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Electricity Sector
CONTENTS
3 PURPOSE
3 WHAT IS ELECTRICITY?
4 KEY ELEMENTS OF THE ELECTRICITY SECTOR
4 Generation
9 Transmission
9 Distribution
9 Retailers
9 Electricity consumers
Managing the national grid from Transpower’s Wellington control room. Photo courtesy of Transpower New Zealand Limited.
Generation
New Zealand’s total generation capacity is currently around 9,100 MW, compared with daily peak
demand of about 6,500 MW.
More than half of New Zealand’s electricity is generated from hydro-electric stations. The remainder
comes from thermal, geothermal and wind power, with smaller amounts from other sources as shown
in Figure 2 and 3. Some industrial sites produce heat and electricity for industrial processes, in a process
known as cogeneration. Often excess cogenerated electricity is exported into the distribution network or
national grid.
Because New Zealand’s storage lakes can only hold enough water for a few weeks of winter energy
demand, hydro generation is sensitive to the level of inflows from rainfall and snowmelt. For this
reason, when inflows are low for a sustained period, alternatives such as coal must fill the place of
reduced hydro generation. In 2008, 52 percent of electricity was produced at hydro stations, 24 percent
by gas-fired power stations, 10.5 percent by coal-fired stations, 9.5 percent geothermal, 2.5 percent wind
power and 1.5 percent other sources. Hydro contribution has ranged between 52 percent and 65 percent
over the last five years. Figures 2 and 3 show how the generation mix has changed over time as demand
has increased.
A full list of New Zealand generation plants bigger than 10 MW is provided in Table 1. Figure 4 shows the
locations of the plant.
35,000
30,000
25,000
Hydro
20,000
Geothermal
15,000 OTHER
OIL
10,000
Coal
5,000 GAS
0 COGENERATION
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Source: New Zealand Energy Data File 2009
9,000
8,000
7,000 Hydro
Geothermal
6,000
other
5,000
FUEL OIL
4,000
DIESEL
3,000 COAL/GAS
2,000 GAS
1,000 Gas/OIL
0 COGENERATION
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
There are a number of new generation technologies under development in New Zealand and
internationally. Tidal and wave power are examples of emergent technologies that might become
commercially viable in the future. Tidal power uses the predictable movement of tides to generate
electricity, whereas wave power uses the energy of ocean surface waves.
Each generation type has different characteristics, as summarised in Table 2. Because of these
differences, it is desirable to have a mix of plant types rather than rely entirely on one fuel source,
location or technology.
1. List includes all stations greater than 10 MW. 4. Whirinaki is operated under direction from the Electricity Commission.
2. Company names are listed without the suffixes ‘Limited’, The plant is owned by the Crown with Contact Energy engaged to
‘New Zealand Limited’ and ‘Co-operative Group Limited’ operate and maintain the plant.
where applicable. 5. Ohaaki plant capacity has been derated from 104 MW to 50 MW.
3. 1,000 MW is the maximum capacity if running fully on gas. Currently as 6. Manapouri has a maximum capacity of 840 MW but cannot generate
coal and gas the capacity is less by up to 40 MW. this due to consent limits.
