A rapid expansion of flexible energy use and batteries could give consumers up to $20.8 billion of savings over the next 25 years, Energy Efficiency and Conservation Authority (EECA) and BusinessNZ Energy Council scenario modelling predicts.
Released on Friday, the modelling from the TIMES-NZ 3.0 report suggests rolling out flexible technology use, giving the example of hot waters cylinders that are able to lower their use for short periods, could save money for users.
EECA chief executive Marcos Pelenur said batteries and other technologies that enable flexible electricity use, including smart home appliances that can shift demand on the electricity grid away from peak periods, “become even more important as New Zealand moves to higher rates of renewable electricity generation.”
The report modelled two scenarios after discussions with a range of stakeholders including government, energy companies, energy users and organisations, to look at; “future energy demand from large users, the pace of technology change, climate policy and societal trends, and the future role of gas.”
Scenario one – the ‘steady’ scenario, looked at moderate change, more primary production, moderate cost reductions in renewable energy, more car use and a LNG terminal.
Scenario two – the ‘shift’ scenario, had more growth in advanced manufacturing, data centres and renewable-powered industry, faster cost reduction for solar, wind and EV batteries, lower private car use and higher carbon prices.
The total energy demand fell in both scenarios. In steady, it fell 10% by 2050 and in shift it fell 22%. It also predicted a drop between $5.4b to $20.8b in user costs to 2050 through using flexible electricity use.
The shift scenario’s emissions were less than half of the steady scenario, with road transport electrification the largest driver of related emission reductions.
“The total cost of meeting energy demand from 2023-2050 is roughly $1.3 trillion, or approximately $45 billion annually,” EECA said.
“For context, this is roughly 11% of annual GDP, which was $393 billion in 2023. However, costs in the shift scenario are roughly $42.7 billion lower than in steady across the whole model period (2023-2050), or $1.6 billion lower annually. This is because of lower clean technology costs, more available technology, and greater energy efficiency.”
Victoria University’s Professor Alan Brent, chair in Sustainable Energy Systems, told the Science Media Centre (SMC) New Zealand was “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.”
Massey University sustainable energy Emeritus Professor, and former EECA board member, Ralph Sims said the scenarios were “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,” Sims said.
“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.”
Sims told the SMC that the scenarios still provided an indication on where energy investment should be made in the near future.