WIR SCHAFFEN WISSEN – HEUTE FÜR MORGEN

Bakytzhan Suleimenov, Tom Kober :: Laboratory for Energy System Analysis

New Zealand deep decarbonisation scenarios:

perspectives of geothermal power generation
ETSAP meeting, CSIRO, Newcastle, Australia, 9 December 2019
 New Zealand’s climate change programme
Leadership at home and
internationally
• Create an enduring domestic
institutional architecture
• Reduce our emissions out to
2050 and beyond
• Hold ourselves and other
countries to account to meet
international commitments, e.g.
Paris Agreement
• Secure a multilateral rules system
that delivers action with
environmental integrity by all
countries
• Stand with the Pacific to support
the region’s climate action and
resilience
• Invest in globally significant
research, strategic alliances and
capacity-building in developing
countries
• Place primary reliance on
domestic measures, while
retaining options for
international cooperation
A just and inclusive
society
• Consider the optimal speed and
pathways for transition
• Take early action where this
prevents greater costs in the long
run, also recognising the rights
and needs of future generations
and honouring existing Treaty
settlement commitments
• Support the transitional shift to
lower emissions and resilient
sectors, and recognise and
mitigate impacts on workers,
regions, iwi/Māori rights and
interests and wider communities
• Support those affected by climate
impacts to adjust
• Ensure information about climate
change and its impacts is robust
and accessible to aid decision-
making
• Ensure information about climate
change and its impacts is robust
and accessible to aid decision-
making
A productive,
sustainable and climate-
resilient economy
• Encourage innovation,
diversification and the uptake of
new technologies
• Seek to fully understand the
costs, benefits, risks and trade-
offs of policy levers across the
economy, society and
environment
• Identify the best-value
opportunities to reduce
emissions
• Increase our international
competitiveness by speeding up
the decoupling of emissions from
growth
• Drive behaviour change via a
range of policy tools, including
regulation, education, price-
based and support levers
• Proactively adapt to ongoing
climate change impacts and
invest to build resilience across
all hazards and risks
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 New Zealand emission reduction targets
• International targets
 5 per cent reduction below 1990 gross emissions for the period 2013-2020
 30 per cent reduction below 2005 (or 11 per cent below 1990) gross emissions
for the period 2021-2030.
• Domestic targets (Zero Carbon Amendment Bill) in force
from November 2019
 net zero emissions of all greenhouse gases other than biogenic methane by
2050
 24 to 47 per cent below 2017 biogenic methane emissions by 2050, including
10 per cent below 2017 biogenic methane emissions by 2030.

Page 3
Page 4
 New Zealand energy system
• Renewable energy was 39.6% of energy supply in 2017
• In 2017 the 4th highest renewable primary energy supply among OECD countries
• 41.9 TWh of electricity was generated in 2017, 1.3% more than in 2016
• 82% of the electricity generated in 2017 was from renewable sources, down from
85% in 2016.
• Additional 1.3 TWh electricity from coal and gas generation in 2017

Primary Energy Supply, PJ Consumption by Sector, PJ

1'000.00 700.00

900.00
600.00
800.00

700.00 500.00

600.00
400.00
500.00
300.00
400.00

300.00 200.00
200.00
100.00
100.00

- -
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Coal Oil Gas Hydro Geothermal Other Renewables Waste Heat Agriculture Industrial Commercial Residential Domestic Transport

Page 5
Total GHG emissions decomposition

Only small share

why to focus on it?

Page 6
 Representation of the entire energy system
 Modelling of today’s structure and future technology options and system boundaries
 For New Zealand’s North and South Island separately (two-region model)

TIMES New Zealand (TIMES-NZ)

Macroeconomic drivers (e.g., population, GDP, Household number, vkm)

Demand sectors
Technology characterization (Efficiency, lifetime, costs,…)
International energy prices (oil, natural gas, electricity, ...)

Electricity
sector Fuel Demand
Resource module distribution technologies
Nuclear plants Energy
Residential service
Natural gas Electricity - Boiler
Resource potential (wind, solar, biomass, ….)

Oil GTCC - Heat pump

demands
- Air conditioner
Hydro plants Gasoline - Appliances Space
Natural gas Diesel heating
Solar PV Services
Wind
Coal & Lignite Geothermal
Natural gas Agriculture Hot water
Other
Heating oil Industries Lighting
Renewable Fuel cell
· Hydro, solar, Transport Motors
Electricity Car fleet
wind, biomass, storage Process
ICE
etc. Hybrid vehicles heat
Fuel cell
Personal and
PHEV
Fuel supply CO2 BEV
freight
transportation
module Bus (vkm)
Oil refinery Trucks

vkm-Vehicle
vkm-Vehiclekilometre
kilometre
SMR
SMR-steam
SMR-steammethane
methanereformer
reformer Biofuels
GTCC-gas
GTCC-gasturbine
turbinecombined
combinedcycle
cycleplant
plant
Methanation

Displayed here, a simplified reference energy system Page 7

 Geothermal energy – is it climate neutral?

