New Zealand will require new generation to meet future
electricity demand, according to the latest Electricity
Demand and Generation Scenarios (EDGS) report released by
the Ministry of Business, Innovation and Employment (MBIE)
today.

“Demand for electricity is expected to grow
as existing fossil fuel use switches to electricity, higher
uptake of electric vehicles, and new demand – such as
large-scale datacentres coming online. By 2050, it is
expected around half of all energy demand will be met by
electricity,” says Markets Manager Mike
Hayward.

“Modelling shows wind and solar is the most
likely way to generate enough electricity to meet demand.
Wind and solar technologies continue to be more cost
effective and future innovation is likely to improve this
further.”

EDGS is an independent set of scenarios
that explore potential future electricity demand, and the
generation capacity needed to meet that demand, out to 2050.
The independent scenarios are used by the Commerce
Commission to assess Transpower’s planning proposals for
future capital investment in the electricity transmission
grid. 

The report shows an 80.9% increase in
demand for electricity under favourable economic conditions
by 2050. This would result in current national demand of
39.6 TWh increasing to 71.7 TWh in 2050.

“The 2030s
see considerable change in electricity demand and
generation, with increased demand for electricity and
existing coal and natural gas electricity generation
capacity expected to retire,” says Mike
Hayward.

“While modelling shows increased renewable
energy generation will most likely be used to meet the
additional demand for the next 26 years, it also shows that
gas will continue to play a role in providing support to the
electricity generation market”.

By 2035 it is
expected that 92.1% of New Zealand’s electricity will be
generated from renewable sources – with 45.7% hydro, 20.3%
wind, 19.2% geothermal, 5.6% solar and 1.4% other renewable
sources – increasing to 96.3% of generation from renewable
sources by 2050.

The full EDGS report can be read on
the MBIE website here: https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/energy-statistics-and-modelling/energy-modelling/electricity-demand-and-generation-scenarios

Notes

• The
  Commerce Commission is responsible for approving any major
  investments in transmission assets by
  Transpower.
• EDGS is also used as a reference by the
  energy industry, researchers, and other interested
  parties.
• The scenarios are based on macroeconomic
  assumptions – including GDP growth and the carbon price
  – and electricity demand assumptions – including EV
  uptake rate and fuel switching.
• MBIE previously
  published EDGS in 2016 and
  2019.

© Scoop Media