Eloise
Gibson, Climate Change Correspondent

Wind
and solar are the “least cost” way to meet booming demand
for electricity, according to a report from the Ministry of
Business, Innovation and Employment.

The ministry’s
(MBIE) report looks at how demand for electricity will
change as people adopt electric vehicles, electric heating,
and other electric replacements for fossil fuels, and how
demand will be met.

By 2035, the report expects New
Zealand’s electricity generation to be 92 percent renewable
(hydro, wind, solar and geothermal), reaching 96 percent by
2050 – or as high as 98 percent, depending on how events
play out.

That is slightly up on what the ministry
expected five years ago, when it predicted about 95 percent
renewables by 2050 in any scenario.

A major wild card
is how soon Genesis Energy can stop burning
coal to make electricity at its Huntly Power station,
according to the analysis.

The ministry said most new
demand for electricity would likely be met by building more
wind and solar power, however, gas would still play a small
role in generating power in 26 years’ time. It said the
country would need new gas peaking plants, which could
switch on at times when supply
was tight.

“The least cost solution to meet most
new demand is onshore wind and solar generation,” the report
said.

“We also expect to see some new hydro and
geothermal plants built.”

The Commerce Commission uses
these supply and demand reports when it decides whether to
approve major investments in the electricity transmission
grid by Transpower. Researchers and others use them to help
predict energy trends.

The 2024 report said commerce
and industry would drive growing demand for electricity in
the short term.

In the 2030s, higher EV uptake will
drive the trend.

Also contributing to a boom in demand
in the 2030s will be new
data centres built here by major computing companies,
and coal and most gas exiting the electricity
sector.

The ministry said it was uncertain how many
people would switch to electric heating from burning fossil
fuels such as gas, but this trend would also increase
demand, especially at peak times in winter.

Under
favourable economic conditions, by 2050, demand for
electricity will rise 81 percent compared with today, from
under 40 TWh (Terawatt-hour) to 72 TWh, the report
concludes. If current trends continue, demand will grow to
62
TWh.

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