Wind and Hydro Energy in New Zealand
New Zealand’s Current Energy State
1. Energy Transformation
Electricity transformation is the conversion of one form of energy to another. In New Zealand, this largely refers to energy generated for electricity generation. 43,138 GWh of electricity was generated in 2011, of which 77% came from renewable sources. The main source of electricity generation in New Zealand is hydro, accounting for 58% of electricity generation. This is followed by gas at 18%, geothermal at 13%, wind at 4% and the remaining 7% coming from coal, wood, biogas, oil and waste heat. Of these sources, wind has shown a significant increase in electricity generation, increasing by 19% from its 2010 levels by 2011. Electricity generation from wind energy has now become paralleled to levels generated by coal.
2. Non-energy Use
Non-energy use is the use of fuels to produce non-energy products. One third of non-energy use in New Zealand is oil, and two thirds natural gas. Total non-energy use in 2011 was 36 PJ. Urea production comprises a key part of natural gas consumption, as it is used for nitrogen fertilizer amongst New Zealand’s proportionately large agricultural industry. The largest methanol consumer is the plastic industry. Therefore most natural gas non-energy use is that consumed by the industrial sector.
3. Consumer Energy Demand
Total consumer energy (TCE) is energy used by final consumers. Therefore this is exclusive of energy used for energy transformation and non-energy use. TCE typically increases over time, as a function of population amongst other factors. Oil was the largest component of New Zealand’s TCE in 2011, comprising 46% of energy consumption in this category. The primary purpose of this is for transport, with other key sectors being agriculture, forestry and fishing. Electricity was the second largest contribution to TCE in 2011, accounting for 26% of consumption. Remember that the largest source of electricity generation is hydro (77%).
Oil Resources in New Zealand
New Zealand is heavily dependant on hydro energy to provide the country with electricity. However, there are downfalls to hydro energy, many of which will be explained in later sections. One of these downfalls is that it is dependant on a level of water supply. This supply is not always met, and in the drier years where hydro electricity has been incapable of fulfilling its quota, fossil fuels have been used to generate electricity as a back up. Currently, more attention is being focused on the potential of fossil fuels for exploitation as one of New Zealand's natural resources. This section discusses the current stages of this development.
At the 2010 climate summit in Cancun, Nick Smith (Environment Minister at the time) stated that “it is ironic that while we try and design pricing instruments to recognise the environmental cost of emissions, the world spends hundreds of billions of dollars a year subsidising fossil fuels and pollution. If we are serious about addressing climate change in the most efficient way, we need to be discussing a phase out of such support.” However, the New Zealand government has shown support for the exploitation of New Zealand’s fossil fuel resources, and is prepared to provide financial incentives to aid in oil exploration. In 2010, former Energy Minister Gerry Brownlee made this clear: For far too long, New Zealand has not taken advantage of the wealth hidden in our hills, in our oceans, and in the ground…”
In 2009, the New Zealand Government launched the Petroleum Action Plan (Ministry of Busineness, Innovation and Employment, 2012). The purpose of this plan is to “maximise the gains from the responsible development of our oil and gas resources”. A component of this plan is to “develop a coordinated investment strategy to improve knowledge of New Zealand’s petroleum resources” (Ministry of Business, Innovation & Employment, 2013). Put simply, the New Zealand Government is subsidizing the exploration of fossil fuel resources in New Zealand. Additionally, the relevant legislative framework will be reviewed and amended if necessary. The Crown Minerals Act in particular is placed under the scope of this review.
The Ministry for Business, Innovation and Employment (2012), acknowledges the imminence of peak oil but claims that known reserves of natural gas liquids and unconventional oil are still adequate enough to keep total oil production rising for several decades. Admittedly, it is difficult to figure out exactly how large the remaining oil reserves amount to; nevertheless the government claims to “take(s) the issue of peak oil seriously”.
While it is acknowledged that oil consumption is predominantly a consumer energy, while wind and hydro energy are energy transformations, the climatic impacts of fossil fuel consumption may also have impacts on the hydrology and wind regime in New Zealand. Additionally, fossil fuels are generally the back up option for electricity generation when water supplies are insufficient to produce adequate amounts hydro electricity. Thus the relationship between fossil fuel development and alternative sources for energy transformations in New Zealand is a relevant one.
