Deep decarbonisation scenarios for New Zealand: perspectives of geothermal energy under climate goals

1. WIR SCHAFFEN WISSEN – HEUTE FÜR MORGEN
New Zealand deep decarbonisation scenarios:
perspectives of geothermal power generation
Bakytzhan Suleimenov, Tom Kober :: Laboratory for Energy System Analysis
ETSAP meeting, CSIRO, Newcastle, Australia, 9 December 2019

2. New Zealand’s climate change programme
Page 2
Leadership at home and
internationally
• Create an enduring domestic
institutional architecture
• Reduce our emissions out to
2050 and beyond
• Hold ourselves and other
countries to account to meet
international commitments, e.g.
Paris Agreement
• Secure a multilateral rules system
that delivers action with
environmental integrity by all
countries
• Stand with the Pacific to support
the region’s climate action and
resilience
• Invest in globally significant
research, strategic alliances and
capacity-building in developing
countries
• Place primary reliance on
domestic measures, while
retaining options for
international cooperation
A just and inclusive
society
• Consider the optimal speed and
pathways for transition
• Take early action where this
prevents greater costs in the long
run, also recognising the rights
and needs of future generations
and honouring existing Treaty
settlement commitments
• Support the transitional shift to
lower emissions and resilient
sectors, and recognise and
mitigate impacts on workers,
regions, iwi/Māori rights and
interests and wider communities
• Support those affected by climate
impacts to adjust
• Ensure information about climate
change and its impacts is robust
and accessible to aid decision-
making
• Ensure information about climate
change and its impacts is robust
and accessible to aid decision-
making
A productive,
sustainable and climate-
resilient economy
• Encourage innovation,
diversification and the uptake of
new technologies
• Seek to fully understand the
costs, benefits, risks and trade-
offs of policy levers across the
economy, society and
environment
• Identify the best-value
opportunities to reduce
emissions
• Increase our international
competitiveness by speeding up
the decoupling of emissions from
growth
• Drive behaviour change via a
range of policy tools, including
regulation, education, price-
based and support levers
• Proactively adapt to ongoing
climate change impacts and
invest to build resilience across
all hazards and risks

3. • International targets
− 5 per cent reduction below 1990 gross emissions for the period 2013-2020
− 30 per cent reduction below 2005 (or 11 per cent below 1990) gross emissions
for the period 2021-2030.
• Domestic targets (Zero Carbon Amendment Bill) in force
from November 2019
− net zero emissions of all greenhouse gases other than biogenic methane by
2050
− 24 to 47 per cent below 2017 biogenic methane emissions by 2050, including
10 per cent below 2017 biogenic methane emissions by 2030.
New Zealand emission reduction targets
Page 3

4. Page 4

5. New Zealand energy system
Page 5
• Renewable energy was 39.6% of energy supply in 2017
• In 2017 the 4th highest renewable primary energy supply among OECD countries
• 41.9 TWh of electricity was generated in 2017, 1.3% more than in 2016
• 82% of the electricity generated in 2017 was from renewable sources, down from
85% in 2016.
• Additional 1.3 TWh electricity from coal and gas generation in 2017
-
100.00
200.00
300.00
400.00
500.00
600.00
700.00
800.00
900.00
1,000.00
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Primary Energy Supply, PJ
Coal Oil Gas Hydro Geothermal Other Renewables Waste Heat
-
100.00
200.00
300.00
400.00
500.00
600.00
700.00
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Consumption by Sector, PJ
Agriculture Industrial Commercial Residential Domestic Transport

6. Total GHG emissions decomposition
Page 6
Only small share
why to focus on it?

7. Representation of the entire energy system
Page 7
TIMES New Zealand (TIMES-NZ)
Fuel supply
module
Fuel
distribution
Demand sectors
Electricity
sector
Resource module
Natural gas
SMR
Electricity
Gasoline
Diesel
Renewable
· Hydro, solar,
wind, biomass,
etc.
Electricity
storage
CO2
Demand
technologies
Residential
- Boiler
- Heat pump
- Air conditioner
- Appliances
Services
Industries
Hydro plants
Nuclear plants
Natural gas
GTCC
Solar PV
Wind
Geothermal
Other
Fuel cell
Energy
service
demands
Personal and
freight
transportation
(vkm)
Lighting
Motors
Space
heating
Hot water
Oil
Transport
Car fleet
ICE
Hybrid vehicles
PHEV
BEV
Fuel cell
Bus
Trucks
Macroeconomicdrivers(e.g.,population,GDP,Householdnumber,vkm)
Internationalenergyprices(oil,naturalgas,electricity,...)
Technologycharacterization(Efficiency,lifetime,costs,…)
Resourcepotential(wind,solar,biomass,….)
Biofuels
vkm-Vehicle kilometre
SMR-steam methane reformer
GTCC-gas turbine combined cycle plant
vkm-Vehicle kilometre
SMR-steam methane reformer
GTCC-gas turbine combined cycle plant
Oil refinery
Process
heat
Natural gas
Heating oil
Methanation
AgricultureCoal & Lignite
→ Modelling of today’s structure and future technology options and system boundaries
→ For New Zealand’s North and South Island separately (two-region model)
Displayed here, a simplified reference energy system

8. Geothermal energy – is it climate neutral?
Page 8
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
CO2 emission factor of fuel, g/kWh
Coal Diesel oil Natural gas Geo
Looks like about zero, isn`t it?

