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Energy from the Earth – Renewable Energy in New Zealand

Sailors for Sustainability Floris and Ivar uncover New Zealand's geothermal energy, revealing its renewable nuances
Energy from the Earth – Renewable Energy in New Zealand
Publ. date 9 Oct 2023
The Sailors for Sustainability, Floris and Ivar, delve into New Zealand's energy supply and learn that the government seems to take the climate crisis seriously. Their goal is to have 100% of electricity generated by renewable sources, such as wind, hydro, solar, and geothermal energy, by 2035. To incentivise renewable energy generation, an emissions trading system has been set up. It currently requires energy companies to purchase carbon credit for each ton of CO2 emitted in a year. At the most recent auction, the credits were auctioned off at NZ$ 36 and that price is expected to rise. Energy generated without CO2 emissions, such as hydro, solar, and wind energy, is not subject to the levy. New Zealand is well on its way to achieve its goal. In the past year, more than 80% of its electricity was generated from renewable sources. Hydropower provided the largest share (58%), whereas geothermal energy supplied 17% of the national energy requirement. All geothermal plants combined generate about 1,000 MW of electricity per year. They wonder how exactly that works, how “green” the energy is and whether its generation can be scaled up. That could help to achieve the government's target and keep up with the expected future growth in electricity demand. It’s time to investigate in situ.

Harvesting Steam

Taupo sits on the shore of a giant lake of the same name, which is the largest freshwater basin in the country. It was created after a series of massive volcanic eruptions, the last of which occurred about 1,800 years ago. The first and largest geothermal power plant, Wairakei, is not far from town. From a distance we can clearly see the power station’s “steam field”. It is where around sixty wells have been drilled in the ground to extract hot water and steam. An impressive amount of metal piping then transports the hot mix under high pressure to the power station further down the valley. What happens there? The nearby Nga Awa Purua power station, the third largest in NZ, is run by energy company Mercury. They are willing to show us behind the scenes at that station.

Location, Location, Location

“It is no coincidence that the vast majority of geothermal power plants are built here in the Taupo Volcanic Zone. We need underground reservoirs with hot water, because that is the energy source for a power plant like this”, Field Manager Michael Stevens explains. “In this area those reservoirs are relatively close to ground level.” Aha, just like we thought. But there is more to it.

What about the land, we ask Michael. “An important aspect of investing in geothermal projects is the development of partnerships between energy companies and Maori trusts. As the first indigenous inhabitants of New Zealand, the Maori often have land access rights to geothermal fields. That was the case here, so we created a joint venture with the local Maori tribe, Ngati Tahu. While this provides economic benefits for them, they also make sure that we are in it for the long term, for the benefit of future generations”, Michael explains. All these things have to fall into place before a field is suitable for building a geothermal power plant.

“This power plant was built in 2010 and has a capacity of 140 MW”, Michael continues. “That means we can supply about 140,000 households with electricity.” The total investment was NZ$430 million, approximately €255 million. It’s a considerable amount, which also includes the costs for sampling the soil and drilling steam wells.

Making Electricity with a Giant Turbine

“The red dots on the map mark the locations of the steam wells. Some are as deep as 3,000 meters”, Michael says, pointing to a map. “That deep?” we ask in surprise. Isn’t the heat much closer to the surface? “Yes, but the underground basins from which we extract a mixture of hot water and steam are much deeper. At those depths, temperatures are around 300 degrees. With temperatures that high, we can generate electricity efficiently.”

To see it all up close, Michael gives us an extensive tour of the plant. He shows that once the mix of steam and hot water reaches the plant through the pipes, it is separated from each other. The steam is used to turn the largest single-shaft geothermal turbine in the world, which generates electricity. That electricity feeds the national grid via transformers. The water is pumped back into the steam field. “That's what happens at the blue dots I showed on the map”, Michael says. “The water is cooler then when it was pumped up, but underground the water heats up again before it flows back into the hot water reservoir. By refilling the reservoir we also make sure that the pressure and temperature of the reservoir remain constant. That’s why the energy derived from geothermal fields is considered renewable.”

Supply and Demand

Despite the considerable investment, we read that the cost per kWh of electricity from geothermal energy is the lowest of all forms of electricity generation. Michael explains why that is the case. “The major advantage of a geothermal power plant as a renewable energy source is that energy production is not dependent on wind and weather. That is why we can produce day and night, all year round. In addition, we run almost constantly at 95% of our maximum capacity. Our energy is therefore very suitable to provide the base load for the grid, meaning energy that is permanently required”, Michael explains. “There are plans to expand geothermal energy in New Zealand in the coming years”, Michael continues. “The reliability of geothermal energy, the high price of electricity, and the government’s ban on new offshore drilling and goal to reduce carbon emissions are the main drivers.”

Is Renewable also Green?

We believe New Zealand's renewable electricity ambitions are impressive and the role of geothermal energy to accomplish that feat is considerable. Yet something is bothering us. The amount of energy and material that goes into building a geothermal power plant is significant. Michael also clarifies that geothermal electricity production is not carbon free. Like the sulphur we smelled in Rotorua, CO2 is present in the underground hot water basins. These and other gases are mixed in the steam when it and the hot water reaches the power plant. After the steam mix is used for turning the turbine, the mix (including the CO2) is released into the air. Still, geothermal energy production is low in emissions (76 grams of CO2 per kWh) compared to energy generation using fossil fuels like coal, oil derivatives, or natural gas. While it may be true that even without the extraction for energy production, the gas mix would surface naturally through cracks in the earth’s crust, it still means that the electricity generated through geothermal energy is not completely green. Mercury also realizes this, the company invested in a forestry programme since 2010 and carbon credits are retired to cover emissions from geothermal generation. The company is also looking into capturing the CO2 and then pump it back into the ground or use it in greenhouses.

Of course, hydroelectric, wind, and solar energy do not release any CO2 at all during electricity production, yet these forms of renewable energy are not CO2 neutral either. Constructing the installations needed, like hydroelectric dams, wind turbines, and solar panels also require raw materials and energy. The most sustainable option therefore remains to save energy. After all, energy that is not needed does not have to be generated.

Time is Running Out

We conclude our visit to Taupo with a bath in a natural hot spring. While we relax in the warm water, we reflect on what we have learned. “New Zealand is leading by example by harnessing its local renewable energy sources. Just as we saw how Denmark makes use of the wind, Norway of water, Scotland of strong tides, and Spain of the sun", Floris summarizes. “The Kiwis prove that we actually don't need fossil fuel-based electricity at all. And that's good news, because according to authoritative scientists, the window of opportunity is closing. We only have about ten years left to drastically reduce our CO2 emissions to keep the climate crisis manageable", Ivar adds. So time is running out. Have you already switched to using 100% renewable electricity yet?

Sailors for Sustainability is formed by Dutch sailors Ivar Smits and Floris van Hees who chronicle their sailing trip around the world in search of sustainable solutions and examples of circular economy thinking. The goal is to inspire their followers with positive cases while raising awareness of the urgency of sustainable change. Using renewable energy sources such as wind and solar energy, they travel sustainably. Finch & Beak is involved as a partner of the project to share the insights gained by Sailors for Sustainability to inspire sustainable business transformation.

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