Negative Impacts from Subsidising Fossil Fuels
In 2011, global subsidies for energy were roughly 480 billion US dollars in direct monetary terms with subsidies for oil being two-thirds of the total cost (International Monetary Fund, 2013). Once the externalities of the subsidies have been taken into account the total cost of the subsidy programme is greater than 1.9 trillion US dollars which is around 2.5 per cent of global GDP (International Monetary Fund, 2013). It is estimated that dissolving these subsidies would cause global carbon dioxide emissions to decrease by 13 per cent (International Monetary Fund, 2013). This decrease would come from an increased investment into renewable energy sources and also from a decrease in energy demands as the price of energy would increase (International Monetary Fund, 2013).
When governments subsidize fossil fuelled energy they reduce incentives for investment into renewable energy and increase the incentives for investment in non-renewable energy sources (International Monetary Fund, 2013). This results in the inefficient allocation of resources in the economy and social welfare is not maximised making this sort of subsidy economically inefficient. The subsidies directly support the increased rate of depletion of natural resources, thus proving a short term solution in spite of the recognized peak oil crisis (International Monetary Fund, 2013).
By subsidising energy consumers are not aware of the true cost of energy so they make socially inefficient decisions. Removing the subsidies realigns consumers with the true cost of energy therefore making their choices socially efficient. There have been calls to increase energy prices from non-renewable sources above their market levels to account for the negative externalities that fossil fuels cause (International Monetary Fund, 2013). This would make decisions made by the consumer on their energy consumption socially optimal as negative environmental consequences would be taken into account. The environmental externalities include pollution, congestion and a decrease in public health (International Monetary Fund, 2013).
As governments go down the path of subsidising fossil fuels they get caught up in a catch twenty two situation. On the one hand they can keep the subsidies and incur the costs outlined previously, and on the other they can remove the subsidies and cause an immediate reduction in productivity (International Monetary Fund, 2013). By subsidising energy governments are promoting capital intensive industry (International Monetary Fund, 2013). This is because a major input into physical capital is energy. So by making an input cheaper they have made capital industry more productive. If the government was then to remove the subsidy it will result in the immediate decrease in productivity which would most likely result in a decrease in the wage rate and an increase in unemployment in the short term (International Monetary Fund, 2013). A policy change such as this would be highly unpopular to the general public. This highlights why the removal of subsidies is difficult even though the long run benefits are clear. The best solution to these problems is to not start subsidising fossil fuels in the first place (International Monetary Fund, 2013).
Climate change is a broad concept, consisting of many phenomena of which there are generally undesirable changes in some environmental quality as a result of anthropogenic activity. It is these changes that give us some indication of the required management responses, largely in regards to how we harness energy and what sources we choose to harvest this energy from. In this section the projected changes for a number of environmental qualities related to climate change are discussed.
The International Panel for Climate Change’s (IPCC) Special Report in Emissions Scenarios (SRES) simulates a number of scenarios for the future of greenhouse gas emissions across the globe. These scenarios are defined by a combination of population growth, economic growth and international convergence of income and way of life scenarios. According to the Ministry for the Environment’s report on climate change (2008), the “projected New Zealand temperature changes are in all cases smaller than the globally averaged changes for the corresponding SRES scenarios”.
The implications these scenarios have for rainfall are displayed in the image below. Temperature change occurs most prominently in the North Island and the top of the South Island. If such scenarios were to occur, rainfall increases would occur by in large on the west coast of the South Island, while reductions would occur to the north and on the East Coast. Additionally, climate model simulations suggest that an increase in the frequency of extreme rainfall events is also likely for New Zealand. NIWA regional models support this outcome, where extremes with return periods of 30 years and longer showed increased rainfall depth of approximately 8% per 1⁰C of local warming. This is consistent with an increase in the air’s water holding capacity of 8% of 1⁰C.
