The MBIE has released their latest update of the Electricity Demand and Generation Scenarios (EDGS) which suggests that prices may remain lower for longer.
New Zealand Electricity Demand and Generation Scenarios
Under the Mixed Renewables projection – which is the base case for the 2016 update – the market would not see average wholesale power prices climb above $100/MWh, measured in 2013 dollars until about 2032. They wouldn’t get above $105 until after 2045. This differs from the 2015 update which projected $100/MW by 2021 and $110/MW after 2035.
Tiwai Turning Off?
Of the most interesting is the “Tiwai off” scenario assuming that the smelter closes at the beginning of 2018 and assuming that oil remains below USD $80/barrel until 2037. The drop in demand would see older thermal based generation such as the TCC and old Huntly units close within 12 months. Some gas-fired peakers would be built in their stead but no further wind capacity would be needed until 2027.
Assuming low GDP growth and demand averages an increase of 0.4% per year, the market would see wholesale prices average $93/MW in 2013 dollars to 2047. In this scenario pre Tiwai off national demand would not recover until 2032.
What you should know about New Zealand Energy Predictions
Other notable projections are:
- 1.35 TWh per year in 2050 coming from the transport sector.
- EV fleet to reach 1.77million by 2040 with 3200GWh of charging demand off set by 1600GWh of solar PV generation.
- 580,000 household solar systems installed by 2050. 66% of systems are likely to have batteries by 2040, by which time solar PV costs are expected to be down to $3.16/W for a 3 kW system, while battery costs are down to $167/kWh.
- A high uptake of solar and EV’s may drive average wholesale prices above $109/MW by 2035.
Further reading can be done here.