Paul Goodeve, Clarus Chief Executive
It’s a confusing time for energy consumers, especially those using gas. We are told on the one hand that our country needs to go 100% electric and that our gas supplies are dwindling. Yet gas remains critical to supporting our country’s variable renewable electricity generation sources – a point that was made crystal clear with the threat of power shortages on the coldest day of the year in early May of this year.
The reality is that gas helps to fill the gap in meeting energy demand when the wind doesn’t blow, the sun does not shine, and when lake levels are low. It supplies over 500,000 homes, businesses, industry and supports electricity generation, which is why it will continue to play a significant role in our energy mix for many years to come. Market forces and prudent government decisions can ensure adequate supply as long as gas is needed.
Electricity shortages are an increasingly common problem in New Zealand and globally, with insufficient generation available to meet peaks in demand. We are seeing an increase in wind and solar generation to meet new sources of power demand, such as electric vehicles and data centres. On one hand this is good for consumers since wind and solar are relatively low cost. However, wind and solar generation are not well suited to meeting demand during the cold, still, and overcast conditions of a New Zealand winter.
Paul Goodeve, Clarus Chief Executive
The low-down on gas
Running in parallel to our power supply challenge is a slower moving problem. For the first time, our known gas reserves are projected to be depleted within the next decade. Our gas fields are experiencing declined production each month and significant investment will be required to boost output back to the levels necessary to meet total gas demand.
So after years of demonising gas and closing gas facilities, we find ourselves in the unfortunate situation of importing coal from Indonesia. With coal emissions roughly double those of gas, no one believes this an ideal way to meet our energy needs – but it’s still preferable to blackouts.
This situation illustrates the importance of investing in a mix of energy solutions, without prematurely restricting existing energy resources. Yes, we need to produce more renewable energy, but not at the expense of constraining gas, before renewable solutions are in place to meet our country’s growing energy needs. The ideal solution for gas is to maintain production while gradually supplementing gas supply with new renewable fuels like biogas and green hydrogen.
Momentum building on renewable gas
New Zealand took a major step towards embracing renewable energy sources with the opening of the country's first utility-scale biogas processing facility in Reporoa, just north of Taupo, last year. Operated by Ecogas, this groundbreaking facility generates enough biogas to meet the gas demand of approximately 7,200 households, and it is set to be connected to the gas grid this winter.
This is the first New Zealand project to tap into a growing interest in renewable gas – gases that don’t produce additional emissions. In the case of Ecogas’ Reporoa facility, much of the gas comes from food waste from Auckland, providing a responsible way to recycle organic waste while at the same time, creating a valuable, storable form of energy.
The opportunity for further investment in facilities like the one at Reporoa is significant. Ecogas has announced that its second plant will be developed in Christchurch, while Powerco is investigating two projects in Manawatū. Industry reports have identified enough organic waste to underpin more than 50 Reporoa-sized facilities, which would see the creation of a network of regional facilities injecting into existing gas pipelines.
Notably, consumers are also supportive of having the option to buy renewable gas. In the 2023 Firstgas Perceptions Survey, 69% of gas users have indicated their willingness to utilise zero-carbon gas.
Gas underpins our country’s electricity generation and is the preferred energy choice for hundreds of thousands of Kiwis. While we work towards a sustainable energy future, gas will continue to play an important role in meeting our country’s energy needs for the foreseeable future.