Sea level rise in New Zealand has been similar to the global average of around 1.8mm/year throughout the 1900s. From this similarity it is thought that projected sea level rises in New Zealand are likely to be similar to the global projections from the IPCC Fourth Assessment, 2007. Globally, sea level rises are projected to rise by at least 18 to 59cm by the 2090s from the 1990s. It is possible that a further 10 to 20cm rise will occur of melt rates in Antarctica and Greenland accelerate linearly with future temperature increase. It is important to note that the upper level of 59cm is by no means a limit, as the IPCC projections do not factor in the feedback effects from the carbon cycle, such as an increase in forced heating from evaporated atmospheric water vapour.
Predicting the future of wind regimes in New Zealand is a difficult task, and most sources which provide projections for this area of climate change note that there is still a significant degree of uncertainty. The Climate Change Effects and Impacts Assessment (Ministry for the Environment, 2008) states that the mean westerly flow is likely to increase in the spring by about 10% by 2040 and 20% by 2090. Winter increases in mean westerly flow are expected to be even greater. Contrary to winter and spring, summer and autumn westerly flows are expected to decrease by around 5 to 20%, from the average of all models and SRES scenarios. Overall, there would be greater annual variability in wind flow.
Mitigating Climate Change
One of the main drivers behind promoting renewable energies is not the fact that non-renewable energy sources are running out, but because environmental degradation is becoming a major problem, resulting in issues such as global warming. It has been estimated that to limit global warming to just 2 degrees Celsius there is a required investment of 500 billion US dollars annually by 2020 (Liebreich et al. 2009). This figure arises from an IPCC report which states that by 2030 we need to reduce greenhouse gas emissions by 60 percent in order to keep global warming to 2 degrees Celsius (Liebreich et al. 2009). To accomplish this via the way in which we produce our energy Liebrich et al. (2009) have estimated that the global annual investment in renewable energies must be 1 percent of global GDP or 500 US billion by 2020. Therefore the world not only needs to increase its energy production due to ever increasing demand but also decrease the use of our main energy source fossil fuels. Investment in renewable energies in 2012 was 244 billion US dollars globally (United Nations Environment Programme, 2013). That leaves roughly a 250 billion dollar investment funding gap. If the money that is used in energy subsidies which in 2010 was 409 billion then the investment needed would exceed the requirements (Eaton, 2012). This would give a total of 659 billion dollars in annual investment which would be enough to satisfy new energy demands whilst substituting out the necessary fossil fuelled energy production.
Wind energy provides many benefits such as it saves money - more and more studies have confirmed that wind power will save consumers money, it is clean electricity - widespread wind development addresses climate change by providing a non-polluting source of energy that can displace greenhouse gas emissions from conventional power, it creates energy independence - wind generation promotes national security by reducing our reliance on foreign and volatile sources of fossil fuels and it is considered a new crop - wind farms can help “save the family farm” by allowing traditional land use revenues to be supplemented by new revenue streams afforded by land leasing agreements. Also, wind farms substantially broaden the tax base in rural communities. Wind power has established itself as a mainstream electricity source globally, and plays a central role in an increasing number of countries immediate and longer term energy plans. China has been the main driver of growth in the industry for the past 5 years, however the kick start to significant growth in the Chinese market is not expected until after 2015 (Global Wind Energy Outlook, 2012).
Conserves Water and Keeps it clean: When operating, turbines create little to no particulate emissions that can be instrumental in degredation of lakes and stream and stream quality such as mercury contamination.
Clean Air: Unlike wind turbines, other forms of energy generation bear emmissions that are detrimental to the environment, contributing to things such as acid rain and most importantly, climate change.
Negligible Greenhouse Gases: For the more common sources of power, coal and natural gas, create large quantities of greenhouse gases being emitted into the earth’s atmosphere (most notably coal).
Mining & Transportation: Unlike the destruction involved in things such as resource mining or fuel transportation, the harvesting of wind preserves the earths natural resources.
Land Preservation: The placement of wind farms can sometimes be largely spaced out in terms of geographic area, however the “footprint” that is actually left behind covers only a small portion of surface ground. Thus, minimal impact on the land itself, crop production or livestock grazing will be experienced.
Revitalizes rural economies: Through the use of wind turbines, rural and local economies can become diversified, increasing the tax base and supplying new types of income. Wind turbines provide additional sources of property taxes in rural areas which would usually have a difficult time attracting fresh sources of income. For example in the southwest of Minnesota, each 100 MW of wind turbine development has gained around USD$1 million in property tax revenue annually and around $250,000 per annum in lease payments to property owners (Windustry, 2012).