7. To be completed late 2009.
Ngawha
Te Rapa
Kaimai Scheme
Karapiro
Edgecumbe
Kawerau
Arapuni
Southdown
Waipapa Kinleith Matahina
Otahuhu
Maraetai Atiamuri
Aniwhenua Glenbrook
Whakamaru Ohakuri
Wheao Huntly
Poihipi
See Inset
Mokai Ohaaki
Aratiatia Rotokawa
Wairakei
Kaitawa Tuai
Piripaua
Tokaanu
Rangipo
Taranaki CC
Whirinaki
Kapuni
Whareroa
Patea
Te Apiti
Tararua
Mangahao
Cobb
West Wind
TYPE OF GENERATION
HYDRO
Coleridge
GAS
Highbank
GEoTHERMAL
Tekapo A
Tekapo B
Ohau A
Ohau B Ohau C COAL
Benmore
Aviemore Waitaki
WIND
Clyde Paerau
Roxburgh OTHER
Manapouri Teviot
(Biomass/waste heat)
Waipori
Whitehill
Diesel
Hydro Water pressure drives a • Expensive to build, but low running cost
turbine connected to an • Generation affected by inflows from rainfall/snowmelt
electricity generator
• Some environmental impact due to construction and/or
operation, but no greenhouse gas emissions from operation
• Location dictated by hydro resource availability
Geothermal Steam from deep • Relatively high upfront cost but modest running cost
(e.g. Wairakei) underground is piped • All New Zealand geothermal sources produce some
to the surface to drive a greenhouse gases
turbine connected to an
electricity generator • Must be located near source of underground heat or steam
Wind Wind turns a large rotor • Expensive to build but low running cost
which is coupled to an • Difficult to forecast output accurately and output may vary
electricity generator from minute to minute, so fast-start generation is needed to
provide backup
• Construction and operation have some environmental impact
• No greenhouse gas emissions during operation
Gas- or coal- A boiler heated by • Lower upfront cost than renewables, but more costly to run due
fired steam burning fossil fuel creates to ongoing fuel bill
plant steam, which drives a
(e.g. Huntly) • Less vulnerable to ‘forces of nature’ in short term – provided
turbine connected to an fuel supply is secure
electricity generator
• Less efficient in fuel conversion than newer combined
cycle technology
• Emits greenhouse gases/other pollutants
Combined Burning of gas is used • Upfront cost lower than renewables and most steam plant
cycle gas to drive a turbine which
turbine • Higher fuel conversion efficiency than steam plant
is connected to an
(CCGT) (e.g. electricity generator. Heat • Less vulnerable to ‘forces of nature’ in short term – provided
Otahuhu CC) fuel supply is secure
from turbine exhaust is
used to create steam, • Relatively small footprint provides locational flexibility
which is also coupled to • Emits greenhouse gases
a generator to produce
electricity
DEMAND (KW)
Electricity consumption by sector is shown in Figure 6. Industrial and commercial users account for two-
thirds of total demand, but only slightly more than 25 percent by customer numbers. This is because these
users have higher average consumption per customer. For example, the single largest user (the aluminium
smelter at Bluff) accounts for approximately 14 percent of New Zealand’s total electricity demand.
Industrial 44%
Industrial 6%
Residential users make up about one-third of total consumption, with the majority of residential demand
being for water heating, space heating and lighting as shown in Figure 7.
Technological progress has an impact on electricity consumption as well as generation. There has been
growth in electricity-using technologies over time such as computers and air-conditioning, but there have
also been improvements in efficiency. For example, modern electric lighting, heating appliances and
motors are significantly more efficient than their predecessors. Improved electricity efficiency is expected
to play an increasingly important role in future security of supply and achieving sustainability objectives.
Heating 19%
Misc 22%
Water heating 26% Dishwashers 1%
Otahuhu
Huntly
Whakamaru
Stratford
Bunnythorpe
Kikiwa
Haywards
Islington
LINE CAPACITY
50 kV, 66 kV
110 kV
220 kV
350 kV (HVDC)
Benmore Substation
Tiwai
Benmore Hydro Station on the Waitaki River. Photo courtesy of Meridian Energy limited.
Contact Energy is a publicly listed generation and retail company with hydro, gas-fired and geothermal plant.
Contact Energy was created from the first split of ECNZ in 1996. www.contactenergy.co.nz
Genesis Energy is a state owned generation and retail company. Generation assets include hydro,
coal- and gas-fired and wind power. Genesis was created from the second split of ECNZ in 1998.
www.genesisenergy.co.nz
Meridian Energy is a state owned generation and retail company, which owns primarily hydro and wind
generation assets. Meridian was created from the second split of ECNZ in 1998.
www.meridianenergy.co.nz
Mighty River Power is a state owned generation and retail company with hydro, geothermal and cogeneration
plant. Mighty River Power was created from the second split of ECNZ in 1998.
www.mightyriverpower.co.nz
TrustPower is a publicly listed generation and retail company with hydro and wind generation plant.
www.trustpower.co.nz
The installed generation capacities of the five major generation companies, and the type of generating
plant they own (as at 2009) are shown in Figure 10.
Figure 10: GENERATION CAPACITY AND TYPE, BY GENERATING COMPANY (Largest fiVe only)
MW installed capacity
TrustPower
Coal/Gas
Mighty River Power Diesel
Gas
Meridian Energy
Gas/Wood/Coal
Genesis Power Geothermal
Hydro
Contact Energy
Wind
In addition to the major generating companies, some electricity is generated by independently owned
hydro, geothermal, wind and cogeneration stations. Most generation injects directly into the national
grid; others, typically smaller stations, connect into distribution networks. A full list of grid-connected
generating stations over 10 MW in size is provided in Table 1.
