As Genesis Energy, NZ’s largest electricity and natural gas retailer, sees it, for New Zealand to reach its current target of net zero by 2050, 60% of the country’s energy needs to come from electricity, up from around 38% today.
At least 95% of that electricity needs to be renewable, up from around 80% today, and it will need to be practically available 100% of the time. This includes winter peaks, periods of low wind, and dry years.
Malcolm Johns, CEO of Genesis Energy treats those goals as “the first principle of our operating context for the next 25 years: 60 – 95 – 100”.
“New Zealand has the opportunity to not only secure dry-year cover using biomass from domestic forests, without disrupting logs for export or construction, the potential supply is also large enough to ultimately displace coal and gas, securing the electricity system with domestic fuel storage for generations to come.”
At Genesis Energy’s Annual Shareholder Meeting in October, he commented further on our recent winter’s electricity shortages. “During winter ‘24, hydro and wind generated 30% less electricity than the year before. The system didn’t have this covered and as a result the country was short of stored energy reserves with the result being volatile wholesale electricity prices.”
One casualty of the electricity price spike was the closure of Winstone Pulp, a key exporter passing between 15,000 and 19,000 20-foot-equivalent units (TEU) of pulp and containerized timber through the Port. The Port will lose 7-8% of its export trade earnings.
But Johns says the answer lies in wood. “New Zealand’s largest, cheapest, most sustainable and reliable energy storage for electricity sits in our exotic forests.” Sounds like a great opportunity for forest-rich Hawke’s Bay.
Blue sky aspiration? Genesis appears to be putting its money where its mouth is.
The company has successfully trialled burning wood pellets at its Huntly power station.
With Johns concluding: “Biomass through the Rankine units offers the country as much a 4.5 TWh of stored energy to cover the 1-2 TWh of energy reserves needed to cover years of low hydro and low wind. Biomass used in the Rankine units produces competitive electricity prices … Under our new strategy Genesis is pursuing biomass at some speed, investing in a dedicated team to deliver real outcomes at volume by financial year 2028.”
And obviously not just more electricity, but clean electricity.
“Until we secure a reliable supply of sustainable biomass, less gas does mean more coal for the Rakines … FY24 saw us burn a lot more coal, with a resulting increase in emissions of 1.2 million tonnes of CO2 compared to FY23.”
So, what about sustainable supply of biomass … and where does Hawke’s Bay fit in?
Biomass for heat
As quoted in NBR, a Genesis spokesperson noted at the annual meeting: “One of the options we are pursuing is small modular biomass production units that you can take into where forest-based material is available. That includes the sort of slash that we’ve learned about particularly since Cyclone Gabrielle.”
Here in Hawke’s Bay we certainly have pine trees and slash! And we burn gas, suggesting a different regional opportunity – burning biomass for heat, not electricity.
As we’ve reported online, an investigation carried out with industry input here in Hawke’s Bay by NZ’s Energy Efficiency and Conservation Authority (EECA), the Regional Energy Transition Acceleration project (RETA),has looked at 44 commercial sites (each with minimum 500 tonnes/p.a. of emissions) that use 86% of HB’s piped gas, conferring with the businesses involved and inquiring into their energy use and future plans.
The RETA analysis has compared electricity and biomass as alternative power sources and has found that biomass would be the most economical solution in each of the 44 businesses reviewed.
To supply the requisite biomass for all to switch, HB foresters would need to harvest 230,000 ‘green’ tonnes per year. RETA has met with the region’s top forestry companies to arrive at an assessment of the harvest potential over the next several decades. The harvest is projected at 2.5-5Mt per year. And further analysis indicates the ‘residues’ (think slash, chips from current processing) generated from this would easily supply HB’s biomass demand at an affordable price taking into account all recovery and processing costs. And if our region’s low-grade logs were added in (now shipped mainly to China where they are chipped for biomass), the woody biomass supply would double.
So, what are the obstacles to HB converting its industrial gas use to biomass? The need for infrastructure collaboration amongst both users and suppliers.
On the demand/user side there is no single business with the energy demand to support its own biomass set-up, so the solution would be a group of users – e.g. at Awatoto or Whakatu – to aggregate their demand and feed off a shared system.
Likewise on the supply side. Rather than numerous forestry companies operating depots to store and process the wood residues, a central supply hub at scale would be the sensible solution.
Whether used to generate heat or electricity, it seems the ‘powers that be’ in Hawke’s Bay should be exploring biomass for all its virtues – emissions reduction, cost advantage, environmental clean-up and regional energy resilience.
Regional Councillor Xan Harding, Chair of HB’s Joint Action Climate Committee comments: “Stationary heat represents nearly a third of our regional carbon footprint (ie. excluding methane). The significance of the news from EECA that we could economically transform slash into renewable fuel to eliminate such a significant portion of our regional carbon emissions is monumental and should become a key focus area for our committee.”
Lucy Laitinen, CEO of our Regional Economic Development Agency adds: “REDA has been supporting EECA’s RETA decarbonisation programme for HB. The final report from EECA is due end of November. As part of that process forestry companies in HB are starting to look collectively at the opportunities for the commercialisation of biomass supply and early work on the demand side is also being carried out.
REDA is keen to see this market being explored due to the potential positive economic and environmental implications and will continue to support where we can. We will know better in the next month or two what actions we can support.”
Sounds promising.
Meantime, individual HB companies are making energy-use changes:
• Napier Pine gas boiler to biomass boiler
• AFFCO Wairoa coal boiler to biomass boiler
• Bremworth gas boiler to high temperature heat pump
• Woolworks gas boiler to high temperature heat pump
• Ovation to electric boiler
Stay tuned!
BayBuzz energy and climate reporting is sponsored by Unison in support of independent local journalism. Any editorial views expressed are exclusively those of BayBuzz. Unison is not associated with those opinions.
