International Energy Agency

The International Energy Agency's proposals for global action, and how New Zealand fits into this picture

In 2015 the IEA produced its World Energy Outlook Special Report 1, Energy and Climate Change.

The IEA's mandate is to promote reliable, affordable and clean energy for its 29 member countries (which include New Zealand), and globally. It prepared this report to assess what actions could be carried out for the world to meet a climate change goal of stabilising global average temperatures at +2C.

Top of the list of strategic advisers for this report is former NZ Climate Change Minister, Hon Tim Groser (now NZ Ambassador in Washington DC). Also acknowledged is Simon Upton, a former NZ Minister for the Environment, and for many years now with the OECD in Paris.

The "Bridge Scenario" outlined in this report proposes a goal of energy-related GHG emissions peaking by 2020. Here's what New Zealand is doing as part of the following five key proposed areas of action:

1. Increasing energy efficiency in industry, buildings and transport

New Zealand is active in this area, including new policy 2 announced by Transport Minister Hon Simon Bridges to promote the uptake of electric vehicles in New3 Zealand, to reach a target of 64,000 units by 2021. This is a challenge because consumers will have to be satisfied that the batteries last several years, and that recharging facilities are available for long journeys. Neither is the case at present; however, they may well be in the near future. Also unknown is how the Government would regulate against petrol and diesel-driven vehicles, as opposed to regulating in favour of EVs, such as a temporary exemption to road user charges. Click here for more information about EVs.

Other actions being promoted by the Energy Efficiency and Conservation Authority 3 include: increasing economic productivity; reducing energy demand; reducing energy costs to consumers; reducing GHG emissions from energy; and promoting warmer and more energy-efficient homes.

Industrial and commercial coal users in New Zealand are working with CRL energy to improve the efficiency of coal-fired boilers, in particular, smaller boilers. This leads to less coal used for the equivalent amount of energy delivered, and reduced CO2 emissions. Where practicable, smaller operators are switching to biomass, including schools in Southland4 

The Ministry of Business, Innovation and Employment is reviewing 5 the New Zealand Energy Efficiency and Conservation Strategy.

2. Phasing out the least-efficient coal-fired power plants

While Huntly has downsized its use of coal for generating electricity, some residual capacity will be needed in either coal or gas to manage supply risks. Huntly is New Zealand's only coal-fired plant.

As older coal-fired plants are decommissioned, and new ones are built around the world, an increase in coal-fired plant efficiency is occurring as a matter of course. An important enabler for this trend is to reject calls to divest from fossil fuels. Improving the energy efficiency of coal-fired power stations built in developing countries will require more investment, not less.

3. Boosting investment in renewable electricity generation from $270bn in 2014 to $400bn in 2030

New Zealand has a renewable electricity generation target of 90% renewables by 2025, up from c.80% presently. The Business NZ Energy Council (BEC) is providing leadership in this discussion for renewable energy generally. Click here for more information about BEC.

Globally, the potential for renewable electricity generation is highly variable. China is a leader in this area, with 145 gigawatts of wind power installed, although not all of this is connected as yet to the grid. (China has a backlog in constructing suitable transmission lines.) A new report 6 in Nature Energy suggests that China could generate ¼ of its electricity from wind by 2030. If so, this would be a major development, although will not do much to reduce China's dependence on coal, at least in the medium term.

4. Phase out fossil fuel subsidies to end-users by 2030

Fossil fuel subsidies 7 - close to $US500 billion a year worldwide - are driving more use of fossil fuels than would otherwise be the case. An example is State-subsidised petrol for motor vehicles, or for the discovery and development of petroleum, e.g., in Asia, Russia, Norway, Canada. Subsidy reform could provide more than 10% of the global abatement needed to meet internationally agreed climate change targets. 

New Zealand led a group of eight country members of the UN Framework Convention on Climate Change, the "Friends of Fossil Fuel Subsidy Reform8, in calling for a removal of subsidies 9.

New Zealand does not subsidise fossil fuels, and, like many developed countries, places heavy taxes on the use of petrol and diesel in motor vehicles.

5. Reduce methane emissions in oil and gas production

This topic has become a focus of interest for the global petroleum production industry, an acute issue in areas where there are many wells, and where wells are poorly maintained. This is not a significant issue in New Zealand. Worldwide, leading petroleum producers are monitoring and reducing fugitive methane emissions where practicable. This is relatively low-cost abatement, or "low-hanging fruit".

References

  1. https://www.iea.org/publications/freepublications/publication/WEO2015SpecialReportonEnergyandClimateChange.pdf
  2. http://www.transport.govt.nz/ourwork/climatechange/electric-vehicles
  3. https://www.eeca.govt.nz/ 
  4. http://www.stuff.co.nz/southland-times/news/82342796/southland-urged-to-switch-to-wood-boilers-for-lowercarbon-future
  5. http://www.mbie.govt.nz/info-services/sectors-industries/energy/energy-strategies/documents-image-library/NZEECS.pdf
  6. https://www.theguardian.com/environment/2016/jun/20/china-to-generate-a-quarter-of-electricity-from-wind-power-by-2030 
  7. https://www.iisd.org/GSI/fossil-fuel-subsidies/fossil-fuels-what-cost
  8. https://www.mfat.govt.nz/en/environment/clean-energy-and-fossil-fuels/
  9. https://www.iisd.org/sites/default/files/publications/FFSR_Communique_17_4_2015.pdf