Distribution
The distribution companies that own the local distribution networks throughout New Zealand, are shown
in Figure 11. Although some of the largest distribution companies are publicly listed, most companies are
owned by local trusts or other local bodies.
Company 2
1 Top Energy
3
2 Northpower
3 United Networks 4
4 Vector 6
10
5 Horizon Energy Distribution 7
6 Counties Power 8
7 WEL Networks 5
8 Waipa Networks 9 11
9 The Lines Company
10 Powerco 12
11 Eastland Networks
10
12 Unison Networks 13
13 Centralines 14
14 Scanpower 15
16
15 Electra 29
16 Nelson Electricity 19
17 Marlborough Lines 18 17
18 Network Tasman
19 Buller Electricity
20 Westpower
21
21 Mainpower
20 22 22 Orion
23 Electricity Ashburton
23
24 Alpine Energy
24
25 Aurora Energy
26 The Power Company/ Electricity
25
28 Invercargill JV
27 27 OtagoNet
28 Network Waitaki
26 25 29 Wellington Electricity Lines Limited
26
0 50 100 150 200 250 300 350 400 450 500 550 600
NUMBER OF CONNECTIONS (000)
Retailing
All of the main generation companies in New Zealand are also electricity retailers. In addition, there are a
number of smaller independent electricity retail companies. The approximate market shares of retailers with
more than 10,000 customers are shown in Figure 13.
25
percent of market share
20
15
10
0
Contact Energy
Genesis Energy
Mercury Energy1
Meridian Energy2
TrustPower
Energy Online3
Bosco Connect
Powershop NZ
retailer
Source: Electricity Commission
1. Mercury Energy is a subsidiary of generator, Mighty River Power. 3. Energy Online is a subsidiary of Genesis Energy.
2. Note: Meridian Energy customer numbers include Comalco,
which accounts for about 14% of national electricity demand.
Ministry of Economic Development (www.med.govt.nz) MED is the Government’s policy advisor for the
energy sector, including the electricity sector. MED also has ownership responsibilities for the Whirinaki
electricity reserve generation plant. The Minister of Energy sets the Government Policy Statement which
sets out the Government’s expectations of the Electricity Commission.
Ministry for the Environment (www.mfe.govt.nz) MfE advises and assists the Minister for the
Environment with his or her responsibilities under the Resource Management Act 1991. Existing and
new power stations need to meet the environmental requirements set out in this Act.
About 1,400 The capacity of New Zealand’s largest power station, Genesis Energy’s gas- and coal-
MW fired station at Huntly
More than The capacity of New Zealand’s largest hydro power plant, Meridian Energy’s
700 MW Manapouri power station
Over 450 MW The expected total capacity of wind farms by the end of 2009.
1914 The year TrustPower’s hydro plant at Coleridge opened. It is the oldest operating
electricity generator in New Zealand
12,000 km The total length of the high voltage transmission lines that make up Transpower’s
national grid. They are supported by 40,000 supporting towers and poles
150,000 km The length of lines owned by local distribution companies, which take power from the
grid and deliver it to the end consumer
100,000 MWh The average amount of electricity New Zealand uses every day
About 40,000 The approximate amount of electricity New Zealand used in 2008, about the same as
GWh Hong Kong (approximately 7 million people) and only about 1% of the usage of the
United States
6,500 MW Approximate peak demand for electricity – usually occurs on cold, winter,
weekday evenings
About 2% per The average growth in national electricity consumption over the past decade
year
9,000 kWh The amount of electricity an average New Zealand household uses per year.
In 1974 an average household used 7,600 kWh
About 33% The percentage of total national electricity demand used by residential consumers.
Industrial consumers use about 45% and commercial customers about 22%
About 14% The percentage of total national electricity demand used by the Tiwai Point
aluminium smelter
1.9 million The total number of electricity consumers in New Zealand, including householdes
and businesses
$5.5 billion The amount New Zealanders paid for electricity in 2007, of which about 75 percent
was on energy and about 25 percent on lines costs
Electricity Commission
Te Komihana Hiko
www.electricitycommission.govt.nz