Pergamon Renewable Energy, Vol.5, Part I, pp. 658-660, 1994

Elsevier Science Ltd Printed in Great Britain

0960-1481/94 $7.00+0.00

THE PROBLEMS OF ESTABLISHING WIND FARMING IN NEW ZEALAND

K.R. DAWBER

Physics Department, University of Otago, P.O. Box 56, Dunedin, New Zealand.

ABSTRACT

In New Zealand's deregulated economy, wind farming has to be able to be proved to be competitive on an unsubsidized financial basis with existing methods of electricity generation, such as hydro and thermal, before utilities can be persuaded to develop large scale wind farms, even though the wind energy resource is substantial by world standards. It is possible that a policy to reduce carbon dioxide emission will eventually lead to some impetus in the construction of wind farms.

KEYWORDS

Wind energy; electricity generation in New Zealand.

INTRODUCTION

New Zealand has long been recognised by world standards as a windy country (Golding, 1955). Although some of the major locations of population density are in relatively sheltered areas, most coastal sites and elevated inland areas are very windy (Smyth, 1987). Furthermore, due to the generally complex topography, wind enhanced regions such as saddles, ridges and straits are common, the most notable of which are in the Wellington area, the site of the nation's capital and of the first commercial demonstration wind turbine of medium size. This turbine is a Danish 225 kW generator installed initially in 1993 at a gusty site with a 10 ms -1 am'lual mean wind speed. After its initial study period it is likely to be shifted to further sites for research purposes. In spite of this high wind resource, New Zealand has so far looked only towards hydro-electric generation for its baseload of electricity. Sixty-five percent of the installed power capacity is hydro, and 78 % of electric energy is generated from hydro sources. Geothermal sources provide 4.5% and fossil fuel stations, (coal, natural gas and oil) provide the remaining 17.5% (Electricorp Production Report, 1991).

PRESENT SITUATION OF CONSUMPTION, PRICING, DISTRIBUTION

Nearly all electricity is at present generated by ECNZ, a "State Owned Enterprise" or SOE, and distributed by Trans Power NZ Ltd, also an SOE. Electricity is delivered to consumers by regional marketing utilities who mainly buy the electricity from ECNZ although a few do generate a little themselves as well. The regional utilities are separate companies each with shareholders. In some cases the local council is the only shareholder while in other cases many of the shares are traded on the NZ Stock Exchange and available for anyone to buy. While domestic consumers have to purchase their electricity from their local utility, some large industrial consumers can ask utilities to compete to supply them and use Trans Power NZ Ltd to deliver the power to their region.

Utilities purchase their power from ECNZ essentially on two scales. The baseline scale for guaranteed

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consumption is at an agreed to price for the maximum load each quarter of a year. Additional electricity is then purchased as required on the spot market scale at prices which vary from as low as (NZ)2 cents per kWh during sumrner nights to about (NZ)18 cents per kWh for those winter periods when the hydro storage lakes are low. (At the time of writing this paper $(NZ)I.00 = $(US)0.56.)

Unlike many industrialized countries, the domestic electricity consumption in NZ is proportionally very high at about 40% of the total, while 50% is consumed by industrial and commercial users and 10% is lost in transmission. Electricity is the preferred form of energy for domestic water and space heating, and for cooking. While the domestic price of natural gas in the North Island is about (NZ)4 cents per kWh compared to 9 cents per kWh for electricity, the South Island domestic gas price is about 15 cents per kWh compared to 8 cents per kWh for electricity. Monthly line charges for electric grid connection and delivery charges for piped or bottled gas are additional. Reduced electricity rates for ripple-controlled hot water heaters, night storage heaters and general night-time domestic consumption is available from most distribution utilities. Standard commercial rates for electricity are a little higher than the domestic rate but special arrangements are made with very large consumers. Some special consumers, such as churches and sports clubs, and also domestic consumers who are a long distance from strong grid connections, pay much higher than average rates.

POSSIBLE FUTURE TRENDS IN CONSUMPTION

New Zealand's population of 3.5 million people is slowly rising. The main natural gas supply is expected to run out about the year 2020. Particularly in the south of the country people are tending to heat their houses to a better standard. There is strong governmental pressure for the country to become more industrialized. These four aspects of life in New Zealand will all contribute to an increasing demand for electricity. While efficiency gains in heating by the use of heat pumps and better insulation, and in fighting by increased use of fluorescent tubes rather than incandescent bulbs will tend to reduce the per capita consumption, other changes such as replacement of petrol lawn mowers by electric mowers, greater use of deep freezers, and electrification of the railways will tend to counteract these reductions. With the completion of one of the largest hydro-electric power stations in the country at the beginning of this year, there is not an urgent need for further major generation capacity, but by the end of this century there almost certainly will be. This latest hydro station will produce electricity at a very much greater cost than the existing stations, and it is expected that while there are many potential hydro sites which have been identified (Mills, et.al, 1990), most will have very serious environmental impact and much greater costs associated with them than previous developments. It is for this reason that wind is being seriously looked at as a major source of electricity, but until now the progress at getting started has been very slow, with many obstacles being put in the way of potential developers.

