April update
Industry update: what we're seeing
The recent cold snap of the past few weeks has put paid to any hope of New Zealand experiencing a delayed summer. The Antarctic winds that swept over the country placed unexpected stress on New Zealand’s national grid, despite hydro lakes being nearly fill to the brim after what has been an unusually wet summer season.
Residents in Canterbury were asked to reduce their electricity consumption during a particularly cold evening, or face the prospect of localised electricity outages.
Electrification is progressing. But if we jump into it too quickly, without adequate electricity generation (including flexible capacity) to meet the growing demand, then energy reliability is going to suffer.
Analysts have been warning for some time now that our unusually wet summer could be followed by an unusually dry winter. This will place pressure on the electricity generators and once again show how natural gas continues to play an important role in generating electricity when the lakes are low, the sun is not shining, and the wind is not blowing.
The latest MBIE statistics show that 9.9% of all electricity that entered the national grid in 2022 was provided by natural gas – and that was when we managed to avoid dry year conditions.
At the moment, there seems to be little political focus on the importance of having natural gas as a dry year back-up for our electricity system.
It will be interesting to see how that changes in the winter months to come.
Launch of Castalia's Vision for Gas report
On 22 March, we launched Castalia's 2035/2050 Vision for Gas report, which we had jointly commissioned with GasNZ and the Major Gas Users' Group.
The report shows that Kiwi households and businesses could face more than $7 billion in additional energy costs over the next 12 years if government actions force an early move away from natural gas.
It also showed that as natural gas demand declines, carbon capture, utilisation, and storage (CCUS) and shifting to renewable gases will ensure reliable, affordable energy for all New Zealanders and help meet the country’s carbon reduction goals.
In short, the report showed that gas in all its forms has a key role delivering New Zealand’s transition to a net zero emissions economy. You can read our press release here.
We thought the findings of the report were important - and media outlets agreed.
- Stuff
Households and businesses could face extra $7b in energy costs, report finds
- Energy News
Radio New Zealand
New Zealanders could pay extra $7 billion for power over next 12 years, report says
1News
Kiwis could pay extra $7b for power in next 12 years - report
BusinessDesk
Gas plan offers much pain for little gain, says gas sector
In addition, John was also interviewed on Newstalk ZB and Radio New Zealand to discuss the findings of the report.
Why we need CCUS
Carbon Capture, Utilisation, and Storage (CCUS) refers to a suite of technologies that capture emissions at their point of origin. The carbon is then stored underground or utilised in processes where it is not released into the atmosphere.
Carbon capture technologies have the potential to reduce New Zealand's carbon emissions by up to 15 million tonnes of carbon - the equivalent of taking around 700,000 cars off the road by 2035.
The only problem is that unlike the UK, Australia, Canada, Norway, and other countries we compare ourselves to, New Zealand does not have laws and regulations that allow these projects to get off the ground.
John joined Ryan Bridge on AM to discuss what potential CCUS has for reaching our net zero emissions goals, and why we need an enabling regime in New Zealand to allow their use.
New Zealand's public policy:
prestigious or poor?
Public policy is an invisible force that in reality shapes how we live our lives. It is how we set standards, impose requirements, and coax Kiwis towards certain behaviours.
Everything from the device you’re reading this on, through to the food in your fridge, and the fuel in your vehicle is subject to a myriad of policies.
But is the state of New Zealand’s public policy up to scratch? Does this matter? What does good public policy look like? And how does New Zealand’s policy landscape compare to the rest of the world?
We have assembled a fantastic panel to discuss New Zealand's policy environment, and what we should be paying attention to in the lead up to General Election 2023:
- Josie Pagani (Consultant - Pagani Agency)
- Phil O'Reilly ONZM (Managing Director - Iron Duke Partners)
- Dr Bryce Edwards (Director - The Democracy Project)
- Dr Oliver Hartwich (Executive Director - The New Zealand Initiative)
Join us for a robust and enlightening discussion on Wednesday 19 April in Wellington.
This event is free for members of Energy Resources Aotearoa.
Kindly hosted by KPMG.
Downstream 2023
On Tuesday 28 March, our Chief Executive John Carnegie facilitated a panel event at the Downstream conference on the critical role of gas in the energy transition.
