Solar in a Renewable Based Energy Market

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Solar in a Renewable Based Energy Market

Solar in a Renewable Based Energy Market

It is well known that in New Zealand, energy generation is largely renewable. Around 65% of generation is hydro-based mainly in the South Island and around 15% is geothermal based through the central to the eastern side of the North Island. In the following series of articles, we will look at the pros and cons of commercial solar installations in the New Zealand market. During the last National-led Government, there was little emphasis placed on increasing the uptake of large-scale Solar (with the current Labour-led Government this may change) as it was seen merely as converting from one form of mostly renewable generation to another with little overall benefit to New Zealand’s energy generation emissions. This is because the vast bulk of our thermal based load is only utilised during times of long-term dry weather (mostly during Winter periods) or intermittently when other generators are out for short-term planned or unplanned maintenance. While Solar energy generation has been around for well over 30 years, it has only recently that economies of scale in efficiency and cost have meant that generating energy for photovoltaic panels is a realistic option for some businesses to reduce their reliance on the main transmission and local distribution grids. A recent study published by Statistics NZ and the Ministry for the Environment concluded that sunshine hours are increasing in most areas across the country. However, there are areas throughout the country that have a more natural fit for installing Solar due to a combination of sunshine hours and the costs of energy and transmission and distribution energy pricing. The recently announced ban on offshore oil drilling and gas exploration will have a major impact on the energy requirements of the country. From the generation perspective, Genesis’ Huntly power station will be most affected. While the original Rankine units are expected to be operated through to around December 2022, the newer 400MW combined cycle generator may have an uncertain future. From an end user perspective, food manufacturing will be most greatly impacted by a lack of gas supply or higher costs due to imports which is most likely lead to manufacturing moving offshore or higher prices for consumers. However, I digress, although the above will most likely have a positive impact on the feasibility of distributed generation. Regulatory change and reform have always had a large impact on New Zealand’s primary sectors, and since deregulation of the energy system in 1999, successive governments have used the market for political capital by consistently tinkering and influencing the market. With the upcoming wide-ranging government inquiry into power pricing in New Zealand, the newly created Climate Change Commission and the Transmission Pricing Methodology Proposal one thing is for certain is the constant potential for change.

Cost Savings Stack Up on Electric Vehicles

Cost Savings Stack Up on Electric Vehicles

In this fourth and final article evaluating whether electric vehicles are a fad or the future, I conclude they are indeed the future. I can feel the cold chill of the climate change deniers and petrol heads breathing down my collar as I write. I love a grunty V8 as much as the next Kiwi. But the words, “Show me the money”, aren’t restricted to a Tom Cruise movie. Yes, there are issues around the distance range, price and style options of electric vehicles (EVs). Yes, you will require a three-phase electricity supply if you want to charge your EV in less than eight hours. Yes, we may even see the need in the long term for changes to the way we generate and distribute energy nationally. Yet, despite these reservations, any EMA member looking at replacing their vehicles any time soon would be well advised to run the numbers before succumbing to the team’s demands for yet more heavy metal. The reality about EVs compared to petrol/diesel vehicles is as follows. Electric vehicles are cheaper to run I asked Graham Galliers, a utility analyst at Total Utilities Management Group, to review the fuel costs for my trusty V6 Commodore and compare them to an electric car equivalent. When he sent me the calculation table (below), I checked the numbers over and over. Surely, he had been smoking the wacky baccy? But no. Sober, sensible Graham had not fallen into the arms of a patchouli-scented, hippy femme fatale and joined the ranks of the planet savers. The numbers added up. Even allowing for the assumptions we made around fuel tax, distance range and electricity charges, the economic case behind EVs makes sense today and will progressively improve in the years ahead. The cost comparison for a business use vehicle travelling 15,000 to 60,000 km a year is compelling - based on a price of $2 per litre for petrol, and taking into account an equivalent amount (66.5 cents per litre) for Government fuel taxes, levies and duties. Beyond 60,000km, the numbers get even better, but you do run into range issues that could make a hybrid option more practical than a fully EV option, in the short to medium term. Electric vehicles are, of course, way more expensive to buy than the equivalent petrol vehicle. The associated financial calculations require more time and space than I have here. In each case, a lot will depend on the resale value at the end of the term. I expect electric car prices to fall rapidly as production rises and competitive pressure sets in. At the same time, I expect the residuals for petrol and diesel cars to fall, along with their declining popularity. NZ relies on fuel imports to drive our economy. Yet we are the Saudi Arabia of the Pacific when it comes to renewables like hydro, wind and geothermal energy. Our entire balance of payments deficit would evaporate if we switched to our existing renewables for our vehicles. Oil is the fuel of last century Petrol-powered vehicles will be as relevant to this century as horse and buggies were to last century: 24 million horses in the US when the first Model T Ford rolled into production in 1908, reduced to three million by 1960. China will produce seven million EVs by 2025. Europe, the world’s second largest car producer, will not be far behind. See you at the charging station.

