100pc renewable generation could wait to the 2040s, Genesis boss suggests

Wednesday, 8 May 2019

Here's how you can help fight climate change by paying to neutralise the carbon emissions you create (video published October 2020).

Genesis Energy chief executive Marc England says he would 'like to believe' the Government's goal of reducing net carbon emissions to zero by 2050, excluding agricultural methane, is achievable.

'I know in our sector there are challenges, I know in other sectors there are challenges, so nothing is ever straightforward. But I think the direction is a good one.'

The company's Huntly power station remains one of the most visible signs of the country's greenhouse emissions and proving stubbornly addictive, with no guarantee its two coal-and-gas capable generators won't continue to burn coal beyond 2030.

Huntly also has another two gas-only turbines on which Genesis hasn't slapped any best-before or use-by date.

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Environmentalists have been protesting about Huntly since at least 2007

In 2016, Genesis back-tracked on a plan to stop burning coal at Huntly by 2018, prompting outrage from Greenpeace.

It said in an NZX statement that it would keep Huntly's two coal-capable turbines available to the electricity market 'until December 2022, an extension of the previously announced closure date of 2018'.

Anyone who read that as meaning that their closure had just been pushed back by four years would probably not be alone.

The National Party's energy minister at the time, Simon Bridges, issued a media release that 'acknowledged Genesis Energy's continuing commitment to phasing out its two remaining coal units by 2022'.

But with hindsight Genesis' statement left some wriggle room and last year it became clear that nothing would necessarily change at Huntly in 2022 either.

England confirms there is 'no commitment on the closure of any units at Huntly'.

'The only commitment we have made is around coal which is to only use coal in abnormal conditions after 2025, and it is our intent to remove coal altogether by 2030, but the units that run on coal can also run on gas,' he explains.

The 2030 target is its 'intent' and not a promise, he makes clear.

National's current energy spokesman Jonathan Young says the company didn't mislead the Government back in 2016, and argues the current Government's ban on approving new oil and gas exploration permits has 'changed the playing field for companies like Genesis'.

England admits that since Genesis was founded in 2000, the company has made only a small investment in new renewable generation.

In 2008, a new hydro generator on the Tongariro River added 1.8 megawatts, or 0.12 per cent, to its total installed generating capacity of more than 1600 megawatts, and Genesis has invested in some rooftop solar generation.

England defends that track record.

'It is not our stated strategy to replace all our thermal plant with renewables by a certain date,' he reiterates. 'We never said we were going to do that.'

That said, Genesis has cut carbon emissions from Huntly in half over the past 10 years as a result of burning less coal there, he says.

Genesis expected to make a contract announcement in the next week or two that would confirm the go-ahead for a new 130MW wind farm nearly Waverely in South Taranaki.

Genesis Energy chief executive Marc England says he would like to believe the Government's 2050 'zero carbon' is achievable.

The company is also offsetting its carbon emissions by planting trees, he says.

'We reckon we are probably the biggest contributor to carbon reduction in New Zealand over the past 10 years.'

England argues that over the next 10 to 15 years the focus should be on reducing carbon emissions by adding more renewable capacity to support the uptake of electric vehicles and to displace the use of fossil fuels in industrial applications.

Two turbines at the Huntly power station can only burn gas, while two can burn either gas or coal.

'Why not do that first and come back to the challenging technical and economic question in the 2030s and '40s of 'how do we move our 85 per cent renewable electricity system to 95 per cent or 100 per cent?'.

'The debate we need to have is over the sequencing of what we do.'

So what would the consequences be if it was decided that climate change was so serious that Genesis had to stop burning fossil fuels at Huntly by 2022?

'If you ignored the economics and pushed that to one side, it would have to be achieved by flooding some more valleys to create more hydro, building more wind and more geothermal,' England responds.

'You would have to be willing to keep the lakes full as much as possible for most of the year and only use hydro when you didn't have wind or some form of renewable.

'It is one of those things that could be technically possible but economically irrational for the economy.'

Burning coal at Huntly created less emissions than the steel industry, or those Fonterra created drying raw milk into milk powder, he said.

Even so, replacing the 'back-up' it provided for the grid would require 'five more Lake Taupos' or '1400 Tesla batteries in every home in New Zealand' or 10 million LPG bottles that could be stored somewhere and drawn on in an emergency, he said.

'That is the scale of the energy storage problem we have to solve.'