Downstream is always a great opportunity to bring the broader energy sector together to discuss our collective priorities, gain insights from people across the industry, and look out for common themes.
The guests on the panel comprised:
- Pauline Martin, Genesis Energy
- John Kidd, Enerlytica
- Stuart McCall, Methanex
- Caitlin Tromop van Dalen, Gas Industry Co.
- Andrew Knight, Gas Industry Co.
It was fantastic to hear the insights of the panellists, and the broad agreement in the need for an enabling regime for carbon capture, utilisation, and storage (CCUS) to help us meet our net zero emissions goals.
CCUS was picked up as a theme during the next day's political panel, with National Party energy spokesperson Stuart Smith highlighting it as something that he is keen to look into.
Lake Onslow to next phase
Several weeks ago the Government announced that they would instruct MBIE to proceed with the next stage of the NZ Battery Project, which would look at the detailed business case for a pumped hydro project.
We released a media statement criticising the move and reiterated our comments that the scheme needs to be scrapped.
This decade New Zealand needs to see historic levels of new investment in the energy sector – including large-scale electricity generation; natural gas generation and storage; renewable gas and biomass; and demand response. That investment is harder to justify while the prospect of Lake Onslow hangs over the sector.
In our commentary, we pointed to two separate reports (The Future is Electric, and Fuelling the Energy Transition) that have shown there are more cost-efficient pathways to deliver reliable, affordable, and sustainable energy.
In our statement, we also pointed to the Australian experience with pumped-hydro. Over there, the Snowy 2.0 pumped hydro scheme has been beset with cost and schedule blowouts. The project has gone from AU$2bn to AU$20bn, and delivery has been delayed from four years to at least 12 years.
The worst part about Snowy? Due to the cost blowouts, Australians will pay more for electricity once it is complete.
Careers expo - Auckland
In late March, we attended the University of Auckland STEM Career Expo to talk to students about the exciting current and emerging opportunities in the energy sector.
It was great to talk to so many talented students about why they should consider a career in New Zealand's energy sector.
Each year we attend career expos across the country to give visibility to the energy sector and promote pathways for graduates in our industry.
Energy Skills Industry Talent Corner
Introducing Chante De Villiers, Electrical Engineering Intern, Beach Energy
Chante is currently studying Mechatronics at the University of Auckland and was fortunate to secure a summer internship with Beach Energy in Taranaki.
“Working at Beach Energy I felt a great culture of enthusiasm and encouragement for growth. I had access to exciting projects and a team who were eager to share knowledge with me."
"I got a taste of the many different areas of engineering people were working on, and discovered that there are so many exciting applications of engineering that I can be involved with in the future."
"I walked in with very little knowledge as a second-year student and walked out with many new practical skills and a renewed passion for engineering. Beach is an awesome company and I thoroughly enjoyed my opportunity to work there.”
Chante was provided with a unique experience to visit the Beach energy offshore Kupe energy production platform during her internship, which provided her with the opportunity to see how aspects of her work would be put into practice.
Member profile: Sean Rush Energy and Infrastructure Law
Sean Rush Energy and Infrastructure Law is a specialist legal consultancy started by petroleum lawyer Sean Rush.
Sean commenced in the industry with ENI in London in 1996 and has since held European and General Counsel roles as well as being a partner in a City of London law firm.
He returned ‘home’ in 2013 as Todd Energy’s Commercial Manager before setting up SREIL in 2015.
He has advised a wide range of clients including the Governments of New Zealand, Australia and UK and new investors to New Zealand, such as Questus Energy regarding the Shell and Origin packages, and overseas clients in Canada, Australia and the UK.
Sean holds an LLB from Victoria University of Wellington and a Master’s in Petroleum Law and Policy from the University of Dundee. In 2019 he went back to university and gained a Master's in Climate Change Science and Policy.
He has appeared as an expert witness on industry practice and for climate related planning matters. From 2019 – 2022 he was a Wellington City Councillor.
If you are considering a new project in the energy sector and need legal advice, get in touch with Sean Rush on 027 706 7360 or via sean@seanrush.co.nz.