Plenty of power for electric cars in NZ

In this Part III examining whether electric vehicles (EVs) are a fad or really are the future, we consider the implications for the supply of electricity and more. What happens when New Zealand stops importing oil and substitutes it with hydro, geothermal, solar and wind energy to make our cars and trucks work? To start with, New Zealand would move from a current account deficit to a budget surplus. That’s good news all round. Save money on oil, save the planet, sleep easy at night. Except… There are 3.9 million registered cars and trucks in New Zealand. They consume $11.8 billion worth of fuel each year and employ tens of thousands of workers selling, servicing and repairing these vehicles. Electric vehicles on the other hand number just over 24,000. They require much less service and support and the margins for new car sales are so low that most dealers won’t want to be involved with them. So, the move to EVs will place a whole lot of jobs at risk while at the same time requiring a whole new set of skills that may or may not be available in the market. Oil companies, in the meantime, won’t be just sitting around the campfire singing love songs while awaiting the new dawn. Don’t expect too many electric car chargers at your local petrol station. Do expect the price of petrol to fall though. Electricity supply Just how our electricity network will cope, is a key question. Concerned at the vision of transformers exploding, fuses blowing and power cuts making candlelit dinners a less-than romantic interlude, I went to the oracle: Andrew Toop, GM Commercial at Counties Power. I hoped he might ease my fears. He said it’s not as bad as people might think. Andrew said, “Our country’s generation capability is already very substantial and the recent investments by Transpower in new transmission infrastructure gives us a great platform to work off. “Also, efficiency gains from better housing, lighting and insulation choices mean national demand for electricity isn’t growing all that quickly in many regions outside Auckland. “So EVs could make a lot of sense, subject to us paying attention to the basics, like smart local networks, suitable transformers and ensuring the wiring we put in place in our new and existing buildings is up to spec.” Let’s pay attention to some of that underpinning technology.Taking care of the basics New Zealand is a world leader in “ripple switching”, the system lines companies (energy distributors) use to switch hot water heaters on and off when electricity demand peaks around dinner time. This same approach could well be used to balance the load generated by cars being charged when people get home from work. There is also a mechanism called “Time of Use Billing”. Commonly used in commercial settings, we are also likely to see smart retailers automating the management of householders’ electricity usage to ensure that peak loads are managed and that users are getting the cheapest price all the time. Let’s not forget the EV itself. Onboard artificial intelligence already supports safe driverless cars (well, almost). The same smarts could be used to ensure the car charges itself when the price is low, and the power is most available. Speaking of peak demand. You may be surprised to know that our current electricity system only hits peak load a few times each year, in fact, only 0.6 percent of the time. For the remaining 99.4 percent of the time, the system is working well within its capacity. Adding to that, I believe that the Government is subsidising the Australian owners of Tiwai Point to consume nearly 15 percent of our total electricity production, so it appears there is a fair bit of potential headroom to support the emergence of electric cars. New Zealand is, after all, the Saudi Arabia of the wind and hydro world. Why not take advantage of all that cheap, renewable power?

