What is New Zealand’s energy mix? How does it plan to reduce carbon footprint?

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What is New Zealand’s energy mix? How does it plan to reduce carbon footprint?

 What is New Zealand’s energy mix? How does it plan to reduce carbon footprint?
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New Zealand has a well-developed energy sector. Roughly 60% of the energy supply of New Zealand comes from oil, coal, and gas, while the remaining 40% comes from renewable energy sources.

Renewable energy comes from natural sources, which are naturally restocked and include water, sunlight, and wind, etc.

ALSO READ: Renewable Energy: Which Source Can Be Harnessed the Most?

Nearly 50% of the country’s energy consumption is solely for transport, and 25% of the energy use is in the form of electricity. New Zealand's renewable energy resources, such as geothermal, hydroelectricity, and wind energy, are utilised to meet around 80% of the country's electricity demands.     

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As per a Ministry of Business, Innovation and Employment (MBIE) report, New Zealand’s share of renewable electricity generation was the third highest in the OECD.

Top Energy sources in New Zealand

These are the foremost energy sources within the country.

  1. Oil

Because oil is New Zealand's primary source of energy, it has a significant impact on the country's economy. New Zealand imports both crude and processed petroleum products and exports local crude.

ALSO READ: What are the factors that influence global crude oil prices?

In the Taranaki area, oil is produced from many fields. The Maari and Pohokura fields now account for more than half of all domestic oil output.

  1. Gas

Natural gas is produced from onshore and offshore wells in New Zealand's Taranaki area. It is created almost the same way as oil. The Pohokura and Maui fields account for the majority of the total gas output.

  1. Renewable resources

Renewable energy sources account for a considerable portion of New Zealand's total primary energy supply (TPES). Hydro, geothermal, wind and bioenergy are used to produce electricity in the country.

DO READ: Will Hiked Electricity, Gas Prices In March 2021 Quarter Affect New Zealanders?

Hydroelectricity fulfills the majority of the electricity needs of New Zealand followed by geothermal and wind generation. Electricity is also generated through the burning of coal, oil, and gas, and it is used for baseload, back-up, and peaker power. These fuels account for around a quarter of New Zealand's electrical generation.

  1. Coal

In-ground coal deposits in New Zealand include more than 16 billion tonnes, with lignite accounting for 80% of the total in South Island.

Top Power players in the country

New Zealand has abundant coal reserves, but the move to a decarbonised economy changes the focus to renewable fuel supplies, such as wind, solar, biomass, and geothermal resources, which New Zealand possesses in plenty.

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There are 6 major electricity generators in the country that include:

  1. Genesis Energy Limited (NZX:GNE) engages in the sale of electricity, reticulated natural gas and liquified natural gas (LPG).
  2. Contact Energy Limited (NZX:CEN), a sustainable energy company, engages in generating electricity while incurring more than 80% of its generation from renewable sources.
  3. Mercury NZ Limited (NZX:MCY), electricity generation and retailing company that utilises renewable energy resources.
  4. Meridian Energy Limited (NZX:MEL) produces electricity through renewable sources such as water, wind, and sun, and therefore, it is committed towards the sustainability goals.
  5. Trustpower Limited (NZX:TPW) serves a significant number of businesses of all sizes across New Zealand by offering an unmatched range of energy, internet and phone services.

Budget 2021 gave a boost to green funding

Budget 2021 announced many significant climate change initiatives. New Zealand Green Investment Finance is getting a $300-million boost, effectively 4 times its size, with an emphasis on decarbonising public transportation, waste, and plastics.

ALSO READ: Climate Change Commission delivers final report to New Zealand Government

There were several climate-related investments that were declared. They included:

  • $302 million for low-emission vehicle incentives.
  • $120 million for home insulation and heating retrofits.
  • $17 million to build regulatory capacity for large financial institutions' climate risk reporting.
  • $6 million to implement a sustainable biofuel mandate.
  • $37 million for integrated farm planning system and $24 million to fast-track research to mitigate agri-GHG within the agricultural sector.

Related Read; Budget 2021 Aims At Greenhouse Gas Emissions; A glance At 5 NZX Energy Stocks- ZEL, MEL, MCY, TPW, TLT

The Climate Change Commission will receive a $10-million boost to address important cost constraints, while the initiative to make the public sector carbon neutral by 2025 will receive $67.4 million.

Government initiatives taken so far

The government's energy plans define the sector's policy direction and priorities, with the goal of achieving net-zero carbon emissions by 2050 while creating a more productive, sustainable, and equitable economy.

DO READ: The World Is Shifting to Cleaner Energy Forms, but What About Sustainability?

The government's objective is for a cost-effective, secure, and long-term energy system, which ensures New Zealanders' well-being in a low-emissions environment.

Source: Copyright © 2021 Kalkine Media

Government has the below 3 energy strategies for New Zealand.

  • Renewable energy strategy work programme, which encourages more investment in low-emission technologies and creates new prospects for businesses.
  • Hydrogen strategy for NZ, which comprises hydrogen vision (2019) and a hydro roadmap in NZ.
  • New Zealand Energy Efficiency and Conservation Strategy 2017-2022 establishes the broad policy direction for government support and involvement in the development of energy efficiency, conservation, and the use of renewable energy sources in New Zealand from 2017 to 2022.

ALSO READ: Will EV Market Help New Zealand Reach Zero Carbon Level?

In the debate over climate change and the shift to a low-emission economy, renewable energy generation has taken center stage. The usage of electricity to fulfill energy end-uses and increasing the percentage of power generated from renewable sources are both priority areas.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

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