The conversation on climate change and decarbonisation is heating up in New Zealand and around the world. Some are wondering if there is a future for gas in New Zealand. We say yes.
100% renewable energy is an aspirational goal. When you look at the big picture, we believe a balanced approach to our energy mix is needed. Ultimately, we want Kiwis to feel confident in choosing gas for their home and confident they are contributing to a cleaner, greener Aotearoa.
See our vision for a future gas home here.
Gas is part of a sustainable NZ
Natural gas and future gases have a role in ensuring NZ has a reliable, affordable and resilient energy supply as we move to a low-emissions economy.
NZ has plenty of natural gas
There’s plenty of natural gas available to power Kiwi homes and businesses well into the future. With around 15 producing gas fields and 31 active exploration permits across New Zealand, we’re confident that the gas you use to power your heating, hot water and cooking appliances isn’t running out anytime soon.
Residential homes directly use only a very small amount of all the natural gas produced in New Zealand – less than 3.6%. The rest is used by business and industry, and you may be surprised to learn around one-third of natural gas is used to generate electricity – some of which you’ll use in your home. Many businesses and industry are transitioning away from fossil fuels including natural gas where it is practical to do so. This leaves even more gas energy available to supply our residential homes with the natural gas they use, for some time yet.
Kiwi homes use only 3.6% of NZ's natural gas
Almost all the natural gas produced in NZ is used by business and industry and in fact - to generate electricity too!
Many industries like the petrochemical industry to make methanol and fertilers, industrial heat processing including paper and pulp mills, and food and processing plants, including dairy; deliver significant economic benefits to New Zealand. They either need a reliable energy supply or to use natural gas in its raw form for processing. Many businesses and industry are transitioning away from fossil fuels including natural gas where it is practical to do so. This leaves even more gas energy available to supply our residential homes with the natural gas they use, for some time yet. Just 3.6% of NZ's natural gas is used directly in our homes! Using natural gas directly in your home - not indirectly through electricity generated using natural gas - you’re helping to ease some of the increasing demand on electricity and contributing to a more sustainable future.
One-third of NZ's natural gas is used to generate electricity
It might be surprising, but when we don’t have enough electricity from renewables to meet demand, natural gas or coal is used to generate electricity to meet the shortfall.
Everyone agrees that renewable energies are great for the planet. Today, around 80% of NZ’s electricity is generated from renewables – mostly water and geothermal. At peak times, like winter, or when lake or wind levels are low, we can’t generate enough to keep up with demand. Renewable electricity can’t easily be stored, so when it’s generated, it is a ‘use it or lose it’ situation.
The case for 100% renewable energy isn’t clear-cut. The infrastructure and investment needed to provide enough renewable electricity to meet peak demand is significant, and at times of regular demand, it would be wasted. For NZ to achieve 100% renewable energy, the amount of renewable electricity generation required would be double in order to meet the demand. The cost impact for Kiwi households could be an additional $225 each month.
A balanced approach, seems best - switching to greener energy options where it is practical and affordable, while using natural gas directly in households; helping to take the pressure off our electricity supply and generate extra electricity when it’s needed.
1% of NZ's total greenhouse gas emissions
Collectively Kiwis use of natural gas to directly power the heating, hot water and cooking in their homes produces less than 1% of New Zealand’s total greenhouse gas emissions.There are around 270,000 households and businesses enjoying the benefits of natural gas piped directly into their homes. Piped directly into their homes, collectively, the natural gas used by these households contributes to less than 1% of New Zealand’s total greenhouse gas emissions. In other parts of the world, less advanced in their journey to using renewable energies, natural gas is also helping to reduce emissions by replacing coal in the generation of electricity or as a direct energy source. With the potential for emerging technologies like hydrogen, and biofuels to decarbonise gas, the level of emissions could reduce even more on New Zealand’s path to a net zero carbon emission future.
Balancing affordability, reliability, and sustainability
Energy in NZ is a delicate balance between affordability, reliability and environmental sustainability. Retaining options allows for a balanced focus without over compromising and allowing for better outcomes.
For instance, if we made our energy system 100% sustainable, we would likely see a big increase in household energy costs. The reason for the cost increase is the need for extra solar and wind generation to ensure enough electricity to power the country at peak demand times. We aren’t able to cost-effectively store excess solar and wind generation yet, so this would also result in energy wastage; while also risking not having enough electricity to meet demand at peak times.
The key is balance, and natural gas has an important role to play in helping reduce overall demand for electricity and keeping energy affordable for everyday Kiwis. Emerging energy technologies will also reduce net carbon emissions and provide alternative clean energy gas sources for the future - watch this space!