9. Power production emission intensity levels
Page 9
Actually,
25% of natural
gas value

10. Caution: emission coefficient drastically
depends on source
Page 10

11. • Works on nearly full capacity for whole year
(AF>90%)
• Long lifetime 30-40 years
• Highly predictable and stable source of energy
−Usually far from livehood areas
−Needs exploration and drilling (leading to high risk
and to high upfront costs)
➢Great source of energy but what if there will be
high carbon price?
Characteristics of geothermal power generation
Page 11

12. Technology WEM-coefficient WCM-coefficient
NI SI
Hydro - Inflexible run-of-river 0.50 0.72
Controlled Hydro 0.46 0.48 0.98
Hydro - Flexible run- of-river 0.50 0.30 0.83
Thermal - Coal 0.93 0.97
Thermal - Gas 0.94 0.97
Wind: existing
new
0.38 0.34 0.25
0.30-0.40
Geothermal 0.93 0.92
Storages n.a. 0.98
Security of supply standards
Page 12
There are two energy security of supply standards:
▪ Winter energy margin of 16% for New Zealand
▪ Winter energy margin of 30% for the South Island
There is one capacity security of supply standard:
▪ Winter capacity margin of 780MW for the North Island
BestRESforsupply
security

13. • Technologically advanced and cost optimistic scenarios
• Energy efficiency focused (e.g. high energy efficiency increase for industry or
aviation, which is described as fuel consumption without technological details)
Scenarios for analysis
Page 13
0
100
200
300
400
500
2020 2025 2030 2035 2040 2045 2050
CO2 price, NZD/tCO2
From CGE model analysis of ZeroCarbon
scenario

14. Fuel consumption patterns
Page 14
0
100
200
300
400
500
600
700
800
2015 2020 2025 2030 2035 2040 2050 2060
Total final consumption by fuel type, PJ
0%
50%
100%
2015 2020 2025 2030 2035 2040 2050 2060
Total final consumption by fuel type, %
Coal (c) Oil Gases Electricity Heat Biomass & Biofuels (d) Other (e)

15. Power system
Page 15
0
5
10
15
20
25
30
2015 2020 2030 2035 2040 2050 2035 2040 2050 2035 2040 2050
ZeroCarbon High cost Low cost
Power generation capacities, GW
Coal Coal (with CCS) Oil Gas
Gas (with CCS) Hydro Biomass Wind
Solar Geothermal Other
Geothermal
provides system
security at lower
capacities

16. Page 16
Installed capacity of geothermal power at
different CO2 prices
0
0.5
1
1.5
2
2.5
3
3.5
4
2015 2025 2030 2035 2040 2045 2050
Geothermal power capacity, GW
25 81 157 251 436
Name of the curve is CO2 price in 2050
Available technical potential

17. Power generation
Page 17
0
20
40
60
80
100
2015 2020 2030 2035 2040 2050 2035 2040 2050 2035 2040 2050
ZeroCarbon High cost Low cost
Electricity generation, TWh
Coal Coal (with CCS) Oil Gas
Gas (with CCS) Hydro Biomass Wind
Solar Geothermal Other
Gas generation stays active for whole time horizon due to WEM and WCM
with combination of lower bound on activity.

18. • One of the best technology choice at low carbon prices,
reliable and clean
• In deep decarbonisation scenarios, emissions from
geothermal energy need to be accounted
• But only extremely high carbon prices put it behind CCS
power plants
• Needs to be better represented by emission intensity levels
Conclusions
Page 18

19. • Detailed modeling of all demand sectors:
−Further demand split to lower subcategories
oMore transport modes
oIndustry, agriculture and service sectors on subcategories
oBuilding types
−Technological enhancement
• Linking with EnergyLink power dispatch model
• Possible contribution to emission budget studies for
upcoming 5-year emission budget planning
Future outlook
Page 19

20. Thanks for listening!
Many thanks to:
• BEC-NZ & the funders
• Golbon, Kiti (UoA) & Steve (Sapere)
for the great collaboration
• Kannan (PSI) for the insights into
the Swiss TIMES model & support
Contact:
bakytzhan.suleimenov@psi.ch

21. Major data sources used in the model
Page 21
Sector Data sources
General - Energy balances, 2012-2018, MBIE
- Energy in New Zealand, 2015-2018, MBIE
- Extended energy balance 2015, IEA
- GHG inventory submission 2018, UNFCCC
- BEC NZ assumptions (incl. NZ Stats)
Demand sectors
general
- EEUDB 2012 – 2015, EECA
- Energy Economic Potential Tool: Method Technical
Description, EECA
Power sector - Security of Supply Annual Assessment, 2015-2018,
Transpower
- Electricity balance, MBIE
- The Generation Expansion Model (GEM) database, MBIE
Supply sector - Scion and Concept research reports on bioenergy,
hydrogen and natural gas
- RefiningNZ annual reports
Transport sector - Transport fleet report, Ministry of Transport
- National Tranport Model of MoT
- EV uptake report (Resource Economics)