Cutting-edge modelling highlights different energy futures

The BusinessNZ Energy Council (BEC), along with businesses, academia, government and non-government organisations today released two plausible scenarios of New Zealand’s energy future to 2060.

The scenarios will help government leaders, businesses and individuals manage uncertainties and make resilient decisions in a world where uncertainty is growing.

While the problems we think we are addressing might be clearer, we do not know the future, BEC executive director John Carnegie says.

Scenarios that paint pictures at the extremes of the spectrum help us think about the uncertainties facing the energy sector - like accelerating deeper and affordable decarbonisation, autonomous mobility and energy security - in a structured, methodical way.

The New Zealand economy is set for a major transformation, with less reliance on primary produce and greater emphasis on service industries, according to the new modelling.

Should we invest ahead of the rest-of-the-world in climate action or should we continue to adopt clean tech as it is commercially viable to do so?

Mr Carnegie says there are some considerable costs associated with making an early transformation including, potentially, failure of some businesses, unemployment and other transition issues. But the risks are equally high if the country continues doubling down on traditional wealth generators and an intentional go slow compared to the rest of the world.

"Collectively, we need to develop an understanding of what it might be that we will be selling to the rest of the world by 2040, or beyond, and that they want to buy that will retain or enhance our prosperity and wellbeing as a nation. Energy will be an enabler of this new economy not a cause of it."

Mr Carnegie says it is essential policymakers, businesses and investors turn their focus to innovation and R&D to commercialise solutions.

"They all have important roles in shaping what this future might look like.

"Investment is unlocked from stable policy frameworks, but these frameworks must be adaptive and responsive to a changing world.

"Governments must be prepared to find the right balance between making policy and investment decisions today and decisions that are affordable, resilient and adaptive to the rapidly moving energy system."

Energy security is a case in point and becoming more important in a renewable world - careful investment in the resilience of our electricity system is required to ensure the wider economic reach of electricity is not compromised by the very problem it is trying to fix.

This plays out in our domestic gas sector scenarios with the prospect arising of importing LNG.

"Is this a future we want, and if not, how do we fuel our export economy with affordable alternatives?"

ENDS

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