Batteries and smart appliances could help save NZ’s energy users billions of dollars in energy demand, allowing sectors like road transport to more fully electrify, according to a new report.
The Energy Efficiency and Conservation Authority (EECA) has used an updated model of the whole energy system to understand what the country’s energy use might look like in 2050.
The SMC asked NZ experts to comment.
Emeritus Professor Ralph Sims, Sustainable Energy and Climate Mitigation, Massey University, comments:
“EECA make it clear that their scenarios are not forecasts or predictions but give a “what if?” view of the future. Their outputs depend on the many assumptions used by the modellers regarding rate of uptake of new technologies and behavioural changes that are particularly hard to assess.
“The two EECA Scenarios look forward 25 years to 2050. If an energy scenario had been done 25 years ago in 2001, it would not have accurately predicted the major changes in energy technologies and systems achieved since then.
“Nevertheless, the EECA Scenarios provide an indication on where energy investments should be made in the near-future, with the “SHIFT” scenario giving lower costs, greater efficiencies leading to lower energy demand, and higher emission reduction benefits than the more “business-as-usual” STEADY scenario with LNG added.
“The main conclusions from the SHIFT scenario are to increase flexible energy demand and energy storage in batteries to reduce daily peak electricity demand and thus save costs. This has been verified in the past few days when the very cold weather caused a record electricity demand. Implementing more flexible energy systems and batteries can be achieved well before 2050 and should be ramped up now as the shares of renewable energy used to meet electricity generation, heat and transport demands continue to increase.
“Who knows, but by 2050 NZ could well be investing in hydrogen-fueled vehicles and small, safe and efficient nuclear power plants currently being developed around the world. However, these weren’t included in the scenarios!”
Conflict of interest statement: “I was on the EECA Board 2002 till 2007.”
Associate Professor Michael Jack, Director of the Sustainable Energy Programme and Co-Director of the Otago Energy Research Centre, University of Otago, comments:
“In my opinion the most interesting result from this analysis is the demand flexibility and battery results. These show that demand flexibility provides significant system-wide benefits, beyond simply reducing peak demand. Demand flexibility can enable greater electrification providing significant economic benefits. In contrast, if demand flexibility is not present, high levels electrification cannot be achieved economically. This is a very important result as it show the critical importance of demand flexibility for electrification in New Zealand.
“Furthermore, from my reading of the report, the assumptions around how much demand flexibility will be available in the future are rather conservative. Based on previous research I believe that there is technical potential for quite a bit more demand flexibility than has been assumed in this work. The challenge for the sector is how to create the systems, regulations and markets to realise this potential.”
Conflict of interest statement: “I was not directly involved in EECA’s TIMES 3.0 work, but I have been involved in some of the early consultation work (more than 1 year ago) they did with stakeholders on this project. I am also currently applying for funding to EECA for an unrelated project.”
Dr Basil Sharp, Emeritus Professor of Economics and former Director of the Energy Centre, University of Auckland, comments:
“The Energy Centre in collaboration with business groups created the first NZ version of the TIMES model some years ago so it is pleasing to see TIMES continue to be used. I recall that the last experiment we undertook with TIMES was to examine the prospect of industrial use of green hydrogen in NZ’s energy future. Results showed future potential.
“Results from TIMES-NZ 3.0 are based on two scenarios Steady and Shift. Unless the structure of the model has changed, the model sets out to minimise the cost of meeting the scenario target. Scenario setting is crucial. Among other things, Steady assumes NZ has an LNG plant and Shift assumes speedy electrification. Gas is important for process heat. The model finds electricity and biogas useful substitutes. Was hydrogen not considered as an energy source for industrial use and heavy transport? Green hydrogen is underway in NZ. The cost savings – and emissions reduction – associated with electrification are a highlight.
“We need to bear in mind that these results obtain from predetermined targets – unless the model has changed, demand is determined by the targets. Presumably assumptions in the model transition the economy over time. Assumptions regarding the relative ease and rate at which these transitions occur is crucial. A second cautionary comment relates to the cost of investing in the alternative technologies and the broader implications this has for economic growth.
“Pleasing to see EECA using TIMES. For me, the headline message is electrification.”
Conflict of interest statement: “We developed TIMES NZ at the Energy Centre.”
Dr Isabelle Chambefort, General Manager of Energy, Earth Sciences New Zealand, comments:
“The report is a timely update of modelling New Zealand’s long-term energy transition. The Steady and Shift scenarios will be a helpful way for us to outline the potential pathways we can take to realistically achieve a more sustainable and equitable energy transition.
“The strong dependency on the biomass and biogas in the Shift model is a concern as no pipeline of production is already in place but this could be decreased by a higher use of direct heat from the already announced push for low temperature geothermal energy.
“The model also makes some assumptions around population change, it makes no assessment of where that change will happen, nor the age-structure of that population. The locations of our future population change is important; for example, a large increase in colder South Island conditions (e.g., Queenstown Lakes, Selwyn and Waimakariri districts) will contribute to a very different seasonal energy demand than population changes in the warmer upper-North Island. South Island presently has no meaningful peaking capacity in its generation mix (generation there is near-100% weather-dependant). All peaking in the south is currently dependent upon North Island assets.”