THE POTENTIAL TO SUPPLY ELECTRICITY IN NZ FROM WIND

Because the precipitation and melted snow run-off pattern varies throughout the year and is appreciably different from year to year, the electricity grid distribution system has had to have an appreciable over- capacity built in to allow for such variations. Although some lakes can be allowed to vary their energy storage by fairly large amounts, others have very strictly defined ranges of levels for environmental protection. The total installed generating capacity of the hydro system is 4.719 GW with an average plant factor of about 55%. Thus if it were decided to supplement hydro with 20% from wind then the potential installed capacity could be stated to be 0.94 GW. Assuming a lower plant factor for wind (or "capacity factor") of typically 25% in New Zealand's high wind regimes, then perhaps this could be increased to 2.07 GW, or about 6900 wind turbines of 300 kW each.

The wind resources in New Zealand have been documented in the "Wind Energy Resource Survey" both on a national basis and in the cases of Otago and Canterbury regions, on a local basis, and reports published by the NZ Energy Research and Development Committee over the years 1974-88; (see Dawber, 1988 for detailed references). The data has been analysed further and added to from unpublished information collected by ECNZ particularly from the North Island. A recent publication (Eden Resources, 1993) gives the potential annual output from a total of twelve nominated windfarm sites throughout the country as 12 656 GWh per year, which represents 1.44 GW average power or 5.76 GW installed capacity assuming a 25% capacity factor, i.e. more than the existing hydro capacity. Thus there can be little doubt that there is a great potential for wind power development in New Zealand.

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REVIEW OF THE MAJOR PROBLEMS OF INSTALLING WINE)FARMS

Economic

Commercial wind farming is still conceived to be uneconomic by ECNZ although they estimate that increasing generation costs by other means in NZ and falling wind energy costs are likely to make wind economically viable somewhere in the range of 3 to 12 years, (ECNZ, 1993). ECNZ must be credited with installing New Zealand's first medium sized commercial wind turbine, but they regard this as a demonstration and research exercise to show that the method is engineedndy viable. It is hoped that private or public companies will now enter into the field and start wind farming. Unfortunately, such companies will have to compete on the open market with the existing producers of electricity under the terms summarized above. As the earlier developed hydro stations can produce electricity so cheaply, new wind farms have to find markets closely correlated with the high wind periods when they can sell all of their product at a good profit, to carry them through the cheap periods on the spot market. Up to the present time, backers appear to be unwilling to finance large wind farms under these conditions, without the sort of government regulations which have existed in some EC countries and in California for the purchase of wind generated electricity. The labour costs appear to be too high for small farms unless they have research fund backing, and at present this source of funding is very small. Thus no recendy proposed developments have been able to start.

Implementation of Carbon Dioxide Emission Control Policy

New Zealand has a policy of aiming at reducing its year 2000 carbon dioxide emissions to 80% of the 1990 emissions, and the Ministry for the Environment is at present looking at ~ y s of achieving this. As about 20% of CO2 emissions at present come from fossil fuel burning for electricity generation, an obvious way of achieving the goal is to substitute this with wind farming. Again, however, the lack of government regulations is a major problem. Furthermore, there appears to be a move to sell at least some of the thermal plants to private enterprise, who obviously would not want to have them immediately shut down.

Education

At present, there appears to be a complete lack of understanding of the environmental and financial implications of further land flooding for hydro development amongst people in power, although there is much general public support for wind farming. One encouraging development is the award just announced by the Ministry of Research, Science and Technology to a school-teacher, Dr D J Redshaw, to collaborate with the author to produce an educational book on all aspects of renewable energy in New Zealand.

Local versus imported technology

Initially, for small orders or one-off machines, it is unlikely that any NZ manufacturer would be able to produce a suitable turbine at an economic price. However for a large order, for a viable wind farm, it is another matter, provided such a manufacturer could get started. Thus if "enterprise capital" becomes available, then wind turbine manufacturing is a possibility for New Zealar£l. However without it, it is likely that most technology will have to be imported.

REFERENCES

Dawber, K.R. and Edwards, P.J. (1988) Wind Energy Resources in Otago and Southland, NZ Energy Research and Development Committee Report No. 160. NZ Mir_istry of Commerce, Wellington NZ. ISSN 0110-1692.

ECNZ (1993) Wind Energy Programme - Status and Future Developmen: , Technical and Development Group, Wellington, NZ.

Electricorp Production (1991) Report, ECNZ, Wellington NZ. Golding, E.W. (1955) The Generation of Electricity by Wind Power, Spon. Mills, G.W., Aspden, R.J. and Stewart, R.E. (1990) Hydro Resources of New Zealand, NZ Ministry

of Commerce, Wellington NZ. Smyth, V. (1987) Wind Energy Resource Survey of New Zealand - Phase 1:- National Survey Using Existing Data, NZ Energy Research and Development Committee Publication P114. NZ Ministry of Commerce, Wellington NZ. ISSN 0110-5388.