Driving Decisions on Buying Electric Vehicles

Last month’s article on electric vehicles elicited responses ranging from “hippy, coombyah, PC, Greenie horse poo” through to “Where can I get one of these gosh darn, new-fangled, electric buggies?”. Thanks to you all for your feedback. Rather than take sides in the debate about whether or not we should be buying electric vehicles, let’s examine the drivers that inform the decisions we will all make around which vehicles our companies buy. Price Electric vehicles are expensive. Buying electric vehicles today, we can expect to pay BMW prices for Corolla performance. As production volumes rise we can expect this delta to shift to equilibrium. In the meantime, expect FBT to be high on the financial controller’s agenda. Fuel costs Petrol costs around $2 per litre. An electric vehicle equivalent is 30 cents per litre. For the average company car fleet, this is a huge saving. Expect changes though. The government taxes the heck out of petrol and diesel and will likely move to Electric Vehicle road user charges to protect their revenues. If the IRD is true to form you can expect the tax per kilometre to be the same in the future as it is today, regardless of the vehicle type you choose. Resale value Last month five German cities announced bans on diesel vehicles. A court ruling means many others may follow suit across Europe. This has seen the resale price of second-hand diesel cars in Germany plummet as up to 12 million diesel vehicles will be forced off their roads by 2020. We can expect to see residuals becoming a major question for procurement managers as the popularity of second-hand petrol and diesel vehicles declines across the world. Servicing Electric vehicles have around 20 moving parts compared to the 2000 parts we find in the average sedan. This translates into far greater simplicity, reliability and with that, much lower service charges. Expect huge changes in the way new cars are sold and serviced in the years ahead. Lifetime warranties and free service schedules anyone? Finding a trained electric vehicle mechanic might be a trick though. Insurance Insurance companies are looking with a jaundiced eye at the high price of buying electric vehicles and more significantly at the cost of repair. If you prang your $120,000 Tesla there is currently no repair facility in NZ. Your insurer will need to ship your pride and joy to Australia or write it off. That’s a recipe for weeks off the road and higher insurance premiums. Range Assuming you keep the air conditioner off and aren’t stuck in traffic, the average new electric vehicle has a range of around 200kms fully charged. This is less than half the range of an average petrol-powered car. A private car only travels 40kms per day on average and range will get sorted in time. Right now, though, most company cars don’t have the luxury of sitting around in the garage or being stranded on the side of the road. Charging It takes quite a while to charge an electric vehicle, from 30 minutes at a fast charge station through to twelve hours on a single-phase home connection. Add to this the lack of fast charge facilities and questions around just how well our distribution grids will cope with the peak demand of 3 million electric cars charging while we are cooking dinner and the industry faces quite a few challenges. Choice Today there are around 30 new electric vehicle car models available in New Zealand, compared with literally hundreds of petrol and diesel cars. By the end of next year, the number and quality of new electric vehicle car models will rise to over 100 while petrol and diesel choices will fall. Expect this trend to continue. Lack of information Finding unbiased data on electric vehicles is tough and in many cases, the information is contradictory and confusing. One place you can all go for well-presented, easy-to-understand information is the Energy Efficiency and Conservation Authority (EECA). It is biased in favour of electric vehicles but nonetheless, it provides useful facts as you evaluate your options when considering buying electric vehicles. This article is the second part of a series on electric vehicles. Part 1 explored the business case for electric vehicles. Next month I will look at the impacts of putting several million electric vehicles onto an already complex electricity grid. I will also explore the ways our government and our electricity industry is likely to respond to these challenges.

New Branding and New Services

Intelligence without ambition is a bird without wings. Drawing is the honesty of the art. Salvador Dali Today Total Utilities announces its new branding. Over the last 18 years we have worked hard to assist companies in controlling consumption and cost. It's an exciting day for us and we are proud to share this with you. From today you'll see a change in the way we look, including our new ribbon logo. The spherical shape represents the whole as we take a 360 degree approach to understanding our clients and their utility requirements, whether it be Energy, Waste and ICT or Insights, Strategy and Solutions. What doesn't change is our desire to create a sustainable future for New Zealand businesses and how they manage their utilities by continuing to deliver ongoing value for our clients. We continue to work hard to provide new services to assist our clients such as Energy Monitoring and Targeting through wireless non-intrusive energy senors, Cloud Computing Analytics for consumption of computer services and qualitative and quantitative reporting aligned to overall financial strategy. Total Utiltities About Us Presentation We remain committed to delivering a personalised service and assisting our clients navigate a rapidly evolving commercial market place by underpinning strategic thinking. I would like to thank our existing clients for your continued loyalty and confidence in our company. To prospective clients, I hope that you will partner with us to discover real world solutions for sustainable utility consumption and cost optimisation.

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