New Zealand’s Energy Outlook The Bio-Energy Opportunity? Mark Walkington Energy Information and Modelling, MED
 
Energy Outlook – Reference Scenario
New Zealand Energy Outlook – Reference Scenario <ul><li>the  Reference Scenario  is not necessarily our expectation of wha...
Energy Outlook – Reference Scenario
Energy Outlook – Reference Scenario
Energy Outlook – Reference Scenario
Industrial Energy Demand <ul><li>Renewables (2008 16% - 12% biomass, 4% geothermal) sees the greatest growth even in this ...
Residential Energy Demand
Transport <ul><li>Transport energy demand is dominated by road transport (domestic transport only shown) </li></ul><ul><li...
 
Oil demand has peaked in developed world says IEA <ul><li>The International Energy Agency's Chief Economist, Fatih Birol, ...
<ul><li>Two alternative future energy scenarios  </li></ul><ul><ul><ul><li>released April 27 th ,  www.med.govt.nz/energyo...
<ul><li>Considers a future with </li></ul><ul><li>a $100/t emissions price post 2012 </li></ul><ul><li>international oil p...
<ul><li>Transport demand reacts </li></ul><ul><li>light fleet travel demand reduction of 0.25% p.a. from 2015 </li></ul><u...
<ul><li>Large reduction in liquid fossil fuel </li></ul><ul><li>Electric not expected to be much of an option for the heav...
<ul><li>Much industrial fuel switching away from coal and gas  to Biomass </li></ul><ul><li>How to replace remainder?  </l...
New Zealand Energy Outlook – Changing Gear <ul><li>Biomass for Heat </li></ul>
<ul><li>Emissions only 5% below 1990 </li></ul>New Zealand Energy Outlook – Changing Gear
N ew Zealand Energy Outlook Thank You Mark Walkington Energy Information and Modelling Ministry of Economic Development [e...
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Mark Walkington on the Ministry of Economic Development's energy projections

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Details at http://www.victoria.ac.nz/chaplains/whatson/do-something-energy.html

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  • Strong growth in transport and Industry from 1990
  • The NZ Energy Outlook sees Continued growth – although at lower levels New Zealand’s non-transport energy demand can be split into three broad sectors: Industrial, Commercial and Residential (~35%, 10% and 13% of total demand respectively). The Industrial sector includes New Zealand’s light industry (including agriculture and construction) and heavy industry (wood processing, steel making etc). Energy demand in the industrial sector is relatively evenly spread between coal, oil, gas and electricity. The commercial sector includes wholesale and retail trade, telecommunications, financial institutions etc. Electricity dominates energy demand in the commercial sector at around 65% of the total. Electricity has also experienced the greatest demand growth in this sector. The residential sector reflects household use of energy, and excludes households’ energy use for transport which is covered in the transport demand section. Residential energy demand is dominated by electricity, with almost all of the growth in demand being accounted for in growth in electricity demand.
  • Importantly, the Reference Scenario is not our expectation of what is going to happen. Rather, it starts from an assumption of business as usual in terms of broad trends in key economic drivers and policy settings . As such, it uses central forecasts of gross domestic product (GDP) and New Zealand dollar exchange rates and assumes continuation of agreed government policies such as the emissions trading scheme. Detailed assumptions are discussed at the end of this article. The key assumptions included in this modelling are listed below: GDP growth follows the projections produced by Treasury; in the short term from the Budget Economic and Fiscal Update (BEFU) 2009, and in the longer term from the Long Term Fiscal Model where rates trend down towards the long-run labour productivity rate of 1.5%. Exchange rates to 2013 are also based on Treasury’s updated forecast. For the period 2014 to 2020 exchange rates trend towards the long term rate of 0.60 US$/NZ$ and remain at this rate indefinitely. Oil prices are assumed to follow the New York Mercantile Exchange (NYMEX) futures price in the near term, trending towards the International Energy Agency’s World Energy Outlook (WEO) mid case projection of US$120/bbl (real) by 2030.
  • Little growth in Coal (ETS) and Gas (Supply) – in Oil, Renewables and Electricity
  • Only fossil fuel; growth is in Oil demand Model turns down gas and coal for electricity production in 2030 …. Huntly last unit? Or gas price effect?
  • Energy GHG emissions stabilise around current levels
  • Some fuel switching to electricity and coal as gas price increases from 2020
  • Nearly all growth in Electricity
  • Petrol demand doesn’t increase … implications for petrol levy revenue and ACC
  • Challenges identified include our “addiction” to oil
  • Comments from the 2008 World Energy Outlook give motivation for our two Alternative Scenarios
  • Today’s release sets out alternative future energy scenarios for New Zealand that look at the implications of a big indigenous oil or gas find and how New Zealand could reduce its reliance on imported oil. These scenarios show how New Zealand might address some of the potential challenges in New Zealand’s energy future. The scenarios build on a Reference Scenario released in September last year that presented a “business-as-usual” case for energy in New Zealand. The Reference Scenario highlighted several challenges if New Zealand continues along its current path, including a continuing dependence on imported oil, the prospect of further electricity price rises, and increasing energy sector greenhouse gas emissions.
  • Changing Gear - a scenario considering the effect of high international oil and carbon prices
  • How would transport react in the face of high fuel prices? Demand reduction including uptake of public transport where available and freight moving to more energy efficient modes The continued high prices make alternative fuels and vehicles economic - electric vehicles and biofuels
  • 3.2 M ha of forests provide for 8.1 B litres Lge ……. Here 1B litres by 2040 up to 2.5 B by 2050 …… about 1 Million hectares of forest So we could make 2040 total liquid fuels of ~ 4 B litres from 1.6 M ha Scion: New Zealand has 9.6 M ha of hill country grazing with 0.8 M ha highly vulnerable to erosion.
  • Industrial Discussion
  • 240 PJ of biomass 2040 ….. ~ 850K say 1M hectares of forest ref: Scion report
  • Mark Walkington on the Ministry of Economic Development's energy projections

