Next steps in New Zealand's energy transition

Next steps in New Zealand's energy transition

 

New Zealand is a leader in the integration of renewables in the electricity sector with around 80% and around 40% as a share of total energy. The BusinessNZ Energy Council (BEC) hosted an exclusive member-only round-table in Wellington, to explore implications of the Council’s World Energy Scenarios to 2060 report for the country.

 

Discussions focused on the question of potential next steps in New Zealand’s energy transition. New Zealand has a unique emissions profile. Agriculture, being approximately 50% of New Zealand’s GHG emissions, and transport, around 20%, are top of the agenda for New Zealand’s energy sector.

BEC has gained significant member value from the Council’s scenarios work drawing on them to develop its own two ground-breaking New Zealand unique scenarios – Kayak and Waka, having prepared two different and equally plausible scenarios of New Zealand’s energy future out to 2050.

Their purpose is to help us think about what our energy future might look like, and the range of trade-offs and choices that may be needed to be made along the way, as New Zealand faces rapidly changing patterns of energy use, emerging disruptive technologies and, above all, the challenge of living sustainably.

Update on key analysis behind the World Energy Scenarios

Given the importance of the Council’s scenarios work and the fact that BEC is looking to leverage off them in their next BEC2060 Scenarios work, Christoph Menzel, former Scenarios Manager at the Council, updated BEC on key analysis behind the Council’s scenarios.

The report presents three exploratory scenarios—Modern Jazz, Unfinished Symphony, and Hard Rock—that provide users with a common language for thinking and talking about current events.

These scenarios provide energy leaders with an open, transparent, and inclusive framework to think about a very uncertain future, and thus assist in the shaping of the choices they make.

John Carnegie, Energy Manager at (BEC) said: “Gaining access to Christoph while he was holidaying in New Zealand was too good an opportunity to miss. Christoph enriched the BECs understanding not only of the Council’s 2060 scenarios but also the value of scenarios in simplifying complexity and uncertainty in decision making processes. Economic resilience in the transition to a low emissions future point to a stronger focus on future trends in the energy sector. BEC is keen to continue to learn from the Council’s global network as it develops its new BEC scenarios.”

At the event Christoph shared key insights emerging from the World Energy Scenarios, particularly around the ‘hard rock’ scenario.  He also reinforced the value of scenario-thinking for future decision making in the energy sector.

With a longer-term planning horizon, decision makers can better understand where and when new developments may emerge, and better plan future investments and required steps for regulators in a fast-moving world.

New Zealand’s energy experts actively engaged in the key issues for New Zealand’s energy future in the light of the new Council’s scenarios, especially hard-rock. In Hard Rock, market structures and policy systems increasingly fragment and focus on local and national needs.

Diversifying local economies and adapting to a new world with high geopolitical tensions become the primary focus. Security drivers and power-balancing alliances dominate global cooperation.

Christoph Menzel said: “The geographic isolation of New Zealand and its strong dependency of international trade could be challenging in a Hard Rock scenario, where lower GDP growth and decreased trade activities are dominating.”