Conflict of interest statement: The expert has declared they have no conflict of interest.
Dr John Kennedy, Chief Scientist of Energy Use, Storage and Materials, Earth Sciences New Zealand, comments:
“The report is a welcomed update of New Zealand’s long-term energy transition using the TIMES-NZ 3.0 model. The comparison between the Steady and Shift scenarios effectively illustrates the economic and environmental benefits of faster technology adoption, with the Shift scenario achieving significantly lower emissions and lower total system costs.
“One of the report’s key strengths is its whole of energy system perspective, highlighting the interactions between electricity generation, transport, industry, and gas supply. The recognition of demand flexibility and battery storage as critical enablers of a highly renewable energy system is particularly valuable. The discussion on the continued role of dispatchable generation for system reliability is also realistic and acknowledges the technical challenges of achieving 100% renewable electricity. However, the treatment of LNG also warrants a broader discussion of long-term energy security, emissions implications, and potential stranded asset risks.
“Finally, additional sensitivity analyses around emerging technologies, hydrogen, long-duration energy storage, and industrial innovation would strengthen the report and provide greater confidence in the robustness of the conclusions for policy and investment decision-making.”
Conflict of interest statement: The expert has declared they have no conflict of interest.
Professor Alan Brent, Chair in Sustainable Energy Systems, Te Herenga Waka – Victoria University of Wellington, comments:
“The release of the revised TIMES-NZ model is particularly timely. Aotearoa New Zealand is at a critical juncture, with decisions made today shaping the trajectory of the energy transition and influencing the future energy system for generations to come. The insights provided by the model will play an important role in informing these strategic decisions.
“Importantly, the high-level results from the scenarios analysed demonstrate that a more rapid transition can reduce overall investment requirements. This includes avoiding the need to import liquefied natural gas (LNG), alongside a range of contributing factors such as declining costs of clean energy technologies, increased availability of technological solutions, and improvements in energy efficiency.
“The modelling approach is also notable for its high level of transparency. The EECA team has made the core modelling files and components publicly available through a dedicated repository, enabling stakeholders to examine the underlying assumptions, test uncertainties, and develop alternative scenarios. From both an education and research perspective, this level of openness is invaluable, supporting greater understanding, collaboration, and informed decision-making across the energy sector, and society.”
Conflict of interest statement: “I don’t have any conflict of interest.”
Professor (Ahorangi) Nirmal Nair, Department of Electrical, Computer, and Software Engineering, Waipapa Taumata Rau – University of Auckland, comments:
“I am underwhelmed with the release of the report commissioned by EECA (New Zealand Crown Entity) along with Advocacy Group (BEC) and its reportage around future energy scenario planning using IEA TIMES framework which is dated. This modelling from BEC first appeared around 2018 before the eve of the passing of NZ 2019 Zero-Carbon Act and had recommended 2060 as the year the business members felt comfortable for their analysis. It appears now that this latest 3.0 version has the blessings of EECA, a crown entity, which I found a bit uncomfortable.
“EECA as an entity was first established in 1992 encouraging energy efficiency across our energy consumption sectors (transport, industrial and electricity). Its scope of activities then was relevant towards promoting clean-car, industrial energy efficiency and efficient use of electricity. Its mandate changed in 2000 by it becoming a crown entity, and in 2017 started operating through levies gathered from our electricity, transport and gas sector. Since then its focus has been dispersed around activities that appear not directly falling in their remit like renewable energy education, solar grants, energy hardship, innovation etc. There were other crown entities like MBIE, Electricity Authority and innovation entities like Callaghan and Ara Ake active in similar activities. As part of the restructuring of our Science System and Crown entities supporting it, both Callaghan and Ara Ake have been retired.
“This latest EECA-BEC report is being released just one month after Transpower (State owned Enterprise) released Te Kanapu – Our energy scenarios which outlines detailed consultation and showcasing infographics around 5 possible future scenarios.
“The New Zealand public at this time needs more authentic, federated and clear information regarding matters of energy and causing confusion by circulating various strategies and scenarios by public entities is a bit jarring.
“An honest conversation about the scope of activities of governance entities around electricity/energy like Electricity Authority, Commerce Commission and EECA needs to be had to ensure that the social sanction and consensus around energy security, resilience and affordability is maintained, particularly during the months before our November elections. We need to be better prepared with being socialized with NZ based credible energy futures, so that all of us can row-together towards a more abundant and prosperous energy future.”
Conflict of interest statement: “No direct conflicts of interest. Current research funding regarding electricity innovation and resilience of energy infrastructure comes from Future Architecture Network, MBIE SSIF and QuakeCore (Te Hiranga Ru – NZ Centre of Earthquake Resilience– TEC Funded CoRE) respectively. Have made independent submissions on electricity infrastructure and markets in the past. Disclosure: Recently supporting as Technical Advisor a Power system AI start-up GRID GPT.”