NZ Energy Outlook alternative future scenarios

New Zealand Energy Outlook alternative future scenarios released

The Ministry of Economic Development today released its latest instalment of the New Zealand Energy Outlook. The New Zealand Energy Outlook presents long-term forecasts of energy supply, demand, prices and energy sector greenhouse gas emissions.

Today’s release sets out alternative future energy scenarios for New Zealand that look at the implications of a big indigenous oil or gas find and how New Zealand could reduce its reliance on imported oil. These scenarios show how New Zealand might address some of the potential challenges in New Zealand’s energy future.

The scenarios build on a Reference Scenario released in September last year that presented a “business-as-usual” case for energy in New Zealand. The Reference Scenario highlighted several challenges if New Zealand continues along its current path, including a continuing dependence on imported oil, the prospect of further electricity price rises, and increasing energy sector greenhouse gas emissions.

The forecast scenarios show that:
Additional gas finds in the Taranaki region could restrain wholesale electricity price increases for the next 20 years, and by up to 10 percent for most of the 2020s.
Development of deepwater Taranaki could see an extended period of lower electricity prices if the discoveries are not exported.
Large oil discoveries in the Great South Basin could see New Zealand become a net exporter of oil for the 2020s, as well as bring in substantial royalty and tax revenues.
To achieve a more permanent improvement in New Zealand’s oil security, there needs to be ongoing investment in exploration of our petroleum basins, coupled with efforts to reduce oil demand.
A considerable increase in the cost of international oil and emissions prices could result in significant energy efficiency gains and a reduction in the consumption of fossil fuels (and switching to non-fossil fuel alternatives) in New Zealand.
Motorists will initially respond to increasing international oil prices by making greater use of public transport in metropolitan areas and purchasing more efficient internal combustion and hybrid vehicles.
From 2020, with high international oil and emissions prices, electric vehicles make up an increasing portion of the light vehicle fleet and we see development of a substantial domestic biofuel industry. There is also widespread switching from coal and gas to wood for industrial heat.
With reduced demand for oil, New Zealand’s net oil import dependence would improve by as much as 30 percent by 2040.
Dependent on the how high oil prices go, energy greenhouse gas emissions could fall below 1990 levels by 2040.
A widespread uptake of electric vehicles will have a limited impact on total electricity use, and if these electric vehicles are recharged in off-peak times, then there is unlikely to be any significant change in wholesale electricity prices.
The forecast scenarios are available (free of charge) as two articles (Changing Gear Scenario and Hydrocarbon Harvest Scenario) on the Ministry’s website at www.med.govt.nz/energyoutlook, along with the Reference Scenario and three Sensitivity Cases.

Information on the full range of energy publications produced by the Ministry of Economic Development, along with the latest quarterly data, can be found at www.med.govt.nz/energy/publications.

ENDS

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