Renewable energy target 'unrealistic'

It is unlikely New Zealand will reach its goal of making electricity 90 percent renewable by 2025, industry insiders say.

The push for 90 percent was devised by the previous Labour government and adopted as a target by the National-led administration. The current level is 80 percent.

But the plan looks like it may fall victim to economic reality and could undermine New Zealand's ability to meet its pledges under the Paris Climate Change Accord.

Under the 90 percent goal, polluting coal and gas fired power stations were supposed to be replaced with wind farms and geothermal bores.

That has already happened to some extent, but progress is slowing.

Veteran electricity manager and consultant Toby Stevenson said New Zealand could reach 90 percent renewable electricity if all plants on the drawing board were actually built, but he did not think that would happen.

"It is highly unlikely that that we will reach a level of 90 percent renewable electricity by 2025," Mr Stevenson said.

Also sceptical was Greg Sise of the consultancy firm Energy Link.

"Based on our latest forecast of demand growth and the mix of new plant being built, it (the 90 percent goal) is very unlikely to occur," he said.

Environmentalists, however, say the 90 percent target is an easy target, and New Zealand should really push for 100 percent.

Further support for a 100 percent target is expected to come this week in a new report by the Royal Society.

But aiming for 100 percent alarms New Zealand's largest electricity producer Meridian Energy.

Chief executive Mark Binns told a recent seminar that it was completely unrealistic.

"We should not just automatically think that renewables are always the answer in every situation.

"We have about 55 percent of our generation as hydro so you have to have something that you can turn on when it goes dry."

While Mr Binns did not think a 100 percent target could be achieved, he did not fault the 90 percent target.

But Mr Sise said even 90 percent was unrealistic.

"Our modelling would show that we [will] only get to about 84 percent by the end of next decade.

"When you look at it in the hard light of day 90 percent is unlikely to happen by 2025."

Mr Stevenson argued a 90 percent target was easy to talk about but did nothing to actually compel electricity companies to open their chequebooks and start building.

"There are a lot of renewable projects that are consented, but we know that a lot of those consents will expire.

"We also know that a lot of those projects will not be economic, and prices will have to move quite a lot for the bulk of the projects to start to be economic.

"There is nothing binding or compelling about the target that would make an investment decision any more likely."

Meridian Energy has taken some steps to address these problems, by extending the life expectancy of resource consents for wind farms that would otherwise expire.

But a senior executive, Neal Barclay, told a recent conference that actually building the wind farms would come later, possibly in five to six years from now.

In other words, it could be 2021 before new renewable plants are installed, leaving as little as four years for New Zealand to climb to 90 percent.