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New Zealand's use of coal for electricity generation surges

Jun 11, 2021

New Zealand has significantly increased its use of coal in recent years, despite its status as the worst, most polluting fossil fuel on the planet.

In the first three months of this year, the same amount of coal was used to generate electricity as in all of 2016 and 2017 combined. Coal generated 10.35 petajoules from January to March, slightly under the 10.52 petajoules in all of 2016 and 2017, according to MBIE's Quarterly Energy Statistics, released yesterday.

Climate campaigners say it's ridiculous that we're still burning the worst, most-polluting fossil fuel at such scale, and harshly contrast with comments made just this week by the prime minister - that climate action was life or death.

"The issues that have been going on - low hydro-lakes, but also lots of outages and lack of reliability at the gas fields - [mean] we've been burning coal as a back up fuel," Greenpeace head of campaigns Amanda Larsson said.

"But we wouldn't have to be burning coal if there had been good investment in wind and solar in the last decade, and there just hasn't been."

It's not as though coal makes up a tiny proportion of our electricity use. In 2020 coal produced 19.4 petajoules (PJ) of electricity - enough to power more than 350,000 homes for a year, according to an Australian government metric.

Coal emits about 30 percent more carbon dioxide than the next worst fossil fuels, diesel and petrol.

Yesterday Energy Minister Megan Woods said New Zealand's reliance on fossil fuels for electricity generation during dry hydrological years like the one we are currently experiencing is precisely why the government is investigating a solution through the NZ Battery project.

"Being able to store more renewable energy like wind and solar is key to a low-emissions electricity system, would encourage even more investment in renewables, and provide more opportunities for the transport and industrial sectors to switch to cleaner energy use."

In a recent speech to Contact Energy stakeholders, Woods said the New Zealand Battery project has been set up to address the lack of dry year storage in NZ's electricity system.

She said the $30 million initial study will investigate pumped hydro against other technological possibilities to eliminate the need for fossil fuels in our electricity system.

"It will provide comprehensive advice on the technical, environmental and commercial feasibility of a grid-level, renewable energy storage solution."

The first phase of the project is on track to report back in late 2021, with the second phase to be completed in late 2023 or early 2024 Woods said.

But others say coal is practical and its inevitable we'll use it for decades to come.

Westland Mayor Bruce Smith doesn't see coal going anywhere any time soon.

"It's easy to talk about renewable energy but at the end of the day we can't govern the level of the lakes. There's a degree of common sense, a practical aspect that needs to be looked at. It's simply that the best form of heating that we've got at the moment and the best form of energy is coal, and I don't see that changing," Smith said.

Cindy Baxter of the Coal Action Network said profit-driven retail electricity companies, of which the government owns just over 50 percent, would use whatever fuel was needed, and economics - not the environment - was the major factor.

"It really points to the way our electricity system is set up whereby the electricity retailers profit from coal being burned.

"So until we actually change that electricity system to encourage the use of renewables this is going to continue," Baxter said. She said the more profitable the companies were, the more money they return to their shareholders, including the government.

Genesis Energy had planned to close the coal boilers at its Huntly Power Station in 2018, but is still using them.

To March this year, 44 percent of Genesis' total electricity generation came from coal. Of 1959 GWh total power generated, 868 GWh was generated by coal. More coal was burned in the March quarter than each of the years 2016, 2017, and 2018.

Genesis said it has signed short-term agreements to reduce coal use this winter.

A spokesperson said over the last few months near-record low lake levels and a tight supply of gas had created very difficult market conditions. "While tight gas supply may continue for some time, Genesis has worked hard throughout to source gas to support electricity generation at Huntly and recently confirmed two short-term agreements as we head into the peak demand period of winter."

Larsson said dry summers would not be as much of a problem if we had invested better.

"During some of the driest, sunniest summers, we have been burning coal in the middle of the day when we could have been capturing so much solar energy," Larsson said.

Smith wants more electricity generation from rivers.

"We have 206 rivers on the West Coast. I can't believe that run-of-the-river hydro is not an absolute priority. From a common sense point of view ... the Cropp River gets 12 metres a year. Surely you'd harness it, put it through a turbine, and then it go to the sea."

Baxter said the recent Canterbury floods - preceeded by long, broad droughts nationwide - illustrate why we must sharply limit our emissions.

"How many times are the farmers going cap-in-hand to the government to get payouts for droughts or floods or storm events. And this is only just over one degree of warming - you double that, and the economic carnage that will be caused by the impacts of climate change don't bear thinking about."

By the end of this year the government has to release an emissions reduction plan for the following four years.

This week Prime Minister Jacinda Ardern said acting on climate change is life and death, and not a choice, but an imperative.

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