A windfarm in the hills behind Huntly could generate up to half the electricity that the power station can. Photo / 123rf
A windfarm in the hills behind Huntly could generate up to half the electricity that the power station can. Photo / 123rf
Opinion
COMMENT
Energy Minister Megan Woods' recent announcement that the Government will seriously investigate pumped hydro for electricity generation could be a major step in moving towards a 100 per cent renewably powered electricity system.
It provides a way of generating electricity, without the use of fossil fuels, when other powersources are not able to meet the demand. Water is pumped up into dams when surplus power is available, then used to generate electricity when needed. The dams effectively become giant batteries, which can store power for months, or even years if required.
Pumped hydro could be a strong contributor to a dependable renewably powered electricity supply but it will take significant time and expenditure to achieve.
There are other ways of reducing our reliance on fossil fuels for electricity generation that are far simpler, faster and cheaper to implement. These involve changing the way our electricity market operates.
Currently, electricity providers submit regular bids to have their power fed into the grid. The highest bid that is accepted to meet the market demand for a given half-hour period sets the price that all the other contributing electricity generators receive.
At present, the Huntly power station, which runs on coal and natural gas, is often that highest-bidding generator contributing to our North Island power supply. The other companies feeding into the grid welcome this because they all receive the same price for their electricity that Huntly does, which pushes up their profits.
There is even some evidence that one or more of them have taken steps such as deliberately spilling water over their hydro dams so as to keep Huntly in the market.
The outcome of this is that development of renewable power sources is strongly suppressed, despite the fact that it is often a lower cost generating option than using fossil fuels, and despite our urgent need to move in this direction.
Also, consumers end up paying more for their power than they would if charges were based on actual generation costs.
Two things need to happen to sort out this dysfunctional market and allow us to start rapidly reducing our use of fossil fuels for producing electricity.
First, we need to follow the example first set by the German government in 1991, and change our wholesale electricity market so that it gives precedence to electricity generated from renewable resources. This will give a very clear message to producers that renewable generation must be our path forward. But on its own this change will not be sufficient.
Second, we need to move to a regulated electricity market, that is properly monitored and controlled, where providers present bids that reflect the real cost of their generation, and this is what they receive when their bids are accepted. They will then be able to increase their profits by producing more renewably generated electricity rather than by holding back on this to keep Huntly in the mix.
Peter Whitmore. Photo / Supplied
What would happen if we made these changes? There would almost certainly be a rapid increase in the development of renewably powered generating plants, creating many new jobs and business opportunities while reducing our reliance on fossil fuels. For example, there are currently around 10 consented but unbuilt wind farms in New Zealand, including one in the hills behind Huntly which could potentially generate up to half the electricity the Huntly power station can.
New Zealand also has other renewable options that could be developed. For example, a major tidal powered station was planned for the Kaipara Harbour, north of Auckland, but the project was abandoned in 2013 because of uncertainties about the electricity market. We could expect to see projects like this come to life again.
Another strong plus for bringing in these changes is that they can be expected to immediately reduce electricity prices.
We are told by scientists and others that, in order to protect the planet and to ensure the earth remains a viable living place for humanity, we need to very rapidly reduce our emissions from the burning of fossil fuels to essentially zero.
Fixing our dysfunctional electricity market is one of the steps we urgently need to take to achieve this.
• Peter Whitmore is an executive member of Engineers for Social Responsibility.