    1. 1. New Zealand’s Energy Outlook The Bio-Energy Opportunity? Mark Walkington Energy Information and Modelling, MED
    2. 3. Energy Outlook – Reference Scenario
    3. 4. New Zealand Energy Outlook – Reference Scenario <ul><li>the Reference Scenario is not necessarily our expectation of what is going to happen </li></ul><ul><li>rather </li></ul><ul><li>the Reference Scenario is our expectation of what will happen if we </li></ul><ul><ul><li>assume business as usual in terms of broad trends in key economic drivers, policy settings and technology </li></ul></ul><ul><ul><li>central forecasts of gross domestic product (GDP) and New Zealand dollar exchange rates </li></ul></ul><ul><ul><li>assumes continuation of agreed government policies such as the emissions trading scheme </li></ul></ul><ul><ul><li>assume current fuels and technology (i.e. no liquid biofuels or electric vehicles) </li></ul></ul>
    4. 5. Energy Outlook – Reference Scenario
    5. 6. Energy Outlook – Reference Scenario
    6. 7. Energy Outlook – Reference Scenario
    7. 8. Industrial Energy Demand <ul><li>Renewables (2008 16% - 12% biomass, 4% geothermal) sees the greatest growth even in this BAU scenario </li></ul>
    8. 9. Residential Energy Demand
    9. 10. Transport <ul><li>Transport energy demand is dominated by road transport (domestic transport only shown) </li></ul><ul><li>Heavy fleet demand sees much greater growth </li></ul><ul><li>Light fleet has greater efficiency improvement and diesel uptake </li></ul>
    10. 12. Oil demand has peaked in developed world says IEA <ul><li>The International Energy Agency's Chief Economist, Fatih Birol, says </li></ul><ul><li>“ that oil use in the developed, industrialized countries peaked in 2006-7 and will never return to those levels because of greater fuel efficiency and the use of alternatives. Mr Birol made the statement to journalists. “ </li></ul><ul><li>World Energy Outlook, 2008 </li></ul><ul><li>“ The world’s energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable – environmentally, economically, socially” </li></ul><ul><li>“ Oil is the world’s vital source of energy and will remain so for many years to come, even under the most optimistic of assumptions about the pace of development and deployment of alternative technology” </li></ul><ul><li>“ Preventing catastrophic and irreversible damage to the global climate ultimately requires a major decarbonisation of the world’s energy sources” </li></ul>
    11. 13. <ul><li>Two alternative future energy scenarios </li></ul><ul><ul><ul><li>released April 27 th , www.med.govt.nz/energyoutlook </li></ul></ul></ul><ul><ul><li>Implications of big indigenous oil or gas finds </li></ul></ul><ul><ul><li>How New Zealand could reduce its reliance on imported oil </li></ul></ul>
    12. 14. <ul><li>Considers a future with </li></ul><ul><li>a $100/t emissions price post 2012 </li></ul><ul><li>international oil prices rising to US$180/bbl by 2030 </li></ul><ul><li>i.e. petrol pump price in real terms over $3.50 /litre (incl. GST at 12.5%) by 2030 </li></ul>
    13. 15. <ul><li>Transport demand reacts </li></ul><ul><li>light fleet travel demand reduction of 0.25% p.a. from 2015 </li></ul><ul><li>heavy fleet travel reduction of 0.4% p.a. from 2015 </li></ul><ul><li>light fleet fuel economy improves 25% by 2030 </li></ul><ul><li>New technology becomes economic </li></ul><ul><li>electric vehicles to a maximum of 50% of new vehicles by 2040 </li></ul><ul><li>local production of biofuels rising to 2.5 billion litres by 2050 </li></ul>New Zealand Energy Outlook – Changing Gear
    14. 16. <ul><li>Large reduction in liquid fossil fuel </li></ul><ul><li>Electric not expected to be much of an option for the heavy fleet and off-road machines  Diesel demand remains </li></ul><ul><li>How much biofuel/biomass ……?? </li></ul>New Zealand Energy Outlook – Changing Gear
    15. 17. <ul><li>Much industrial fuel switching away from coal and gas to Biomass </li></ul><ul><li>How to replace remainder? </li></ul>New Zealand Energy Outlook – Changing Gear
    16. 18. New Zealand Energy Outlook – Changing Gear <ul><li>Biomass for Heat </li></ul>
    17. 19. <ul><li>Emissions only 5% below 1990 </li></ul>New Zealand Energy Outlook – Changing Gear
    18. 20. N ew Zealand Energy Outlook Thank You Mark Walkington Energy Information and Modelling Ministry of Economic Development [email_address]

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