Free Fuel: Contrary to other forms of power generation where fuel is most often shipped to a processing plant, energy derived through wind turbines generates electricity at the source of fuel which is green and even better, it is free.
Price stability: Fossil fuel prices have the potential to significantly fluctuate in price and this can be mainly attributed to variations in mining and transport costs. Wind turbines therefore act as a buffer in terms of costs as the price of fuel is secure and free.
Creates Jobs: Projects that involve wind energy and turbines have the potential to create huge job opportunities, both short and long term. Employment opprotunities include specialty fields from meterologists and surveryors to structural engineers, lawyers, financial consultants and technicians. It has been suggested that wind energy creates up to 30% additional jobs than a coal plant would produce, and nearly 66% more than that of a nuclear plant per unit of energy converted (Windustry, 2012).
National Security/Energy Independence: Through diversification of portfolios, nations have the ability to create huge reductions in their dependence on foreign fossil fuels. A new crop: wind turbines can be placed amongst cropland without interference with people, stock and other types of production. Local Ownership: A substantial addition to the global energy grid can be made by small groups of turbines or even single turbines which are operated, by local landowners and communities. The development of local electricity results in less imported fuels from other areas whether it be at the state, regional, or national level. It always means that money earned through energy generation is pumped back into local economies.
The cost of turbines is decreasing (largely the result of market forces but at the same time, continuous design refinements and mass production have decreased the cost of the technology itself. Commodity prices (contributed to the decrease in prices – however highly susceptible to price spikes). Regardless, growth of the power industry is attracting increased investment (50.7 billion euros in new wind power equipment in 2011) (Windustry, 2012)
Carbon Dioxide Savings
Wind power provides many benefits including the reduction of carbon dioxide emissions from the power sector (single largest anthropogenic contributor to the global climate change problem), all CO2 emissions related manufacturing, installation, servicing and decommissioning of a turbine are generally ‘paid back’ after the first 3-9 months, annual reductions in CO2 from exisiting wind power plants were around 350 million tonnes in 2011 - this is expected to rise 863 million tonnes annually by 2020, 1447 tonnes per year by 2030 (GWEC, 2012)
Wind Energy in New Zealand
Tararua Wind Farms
The Tararua Ranges run down the center of the lower North Island and are well known among recreationists for having constant and strong winds. This is because the mountain range funnels the prevalent westerly air flow resulting in an average wind speed of 10 meters per second or 36 kilometers per hour. This makes the Tararua Ranges a perfect site for generating wind energy. The Tararua Ranges are considered to be one of the best areas in the world for wind generation and is home to the two largest wind farms in the southern hemisphere. As an example of their efficiency the two wind farms produce electricity equivalent to 4,000 operating hours at maximum capacity per year whereas wind farms in Scotland, Whales and Ireland have outputs around 3,000 hours and Germany has even less at 2,000 hours per year (Te Ara, 2013). The Tararua wind farms operate at 46 percent of their capacity, the global average in roughly 30 percent making these wind farms 16 percent more efficient than the average wind farm (New Zealand Wind Energy Association, 2013). These two wind farms satisfy the demand of roughly 75,000 homes. (Te Ara, 2013). If this electricity demand was produced using fossil fuels it would add an extra 11.2 tonnes of carbon dioxide emissions per household annually or a total of 846,000 tonnes annually for the 75,000 homes (U.S. Energy Information Administration, 2013), (NZ Home Energy, 2013). It is figures such as these which highlight how effective wind farms are at mitigating climate change.
Tararua Wind Farm. (Source: New Zealand Wind Energy Association, 2013)
Negative Effects from Wind Farms
Wind turbines can have detrimental effects on wildlife such as birds and bats which can collide with the tall towers and rotating blades (Intergovernmental Panel on Climate change, 2012). As bird and bat populations throughout the world are in general decline adding another factor which may further this decline is unfavourable in the public eye (Intergovernmental Panel on Climate change, 2012). The Department of Conservation (DOC) have found that turbines have a relatively benign effect on avian populations with relatively few birds being killed when they looked at the effect wind farms have on New Zealand bird populations (Powlesland, 2009). DOC also found that wind farms have a greater effect when there is a mass movement of birds such as during migration, however this effect is still minor (Powlesland, 2009). It is a general consensus that more research needs to be done in this field especially the effect of offshore wind turbines have on seabirds (Intergovernmental Panel on Climate change, 2012). Mitigation for these effects are to locate wind farms in areas that are known to have low bird and bat populations (Intergovernmental Panel on Climate change, 2012).
