MARKETS

Coal's downward spiral in NZ

FOSSIL fuels appear to be a dying breed in New Zealand's power mix, with new government revealing...

Anthony Barich

Power generation from gas and coal-based power plants declined by an average of 18%. Oil and waste heat were the only ones from the fossil fuel family to experience an increase in power generation.

The figures were released tin the Ministry of Business, Innovation and Employment’s December quarter 2014 edition of the NZ Energy Quarterly.

Coal production in New Zealand in the December quarter was 988 kilotonnes, bringing the 2014 calendar year total production to 3984kt, down by 13.9% from 2013 levels.

The government report revealed that coal exports for the 2014 calendar year also dropped by 16.9% from 2013.

When compared with December quarter 2013, production of bituminous and sub-bituminous coal in the December quarter 2014 was down significantly, while production of lignite increased over the same period.

New Zealand has known in-ground coal resources exceeding 15 billion tonnes, more than half of which is potentially recoverable.

The country’s largest coal resource is lignite in Southland and Central Otago. There are also substantial resources of sub-bituminous coal in both islands, and a lesser amount of high-quality bituminous coal, mainly on the West Coast of the South Island.

Over 93% of all production is of bituminous and sub-bituminous coals. Although lignite makes up 80% of national coal resources, lignite production in 2013 represented only 6% of total production, mostly as a consequence of its high moisture content and distance from the main centres of energy demand.

Coal production is centred on the Waikato, mainly for several major industrial users and the Huntly power station, the West Coast mainly for export and Otago/Southland mainly for local industrial markets.

At 79.9%, NZ’s share of renewable electricity generation in 2014 was the highest it has been since 1996.

Energy and Resources Minister Simon Bridges said the 79.9% figure was an increase of nearly 5% on 2013, when the share of renewable electricity generation over the year was 75.1%.

During much of the previous decade the share of renewable electricity generation was in the 60-70% range, before beginning to climb in 2009.

“So the overall trend is very positive and shows we’re making strong progress towards our ambitious goal of having 90% of New Zealand’s electricity supply generated by renewables by 2025,” Bridges said.

Geothermal generation has more than doubled over the past decade and for the first time in 40 years, geothermal electricity generation contributed more electricity than natural gas during 2014.

“This is a clear sign that when a Government enables a market with direction and certainty, it results in real investor confidence”, Bridges said.

“These figures are a reminder of the renewable advantage New Zealand enjoys as a result of our abundant energy resources. New Zealand’s share of renewable electricity generation is the fourth largest in the world.”

Bridges said the fact that the value of the renewable energy industry was growing across the globe presented opportunities to leverage New Zealand’s expertise and experience.

Bridges will be promoting New Zealand’s “renewable advantage” this month when he leads a delegation to the April 19-24 World Geothermal Congress in Melbourne.

“The Congress is a unique event that brings together members of the geothermal community from around the world,” Bridges said.

“I want to ensure that we make the most of the huge comparative advantage we have in New Zealand’s renewable energy supply and expertise, particularly in geothermal.”

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