of 41,563 GWh total generation (1.5%)
• Still some way to go to get to the 20% of national
demand that the Government has suggested.
• NZ consumption has increased by 6,500 GWh p.a.
since first windfarm in ’96 (740 MW equivalent)
Policy is the key to wind energy’s
development
• A stable and long-term policy for wind/renewables
generation is widely regarded internationally as being
the greatest factor in wind energy growth.
• Government policy gave the industry its start (carbon
credits and PRE) but this was short-lived and limited.
• The proposed carbon tax could have benefited wind
energy, but was withdrawn before it was implemented.
While NZ policy blows hot and (currently)
cold, wind energy worldwide is booming
• NZ one of few (if not only) developed nations without a
wind/renewables incentive such as:
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“feed in tariff” (i.e. fixes price)
fixed renewables quota (i.e. sets minimum quantity)
development subsidy
tax credit (i.e. USA)
• Even developing (i.e. non-Kyoto) countries have
incentives, including India & China
• Policy provides project certainty for financing and can
help to open up markets to a wider range of parties
(i.e. independent power producers).
Impacts of inconsistent policy
• The Production Tax Credit (PTC) in the USA is
applied inconsistently by the Federal Government,
creating “boom & bust” style development:
3000
2500
2000
MW
* Year without PTC
1500
1000
500
0
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*
1999 2000 2001 2002 2003 2004 2005 2006
Year
• Many States now implementing their own
renewables policies to create a stable investment
environment
What next for New Zealand policy?
• The NZ Energy Strategy (NZES) and National Energy
Efficiency & Conservation Strategy (NEECS) are under
review, with drafts expected in late November.
• Policy for wind energy is sounding promising:
“It will be necessary to show a preference for new generation to be renewable, at least until
such time as clean technologies, such as carbon capture and sequestration, are proven to be
both practical and economic. Therefore, the Strategy will consider various incentive options to
support the development of additional cost-competitive renewable energy sources. The
Strategy will also address deployment hurdles for low- and zero-carbon energy alternatives by
providing more planning certainty, and by creating a more dynamic environment for energy
innovation.” – Energy Minister David Parker
• National Party now also recognising climate change
and renewable energy in policy statements.
Potential issue #2 – Grid Integration
• Grid systems the world over have typically been built
for large, centralised and thermally-fired power stations
• Wind turbines require a fundamentally different
approach (to thermals) in both connection rules and
dispatch processes
• Without a robust core grid and good inter-regional
connectivity, wind energy’s potential will not be fully
developed.
Grid integration issues
NZ has some specific transmission issues:
• “long and stringy” (rather than a “network”)
• islanded, rather than inter-connected.
• dispatching wind with hydro can reduce variability
(but will affect the way reserves are managed)
• The Electricity Commission’s Wind Generation
Integration Project (WGIP) reports in December.
Transpower have been involved.
• Increased Government emphasis on and support for,
comprehensive and strategic grid investment plans is
also required.
RMA Issues Remain
• Public issues are typically noise and visual amenity
• Issues typically raised by those who stand to be most
significantly impacted (i.e. nearby residents).
• Opposition arguements can be highly emotional and
often unsubstantiated or based on biased reports.
• Vocal and visible minority opposition could affect wind
energy’s excellent public perception.
Have project costs increased?
• Wind turbine costs have increased in past 12 months:
– Global demand for turbines has increased
– New turbine manufacturing and R&D capacity installed
– Huge global demand for components such as gearboxes and
bearings (not just wind but mining and whole energy sector)
– Publicly listed turbine manufacturers seeking rates of return
demanded by investors
– Risks to manufacturers in warranties, etc.
• Expected to continue for next 12-18 months at least
• Component pricing (gearboxes, etc.) and global
demand will also be affecting new thermal generation
What about the exchange rate?
• Exchange rate affects ALL forms of new generation,
not just wind.
• Influences wind energy’s price relative to existing
generation, rather than to other forms of new
generation.
• With wind there is no fuel price variability
Alternatives also have issues
NZ’s future energy supply will come from a range of
sources, but many will have issues of their own:
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Natural gas/LNG
- price (not just LNG but also local) will move towards international price.
- potential availability and price stability issues
- investment in LNG infrastructure could add $12/MWh to electricity price.
- thermal efficiency can be viewed similarly to wind’s capacity factor.
Clean coal
- still 10 years from commercialisation (and potential risks remain)
- net efficiency loss means cost impact for produced electricity
Wave and tidal
- huge potential but still some way from commercial development.
Nuclear
- infrastructure, waste disposal, energy independence, scale, etc.
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All of these options will also have RMA issues of their own…
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Efficiency gains will reduce but not remove energy demand
What next for wind energy in NZ?
Gazing into my crystal ball…
• Westwind receives approval from Environment Court
with announcement to proceed in early 2007
• Some form of incentive for renewables included in
proposed NZES/NEECS but developments delayed until
policy becomes legislation (mid-2007?).
• Movement towards ‘best practice’ for windfarm
developments to smooth the consenting process.
• Global awareness of and action on climate change
continues, increasing awareness of wind energy
The Sales Pitch
NZWEA welcomes new members:
Corporate: $3,500 + GST
Associate:
$ 950 + GST
Membership application available on-line.
NZ Wind Energy Conference
March 13 – 14 2007
Te Papa, Wellington
www.windenergy.org.nz