More Wind And Solar Generation Needed To Meet Future Demand

New Zealand will require new generation to meet future electricity demand, according to the latest Electricity Demand and Generation Scenarios (EDGS) report released by the Ministry of Business, Innovation and Employment (MBIE) today.

“Demand for electricity is expected to grow as existing fossil fuel use switches to electricity, higher uptake of electric vehicles, and new demand – such as large-scale datacentres coming online. By 2050, it is expected around half of all energy demand will be met by electricity,” says Markets Manager Mike Hayward.

“Modelling shows wind and solar is the most likely way to generate enough electricity to meet demand. Wind and solar technologies continue to be more cost effective and future innovation is likely to improve this further.”

EDGS is an independent set of scenarios that explore potential future electricity demand, and the generation capacity needed to meet that demand, out to 2050. The independent scenarios are used by the Commerce Commission to assess Transpower’s planning proposals for future capital investment in the electricity transmission grid. 

The report shows an 80.9% increase in demand for electricity under favourable economic conditions by 2050. This would result in current national demand of 39.6 TWh increasing to 71.7 TWh in 2050.

“The 2030s see considerable change in electricity demand and generation, with increased demand for electricity and existing coal and natural gas electricity generation capacity expected to retire,” says Mike Hayward.

“While modelling shows increased renewable energy generation will most likely be used to meet the additional demand for the next 26 years, it also shows that gas will continue to play a role in providing support to the electricity generation market”.

By 2035 it is expected that 92.1% of New Zealand’s electricity will be generated from renewable sources - with 45.7% hydro, 20.3% wind, 19.2% geothermal, 5.6% solar and 1.4% other renewable sources – increasing to 96.3% of generation from renewable sources by 2050.

The full EDGS report can be read on the MBIE website here: https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/energy-statistics-and-modelling/energy-modelling/electricity-demand-and-generation-scenarios

Notes

• The Commerce Commission is responsible for approving any major investments in transmission assets by Transpower.
• EDGS is also used as a reference by the energy industry, researchers, and other interested parties.
• The scenarios are based on macroeconomic assumptions – including GDP growth and the carbon price – and electricity demand assumptions – including EV uptake rate and fuel switching.
• MBIE previously published EDGS in 2016 and 2019.

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