Powering into the future

As New Zealand ramps up its oil and gas exploration and invests in emission-intensive transport infrastructure, a new report shows the world is already paying a high social and economic price for its continued reliance on greenhouse gas-emitting fossil fuels. Bruce Munro looks at present and potential future impacts of our energy system choices.

New Zealand has hit the ground running when it comes to future energy needs, the Government says.

Dr Janet Stephenson agrees, but for quite different reasons.

Last year, we as a country used 817.75PJ (petajoules) of energy - enough to light 259 million 100W lamps for 12 months - to do everything from powering our industries and getting products to shops, to heating and lighting our homes and driving to the beach at the weekend.

• Green power out of the blue...

And we are going to need more of it.

The Ministry of Economic Development's (MED) latest projections are that energy demand will grow by about 1% a year for the foreseeable future.

But, fortunately, we have plenty of energy sources to draw on, the Government says.

Whether it be hydro, oil, gas, wind, coal, geothermal or solar, New Zealand has a distinctively wide variety of ways to generate the power that will be needed.

By 2030, renewable energy sources such as hydro, geothermal and wind will be generating 90% of our electricity and more than 50% of our total energy needs. Fossil-fuel demand will continue to increase in the transport sector in the next two decades, but it is hoped new oil and gas finds will more than quadruple royalties to $12.7 billion, making the country a net exporter of oil by 2030.

So that is the future for which New Zealand has already set sail.

During last year, wind electricity generation increased 19%, and 52 oil and gas exploration and development wells were drilled. New energy technology research is being funded and about $36 million is being spent this decade on transport infrastructure, particularly new state highways.

The overarching goal, the Government said in its energy strategy released last year, is "to grow the New Zealand economy to deliver greater prosperity, security and opportunities for all New Zealanders".

The aim is laudable. But there is a dark lining to this silver cloud - greenhouse gas emissions.

In 2011, New Zealand's greenhouse gas emissions from energy were 31% above 1990 levels. This despite the country, as a signatory of the Kyoto Protocol, having a target of reducing greenhouse gas emissions to 1990 levels by this year.

Road transport emissions, which are 70% above 1990 levels, are one of the main reasons New Zealand has had one of the largest increases in energy-sector emissions of the 41 countries that have signed up to the United Nations Framework Convention on Climate Change.

We did have a 1.9% drop in energy-sector emissions between 2010 and 2011, although that was mainly due to reduced demand for gas-generated electricity. In fact, the MED anticipates energy-sector emissions could be 40% above 1990 levels by 2030.

All of which becomes more than a little disturbing when the latest warnings about the economic and social impacts of fossil fuel-driven climate change are taken into account.

Since at least 2007, the International Energy Agency (IEA) - an authoritative and conservative intergovernmental organisation that advises member states on energy issues - has been drawing attention to the growing threat of climate change and calling for countries to quickly adopt "clean energy" systems.

In August last year, IEA chief economist Dr Fatih Birol warned governments: "As each year passes without clear signals to drive investment in clean energy, the "lock-in"of high-carbon infrastructure is making it harder and more expensive to meet our energy security and climate goals."

And in June this year, promoting new clean energy technologies that are available, IEA executive director Maria van der Hoeven asked: "...when will governments wake up to the dangers of complacency and adopt the bold policies that radically transform our energy system?"

These dangers were itemised a fortnight ago in the Climate Vulnerability Monitor. Written by more than 50 scientists, economists and policy experts, and commissioned by 20 governments, the Monitor says climate change and the world's carbon-intensive economy are already responsible for five million deaths a year and that failure to address these issues is costing the global economy NZ$1.47 trillion annually, equivalent to 1.6% of global gross domestic product (GDP).

Left unchecked, by 2030 they will be causing six million deaths a year and stripping more than 3% from annual global GDP, the report says.

Rounding out the grim picture, Prof Lord Stern, of the London School of Economics, has said global warming of more than 2degC would "disrupt the lives and livelihoods of hundreds of millions of people across the planet, leading to widespread mass migration and conflict".

So why is New Zealand steering its particular course?

Sometimes, it is hard to get politicians to talk.

In the past fortnight, the Otago Daily Times has put questions about New Zealand's energy plan, in relation to climate change, to Minister of Energy and Resources Phil Heatley and Minister for Climate Change Issues Tim Groser.

Mr Heatley's office referred the newspaper to various government documents and said some of the questions should be directed to Mr Groser. A spokesman for Mr Groser answered on his behalf.

Putting it all together, the Government's reasoning appears to be a combination of "we can't", "we shouldn't" and "we won't until someone else does".

Announcing the country's energy plan in August last year, then acting Minister of Energy and Resources Hekia Parata said New Zealand was "blessed with an abundance of energy resources" and needed renewable and non-renewable energy sources to meet future energy demand.

"We can't just turn off the tap in our journey to a lower carbon economy," Ms Parata said.

That energy plan, The New Zealand Energy Strategy, argues tapping into our rich petroleum and mineral resources is an opportunity we should not miss.

Not only will it benefit us, but it will "contribute to global energy security", the strategy states.

And Mr Groser's spokesman said the Government would reduce greenhouse gas emissions to between 10% and 20% below 1990 levels by 2020 "if there is a comprehensive global agreement".

"The Government has not yet made a final decision on its 2020 target, and international negotiations are ongoing," the spokesman said.

Dr Janet Stephenson, who is director of the Centre for Sustainability: Agriculture, Food, Energy, Environment (CSafe) at the University of Otago, sees it quite differently.

Dr Stephenson argues not only is a rapid transition to clean energies imperative from a global standpoint, but it would probably also be a boon for New Zealand.

"My ... vision is for New Zealand to be at the forefront of a system-wide change to a low-carbon future," she said.

Such a large transformation - on the scale of the Industrial Revolution - would entail adopting new technologies in homes and businesses; widespread use of new forms of energy; changes to law, policy and investment priorities; new urban forms; and, "underlying all of this, a shift in the way people think about energy in their everyday lives".

"This change is possible, but only if all parts of the system are reconfigured to align with a low-carbon future."

New Zealand is well-placed to make this leap, Dr Stephenson says.

"We have the [energy] resources, the skilled workforce and the nimbleness to shift the way we do things."

And the payback could be considerable. As well as reducing our dependence on energy sources approaching their use-by date, and shoring up our internationally valuable "clean, green" image, being early adopters of a low-carbon energy system could make our experience and knowledge a sought-after commodity.

"We have the potential to be world-leading in showing how renewable energy, energy efficiency, demand-side technologies, smart grids and people can work together to achieve the energy-environment revolution."

But time is running out, the IEA warns.

If decisive action is not taken by 2017, any new energy-related infrastructure built after that time will push greenhouse gas emissions above the threshold set to limit global warming to 2degC.

"Delaying action is a false economy," the IEA's Dr Birol says.

"For every $1 of investment in cleaner technology that is avoided in the power sector before 2020, an additional $4.30 would need to be spent after 2020 to compensate for the increased emissions."