The habitat in which the wind farm is installed can also be adversely affected whether it is land or marine based (Intergovernmental Panel on Climate change, 2012). These effects however, are relatively minor as wind farms are often installed in agricultural land in which case the environment is already heavily modified (Intergovernmental Panel on Climate change, 2012). Habitat destruction can be large if the wind farm is built on previously unmodified land (Intergovernmental Panel on Climate change, 2012). The negative impacts arise due to forest clearing for roads and turbine foundations (Intergovernmental Panel on Climate change, 2012). This causes fragmentation of the environment limiting habitats for certain species (Intergovernmental Panel on Climate change, 2012). Issues for the marine habitat are underwater vibrations, electromagnetic fields, physical disruption and the introduction of invasive species (Intergovernmental Panel on Climate change, 2012). Doc has stated the habitat loss as a result of the construction of wind farms has a minor effect on bird populations (Powlesland, 2009). This is mainly due to the fact that only 2-5 percent of the wind farm area is taken up by buildings, roads or the turbines themselves (Powlesland, 2009). Doc view the biggest effect on birdlife may come as a result of increased disturbance and noise due to the motion of the turbines and the increased human activity (Powlesland, 2009). New Zealand along with other countries have zoned off highly sensitive areas so they cannot be disturbed from the establishment of offshore wind farms (Intergovernmental Panel on Climate change, 2012), (Powlesland, 2009). DOC believes that every site has to be looked at on a case by case basis as the effect of the wind farm is largely dependent on the species that are found there (Powlesland, 2009).
The greatest opposition to wind from the human population comes from a decrease in aesthetic values as people perceive windmills to be unattractive (Intergovernmental Panel on Climate change, 2012). Windmills are more efficient at higher elevations and with a bigger blade span which unfortunately makes them very visible structures (current turbines are 125m high and projected to get taller) (Intergovernmental Panel on Climate change, 2012). Allco applied for resource consent in 2007 to build a large wind farm in the Taraua Ranges (New Zealand Wind Energy Association, 2013). The proposal was initially declined due to the visual effects the wind farm would have. In response to this Allco removed 14 of the most visual turbines to mitigate the visual effects (New Zealand Wind Energy Association, 2013). The Wind farm was then approved at a smaller scale (New Zealand Wind Energy Association, 2013). This is just one example where an agreement can be reached and the negative effects of wind farms can be mitigated.
Noise from turbines is another issue residents living near wind farms have a problem with (Intergovernmental Panel on Climate change, 2012). Although the sound emitted by windmills is not loud enough to cause any permanent hearing damage it has been found to interfere with sleeping patterns and annoy those living nearby (Intergovernmental Panel on Climate change, 2012). New Zealand has strict noise related consents which wind farm operators must comply with in order to build and run a wind farm (New Zealand Wind Energy Association, 2013). The consent requires the noise from wind farms not to exceed background noise by 5 decibels (New Zealand Wind Energy Association, 2013). Noise from wind farms is not a big issue in New Zealand due to the consent process and that fact that wind farms here are built in areas with low population (New Zealand Wind Energy Association, 2013).
Through the use of hydroelectricity, the Earths water cycle can be utilized as a renewable energy resource in order to generate electricity. As water flows downstream, kinetic energy is created that in turn can be converted into electricity. Hydroelectric power plants convert this kinetic energy into electricity by forcing water, usually held by a dam, through a hydraulic turbine, which is connected to a generator. When the water exits the turbine, it is then returned to the stream or riverbed below the dam. Hydropower is highly dependent on 2 main factors: precipitation and elevation. To generate enough energy, high precipitation levels and large elevation changes are needed and have the ability to produce significant quantities of potential electricity. As of 2012, an estimated 20% of the worlds electricity was produced by hydropower, supplying nearly 1 billion people with energy (GWEC, 2012). According to the 2013 Key World Energy Statistics, top producers of hydroelectricity include the People Republic of China generating around 699 TWh, 19.6% of the world total. China is followed closely by Brazil at 428 TWh, Canada at 376 TWh and the United States at 345 TWh (IEA, 2013).
