Goodbye cheap energy - now it's time to save

By SIMON COLLINS



Only one thing is certain about power prices - they are sure to go up. Project Aqua was the last big potential source of cheap

hydro-electricity. From now on, it's tougher. Either we pay for more expensive power from smaller hydro schemes, wind farms, coal or other sources, or we reduce the amount we use. Here's how.


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A typical Auckland household pays 15c for a kilowatt-hour (kWh) of electricity. About 6c of that pays for generating the power, Transpower gets 1c for transmitting it to towns and cities, and 8c goes to the local lines company and retailer who bring it to the door.

The average household uses 8000kWh of power a year and pays $1200 a year, or about $100 a month, for it.

New Zealand used 36,300 Gigawatt-hours (that's 36,300 million kWh) of power last year. Consumption has grown by an average of 400GWh a year over the past decade.

Option 1: Turn off unused appliances (cost zero).

About 10 per cent of your bill pays for standby electricity drawn by appliances such as a TV or computer when they are not being used but the plug is still turned on at the wall. We could save 1260GWh, or more than three years' growth in power use, if we all turned them off.

Option 2: Low-flow shower (cost 1.6c/kWh).

You could save $66 a year on the power bill by cutting hot water use with a low-flow shower head. If the shower head costs $50, lasts 10 years and it would cost 7 per cent in interest to borrow the money from the bank, that's an average cost of 1.6c per kilowatt-hour saved.

If all households installed these shower heads, they would save 550GWh of power a year, or a bit over one year's growth in power use.

Option 3: Bioenergy (cost 2c/kWh).

Auckland company Living Energy says we could save the equivalent of 2000GWh of electricity a year if we used half the country's wood wastes for heat. That would save the equivalent of five years' growth in power use.

Option 4: Efficient lights (cost 2.2c/kWh).

Replacing six standard lightbulbs with long-lasting compact fluorescent lightbulbs at $8 each would cut $74 a year off your power bill. On a national basis, that would save 620GWh, or about one and a half years' growth.

Option 5: Hot-water cylinder wrap (cost 2.8c/kWh).

Wrapping insulation around your hot-water cylinder would cost about $120 (including labour) and save about 600kWh of electricity a year.

If the 400,000 households that have hot-water cylinders installed before 1986 wrapped them in insulation, it would save 280GWh, or a bit under a year's growth in power use.

Option 6: Ceiling insulation (cost 7.6c/kWh)

If the 300,000 homes that don't have ceiling insulation installed it for $1100 each, they could each save an average $204 a year and New Zealand would save 409GWh, or about one year's growth in power use.

Option 7: Solar water heater (cost 13c/kWh).

A solar water heater on the roof would cost about $3500 and save $375 a year on your power bill. If all 25,000 new houses built every year installed solar water heaters, the country would save 62GWh, or about two months' growth in power use.

Option 8: Natural gas (cost 14.4c/kWh plus 0.7c carbon tax).

Electricity could be generated at a new natural gas-fired station at Huntly for about 5.4c/kWh, or about 14.4c including transmission charges - slightly below current power prices.

But no extra gas is available. Under current policy, gas-fired stations will also pay a carbon tax which could add about 0.7c/kWh to gas-derived power.

Option 9: Geothermal (cost 15-16c/kWh).

Geothermal Association president Jim Lawless says New Zealand could double its extraction of geothermal energy without causing geological damage. Government projections show geothermal rising from today's 7 per cent of total power supply to 15 per cent by 2025 - the equivalent of about eight years' growth in power use.

The major question mark hangs over regional council judgments of how much steam can be extracted without damaging the surrounding environment.

Option 10: Coal (cost 15c-16c/kWh plus 1.4c carbon tax).

Dr Don Elder, of Solid Energy, says coal-fired power stations could be built in the Waikato "at or below today's wholesale price" of around 6c/kWh, or in Southland for less than 5c/kWh. But a $2 billion upgrade of the national grid would be needed to get the Southland power to Auckland, lifting its price to perhaps 1c above the current price.

Coal would also bear the full weight of a carbon tax, pushing the price up by a further 1.4c/kWh.

Option 11: Wind (cost 16.5c/kWh).

Genesis chief executive Murray Jackson says a 1.5c rise in power prices would be needed to make new wind farms economic without subsidies. The Government has given "carbon credits" to proposed wind farms near Waiuku and in the Wairarapa, Manawatu and Hutt Valley districts.

Wellington consultants East Harbour Management say wind farms could supply up to 10,000GWh, equivalent to 25 years' growth in power use, by 2025.

Option 12: Hydro (cost 17c/kWh).

Power companies still have dozens of smaller hydro schemes on their drawing boards. East Harbour Management says they could supply up to 11,370GWh of extra power a year, or 28 years of growth in power use.

It puts the generation cost of the next-biggest scheme after Aqua, at Luggate on the upper Clyde, at 8c/kWh, but transmission charges could add up to another 1c.

Option 13: Nuclear power (cost 17c-18c/kWh).

Energy consultant Bryan Leyland says nuclear power has to be back on the agenda if a carbon tax makes coal and gas uneconomic. He picks the Kaipara Harbour as a likely site because the fastest growth in power demand is in and north of Auckland.

East Harbour Management says the cost would be 2c to 3c above the present wholesale power price, allowing for the extra cost of seismic strengthening and other measures.

Option 14: Photo-voltaic panels (cost 90c/kWh).

The Photo-Voltaic Association says solar panels generating 10kWh of electricity a day would cost $35,000. Over 20 years, allowing for the cost of borrowing, that works out at 90c/kWh. Panels would be economic only if power companies agreed to buy back any surplus power generated in sunny periods for the same price at which they sold power when it's dark.

* Sources: Energy Efficiency and Conservation Authority; East Harbour Management Services; Living Energy.