CO2 emission factor of fuel, g/kWh

400.00
350.00
300.00
250.00
200.00
150.00
100.00
50.00
0.00
Coal Diesel oil Natural gas Geo

Looks like about zero, isn`t it?

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Power production emission intensity levels

Actually,
25% of natural
gas value

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Caution: emission coefficient drastically
depends on source

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 Characteristics of geothermal power generation

• Works on nearly full capacity for whole year

(AF>90%)
• Long lifetime 30-40 years
• Highly predictable and stable source of energy

Usually far from livehood areas

Needs exploration and drilling (leading to high risk
and to high upfront costs)

Great source of energy but what if there will be

high carbon price?
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 Security of supply standards
There are two energy security of supply standards:
 Winter energy margin of 16% for New Zealand
 Winter energy margin of 30% for the South Island
There is one capacity security of supply standard:
 Winter capacity margin of 780MW for the North Island
Technology WEM-coefficient WCM-coefficient
NI SI
Hydro - Inflexible run-of-river 0.50 0.72
Best RES for supply

Controlled Hydro 0.46 0.48 0.98

security

Hydro - Flexible run- of-river 0.50 0.30 0.83

Thermal - Coal 0.93 0.97
Thermal - Gas 0.94 0.97
Wind: existing 0.38 0.34 0.25
new
0.30-0.40
Geothermal 0.93 0.92
Storages n.a. 0.98
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 Scenarios for analysis

• Technologically advanced and cost optimistic scenarios

• Energy efficiency focused (e.g. high energy efficiency increase for industry or
aviation, which is described as fuel consumption without technological details)

CO2 price, NZD/tCO2

500

400 From CGE model analysis of ZeroCarbon

scenario
300

200

100

0
2020 2025 2030 2035 2040 2045 2050

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 Fuel consumption patterns
Total final consumption by fuel type, PJ
800
700
600
500
400
300
200
100
0
2015 2020 2025 2030 2035 2040 2050 2060
Total final consumption by fuel type, %
100%

50%

0%
2015 2020 2025 2030 2035 2040 2050 2060
Coal (c) Oil Gases Electricity Heat Biomass & Biofuels (d) Other (e)

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 Power system

30
Power generation capacities, GW
25

20

15

10

0
2015 2020 2030 2035 2040 2050 2035 2040 2050 2035 2040 2050
ZeroCarbon High cost Low cost
Coal Coal (with CCS) Oil Gas
Gas (with CCS) Hydro Biomass Wind
Solar Geothermal Other
Geothermal
provides system
security at lower
capacities
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 Installed capacity of geothermal power at
different CO2 prices

Geothermal power capacity, GW

4
Available technical potential
3.5
3
2.5
2
1.5
1
0.5
0
2015 2025 2030 2035 2040 2045 2050
25 81 157 251 436
Name of the curve is CO2 price in 2050

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 Power generation

Electricity generation, TWh

100

80

60

40

20

0
2015 2020 2030 2035 2040 2050 2035 2040 2050 2035 2040 2050
ZeroCarbon High cost Low cost
Coal Coal (with CCS) Oil Gas
Gas (with CCS) Hydro Biomass Wind
Solar Geothermal Other
Gas generation stays active for whole time horizon due to WEM and WCM
with combination of lower bound on activity.
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 Conclusions

• One of the best technology choice at low carbon prices,

reliable and clean
• In deep decarbonisation scenarios, emissions from
geothermal energy need to be accounted
• But only extremely high carbon prices put it behind CCS
power plants
• Needs to be better represented by emission intensity levels

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 Future outlook

• Detailed modeling of all demand sectors:

Further demand split to lower subcategories
oMore transport modes
oIndustry, agriculture and service sectors on subcategories
oBuilding types
Technological enhancement

• Linking with EnergyLink power dispatch model

• Possible contribution to emission budget studies for
upcoming 5-year emission budget planning

Page 19
 Thanks for listening!

Many thanks to:

• BEC-NZ & the funders
• Golbon, Kiti (UoA) & Steve (Sapere)
for the great collaboration
• Kannan (PSI) for the insights into
the Swiss TIMES model & support

Contact:
bakytzhan.suleimenov@psi.ch
 Major data sources used in the model
Sector Data sources

General - Energy balances, 2012-2018, MBIE

- Energy in New Zealand, 2015-2018, MBIE
- Extended energy balance 2015, IEA
- GHG inventory submission 2018, UNFCCC
- BEC NZ assumptions (incl. NZ Stats)
Demand sectors - EEUDB 2012 – 2015, EECA
general - Energy Economic Potential Tool: Method Technical
Description, EECA
Power sector - Security of Supply Annual Assessment, 2015-2018,
Transpower
- Electricity balance, MBIE
- The Generation Expansion Model (GEM) database, MBIE
Supply sector - Scion and Concept research reports on bioenergy,
hydrogen and natural gas
- RefiningNZ annual reports
Transport sector - Transport fleet report, Ministry of Transport
- National Tranport Model of MoT
- EV uptake report (Resource Economics) Page 21