History of Hydropower
Humans have been utilizing the power of moving water for generations, initially for purposes such as crushing grain and sawing wood. They have been using this power to produce power to generate electricity since the 19th century, at the very start of the electric age (WREC/WREN, 2013). In New York for example, Niagara Falls embarked on powering the cities street lights with hydroelectricity in 1881. The subsequent year, the worlds first ever hydroelectric power plant was opened in Appleton, Wisconsin. Hydroelectricity was somewhat limited up until 1893, when the development of effective tranmission technology officially occurred.
Advantages of Hydropower
Hydropower relies on the water cycle which is driven by the sun, therefore it is considered a renewable power source. Unlike other sources of energy generation, hydroelectricity does not actually "use" the water and instead, returns the water back to its source of origin. Once the power plant is in place, creates very little waste byproducts in their conversion. As hydropower is fueled by water, it is therefore an environmentally clean fuel source. As power plants such as coal and natural gas burn fossil fuels, hydropower acts as a more environmentally friendly power source as it doesn’t pollute the air (Dam systems do not produce green house gases).
As the flow of water can be controlled that runs through the turbines, electricity can be produced on demand making it available only for when it is needed (electricity can be saved for when demand is high). Electricity can be generated 24/7 indefinitely, that is supposing that the water supply remains plentiful (does not run dry). Dams are designed to last for decades and therefore can contribute to energy generation well into the future.
Hydroelectricity promotes guaranteed energy and price stability – as river water is considered a domestic resource which, unlike fuel or natural gas, is not associated to fluctuations in the market. Additionally, it is the only sizeable renewable electricity source and its cost-benefit ratio, efficiency, flexibility and reliability aid in getting optimal results from thermal power plants (IEA, 2013)
Hydroelectricity increases the stability and reliability of electricity systems – as the operation of electricity generators remains contingent on immediate and versatile generation sources to meet peak demands, maintain voltage levels, and quickly re-establish supply after blackouts. Energy which is generated through hydroelectric systems can be fed into electricity networks rapidly than that of other energy sources. In terms of capacity, hydropower can reach its maximum potential from zero in an extremely efficient manner making them a some what unparalleled source of energy supporting the balance between the supply and demand of electricity.
Disadvantages of Hydropower
Despite the lack of air quality impacts, the construction and operation of hydropower dams not only have the potential to significantly alter natural river systems, but also have the ability to significantly affect local biodiversity such as fish and wildlife populations. Understanding ecosystem and habitats issues are extremely important, however understanding such issues are difficult as no two hydroelectric projects are exactly the same (for example scale, location and climatic conditions). Thus, while issues can be examined and addressed, conclusions cannot be drawn that all projects have similar negative environmental impacts (FWEE, 2013). Ecosystem impacts caused through a single hydropower project depend to a large extent on 1) size and flow rate of the river or tributary where the project is located 2) the climatic and habitat conditions, 3) the type, size, design and operation of the project and 4) cumulative impacts of upstream land/river uses (FWEE, 2013).
Supersaturation is when air becomes trapped in water when it spills over the dam and hits the pool of water below, in turn creating turbulence. As air is made up of 78% nitrogen, dissolved nitrogen in the water has the potential to increase considerably (FWEE, 2013) . This increase in excess nitrogen is not easily lost, causing detrimental effects to fish and other aquatic species. When fish travel from a supersaturated nitrogen area of water to an area of lower pressure, a condition similar to ‘the bends” occurs where dissolved gas comes out of solution inside the body during depressurization.
Reservoirs are made when storage projects such a dams are built. These can significantly affect the rate at which water travels downstream and as a result, flow levels slow substantially. Slow moving water means that surface temperatures will tend to increase as the slower moving or “slack” water will absorb more energy from the sun.
