What is New Zealand's pathway to limit global warming to 1.5°C?
Power
Power sector in 2030
New Zealand benefits from a power mix with a relatively high share of renewables of 82% in 2019. The country has set the target of 90% renewable electricity generation by 20251 and 100% renewable electricity by 2035.2 A Paris Agreement compatible pathway requires New Zealand to be near 100% renewable power by 2030 and phasing out coal in the current decade and natural gas by 2031 to 2034 latest.
New Zealand would need to diversify its renewable energy mix in the power sector amid concerns about relying on hydro power as hydro generation declines during El Niño events. Coal and gas were used to meet the recent shortfalls of hydro generation in 2019 and 2021.3 Geothermal, wind, solar and storage technologies along with energy efficiency measures should be scaled up to meet hydro power shortfalls and replace fossil fuels. Current plans focus on wind, geothermal and gas-fired peaking plants.4 New Zealand is also investigating a pumped hydro storage project to manage dry years when lake levels are low, to replace the current backup for energy production largely coming from coal power plants.5
New Zealand's power mix
terawatt-hour per year
In the 100%RE scenario, non-energy fossil fuel demand is not included.
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Graph description
Power energy mix composition in generation (TWh) and capacities (GW) for the years 2030, 2040 and 2050 based on selected IPCC SR1.5 global least costs pathways and a 100% renewable energy pathway. Selected countries include the Stated Policies Scenario from the IEA's World Energy Outlook 2021.
Methodology
Data References
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Towards a fully decarbonised power sector To align with a 1.5°C compatible pathway, New Zealand would need to reduce its power emissions intensity by 94% from 2019 levels by 2030 reaching 10 gCO₂/kWh by 2030 and 0 or below by 2040.
While negative emissions technologies such as BECCS require upfront investments, a later phase out of fossil fuel will result in a higher reliance on negative emissions technology.
Several scenarios show the phase out of unabated fossil fuels, displaced by renewable energy without the need for BECCS or fossil fuels with CCS. Considering New Zealand’s current high levels of renewable energy in the power sector, renewables with storage offers a more likely alternative path to decarbonise the power sector.
New Zealand's power sector emissions and carbon intensity
MtCO₂/yr
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Graph description
Emissions and carbon intensity of the power sector in selected 1.5°C compatible pathways.
Methodology
Data References
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Investments
Yearly investment requirements in renewable energy
Across the set of 1.5°C pathways that we have analysed, annual investments in renewable energy excluding BECCS increase in New Zealand to be on the order of USD 0.5 to 2.4 billion by 2030 and 0.8 to 3 billion by 2040 depending on the scenario considered. The ‘high energy demand, low CDR reliance’ pathway shows a particularly high increase in renewable capacity investments, which could be driven by an increase of electrification of end-use sectors and growing energy demand. Other modelled pathways have relatively lower investments in renewables and rely to varying degrees on other technologies and measures such as energy efficiency and negative emissions technologies, of which the latter can require high up-front investments.
Demand shifting towards the power sector
The 1.5°C compatible pathways analysed here tend to show a strong increase in power generation and installed capacities across time. This is because end-use sectors (such as transport, buildings or industry) are increasingly electrified under 1.5°C compatible pathways, shifting energy demand to the power sector. Globally, the “high energy demand” pathway entails a particularly high degree of renewable energy-based electrification across the various sectors, and sees a considerable increase in renewable energy capacities over time.
New Zealand's renewable electricity investments
Billion USD / yr
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Graph description
Annual investments required for variable and conventional renewables installed capacities excluding BECCS across time under 1.5°C compatible pathway.
Methodology
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1.5°C compatible power sector benchmarks
Carbon intensity, renewable generation share, and fossil fuel generation share from illustrative 1.5°C pathways for New Zealand
| Indicator |
2019
|
2030
|
2040
|
2050
|
Decarbonised power sector by
|
|---|---|---|---|---|---|
|
Carbon intensity of power
gCO₂/kWh
|
115
|
7 to
7
|
-29 to
0
|
-20 to
-3
|
2032 to
2033
|
|
Relative to reference year in %
|
-94 to
-94%
|
-125 to
-100%
|
-118 to
-103%
|
| Indicator |
2019
|
2030
|
2040
|
2050
|
Year of phase-out
|
|---|---|---|---|---|---|
|
Share of unabated coal
per cent
|
5
|
0 to
0
|
0 to
0
|
0 to
0
|
|
|
Share of unabated gas
per cent
|
13
|
1 to
2
|
0 to
0
|
0 to
0
|
2031 to
2034
|
|
Share of renewable energy
per cent
|
82
|
98 to
99
|
100 to
100
|
100 to
100
|
|
|
Share of unabated fossil fuel
per cent
|
18
|
1 to
2
|
0 to
0
|
0 to
0
|
BECCS are the only Carbon Dioxide Removal (CDR) technologies considered in these benchmarks
All values are rounded
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Methodology
Data References
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