Water levels can be significantly effected through the building of a storage project such as a hydrodam, raising the level behind the dam up to several hundred feet. When the water levels rise, stream banks and riparian boarders can become covered, resulting in inundation. As this will change the habitat conditions of the area, this in turn will effect local biodiveristy through a different set of dynamics emerging. This will impact species traditional roles in the envrionment, such as growth, nesting, feeding and spawning. Another issue that arises through increased water levels is the fact that when water is dammed and released at different times of the day (change in demand or 'power peaking'). As a result, the riparian zone (the area in which plants grow next to a body of water) can be disturbed meaning that shoreline vegetation may not be fully reestablished.
The costs of generating hydropower is nearly entirely dependent on the construction of the dam and the power plant itself. Therefore costs will differ depending on one of the main variables being the size of the plant. Once the dam has been built, costs are predominantly limited to the maintenance of the dam equipment, with limited costs for fuel and transportation. Therefore operating expenses of hydroelectric plants are considerably lower than those of other conventional power plants. With sufficient flow to run the turbines, electricity can be generated at an extremely low cost. In general, the bigger the hydroelectric plant, the cheaper it will cost per kilowatt to produce the electricity. In contrast to even mature nuclear plants, hydropower as a whole costs less than half the amount to produce, at around under USD 0.9 cents per kilowatt-hour (kWh) (Combs, 2008). In terms of production costs, it runs about one third of the price for fossil-fueled production (coal or oil), and is nearly one fourth less than the cost of gas turbine electricity production (IEA, 2005).
Subsidies and Taxes
Despite the unstable world economy, global renewable energy continues to expand. Governments play a crucial role in deterring carbon emissions through enforcing taxes and penalties such as carbon tax and pricing, cap and trade schemes and public investment, loans and grants in renewable energy production. As hydropower is regarded a mature technology, it is often not included in discussions and incentive initiatives for renewable energy. Despite this, energy tax credits for renewable energies are obtainable for hydroelectric power production, and federal possession of dams allows governments to set subsidized prices for the electricity in which they produce.
Hydroelectric Power in New Zealand
Hydroelectricity has been a significant source of energy in New Zealand from the early 20th Century. Hydropower is a key part of New Zealand’s electricity source as it is well suited to support other forms of renewable power generation and the hydro schemes are designed to meet environmental expectations of communities whilst managing inconsistent inflow and restricted storage. New Zealand currently generates more than 50% of its electricity through hydro generation (EECA, 2013). New Zealand’s electricity is generated from many sources. Hydropower is the main source of energy as it is a renewable energy source that is mostly unaffected by the increasing costs of fossil fuels; hydroelectricity in New Zealand is however dependent on the storage levels in lakes (Statistics New Zealand, 2013). Many of the largest dams and reservoirs in New Zealand were developed to produce hydroelectricity. Most of the electricity generated is from large hydro dams such as Benmore, Manapouri and Clyde however there is potential for small scale hydro developments to be enhanced and increase efficiency and size to increase output (EECA, 2013). Electricity generation has risen 42% (an annual growth rate of 1.8%) over the past two decades (from March 1987 to 2007) (Statistics New Zealand, 2013). In this period the population and economy has grown by 21.6% and 61.2% respectively causing a growth in demand resulting in increasing dependence on other sources of energy to compensate for the insufficient hydro supply (Statistics New Zealand, 2013). This is due to the hydroelectricity supply being dependent on adequate levels of rain, snow melt, and water in storage lakes, dry seasons and periods where electricity is in high demand (Statistics New Zealand, 2013).
Hydroelectricity generation requires a constant, reliable and extensive water source accompanied by an altitude drop. In the South Island of New Zealand the terrain is mountainous or steep hill country providing altitude for water to speed down and drive the turbines to generate power. The temperate climate and high rainfall as well as the influence of the westerly weather systems, the ‘roaring forties’ that carry moist air over the ocean provide great conditions for high rainfall. The mountains in the middle of the North Island and the Southern Alps cause high rainfall by providing a barrier to the moist airstreams. These areas provide ideal catchments and run off for hydro stations.
Hydroelectricity is a renewable energy source that does not produce any harmful emissions into the environment but causes major changes to the landscape (Martin, 2013). From the 20th century the environmental impacts of energy generation were considered important. Hydroelectricity produces no CO2 and uses a renewable source (water). Further development of hydroelectricity was hindered in the early 2000s by the public concern about the negative environmental and social impacts on land, lakes, landowners and communities. New Zealand has reasonably small-capacity reservoirs up that store up for up to 60 days as there is also quite limited snow cover the fuel supply runs low if the rainfall is low (Jamieson 2005). A benefit of hydropower is the ability to use the water not only for power generation but it can be used for other purposes downstream. New Zealand has a dependable supply of inflows into hydro storage stations meaning our water resources are well suited to hydropower generation (Jamieson 2005).
In the second half of the 1920s increased availability of electricity and electrical uses led to the increase in demand meaning the existing supply was no longer enough (Martin, 2013). From the 1920s hydro generation became the dominant supplier of electricity. In 1990 hydro power provided 72.9% of electrical energy and by 2007 hydro generated 54.9% of the total electricity generated in New Zealand where the electricity generated by coal and gas increased. Hydroelectricity provided 82.5% of electricity generated from renewable sources (Martin, 2013).
Hydropower is an expensive alternative energy source. The facilities required are costly to construct and the environmental effects also difficult to moderate, stations then also require constant maintenance and operation(Jamieson, 2005). However once the power station is established the ‘fuel’ has no on-going costs contributing to providing energy at a stable long-term price (Jamieson 2005). Change in the electricity market structure, increased demand and the susceptibility to climatic conditions have an influence on electricity prices (Statistics New Zealand, 2013).
In 2004 a total of 2460 megawatts of hydroelectric capacity that had the potential to be developed that could add to the 5366 MW of existing hydro capacity and improve New Zealand’s renewable energy sources. Future hydro development is likely to be smaller by using canals that divert river water and determined by the river flow; the water would also be shared for irrigation and would be integrated with other demands for water. It has been thought that New Zealand’s large-scale hydro resources have been exhausted however concern over the impact of global climate change could lead to the reconsideration of this view because of the environmental benefits of hydroelectricity (Martin, 2013).
Hydro-stations in New Zealand
New Zealand’s largest man-made lake, Lake Benmore was developed behind the Benmore power station; this station alone is capable of generating 540 megawatts of energy (Meduna, 2013). Benmoe is New Zealand’s second largest hydroelectric station and is owned by Meridian Energy. The station is located in Otematata in the south Island and is the power source for the high voltage direct current link to the North Island (IPENZ, 2013). The Benmore dam is the largest earth dam in New Zealand the power station itself contributes around 220 GWh per year to either the South or North Island (IPENZ, 2013). The Benmore power station Benmore itself provides enough energy generation for around 298,000 average New Zealand homes (Meridian Energy, 2013)
Manapouri Underground Power Station
Manapouri power station is New Zealand’s largest hydroelectric power station and second largest power station; it is located underground beneath Fiordland, South Island, New Zealand (Meridian Energy (2013). The power station has seven 122 megawatt generating units and an operating maximum station output of 800 megawatts providing enough energy for about 619 000 average homes (Meridian Energy, 2013). The only above ground features of Manapouri power station are the control building, a switchyard and transmission lines that join to the national grid (Simpson, 2009). The Manapouri hydro scheme worked through diverting water from Lake Manapouri through an underground power station at the head of the lake, there is no major dam the water moves through a tunnelling system (Simpson, 2009). Once water has reached the power house it flows out and is discharged through a tunnel to the sea at the head of Doubtful sound (Simpson, 2009). Most of the electricity generated from Manapouri is used to supply the Tiwai Point aluminium smelter integrating the electro-industrial development in New Zealand (Fox, 2001).
Clyde Power Station
The Clyde power station is located on Lake Dunstan and is the largest concrete dam in New Zealand with a power station capable of producing 432 megawatts (MW) of power from its turbine generator units (Contact Energy, 2013). The Clyde power station provides enough power for both Christchurch and Dunedin the average annual energy generated by the power station is 2100 GWh its current capacity is 432MW and contains 4 fixed blade turbines connected to 108MW salient pole generators (ECNZ, 1992). The environmental impacts of the power station were reduced by Lake Dustan only operating in a narrowband as it does not have a large amount of storage capacity the Clyde Power Station only relies on the run of the river for power generation; the average flow past the dam each day reflects the natural flow of the rivers that feed into Lake Dunstan (ECNZ, 1992).
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