Why New Zealand Never Needs to Build Another Clyde Dam

Article by

Lewis Verduyn
October, 2011

Clutha River Forum PO Box 124, Lake Wanaka 9343, New Zealand cluthariverforum@gmail.com

Luggate? Queensberry? Beaumont? Tuapeka Mouth? These are the large dam options on the Clutha River that are currently being investigated by Contact Energy. But we can scrap all these dam plans, and better still, we can avoid having to build any more large dams in New Zealand - by using negawatts that are already generated. Nega-what? A negawatt is any watt of electricity that can be gained through energy efficiency. More than a quarter of the electricity generated in New Zealand is wasted as negawatts that can be cost-effectively captured with efficiency strategies. So, imagine that New Zealand needs another Clyde dam another 432 megawatts, and you know that there are already 432 negawatts equivalent of available electricity in the network that can be extracted for a fraction of the cost of a new dam, then why would you build a new dam? Those 432 negawatts are not only cheaper to get, but are faster to deploy, and they have none of the negative impacts of a large dam. Now, consider that there are at least three Clyde dams available for deployment, waiting in the network to be called in, and that with present efficiency technologies, there will be a surplus of Clyde dams until 2030 and beyond. But there must be a catch. Where do we find those negawatts, and how do we get them? Negawatt resources - the last cheap energy in the world Its a well known fact that vast amounts of electricity are wasted worldwide. A study by the McKinsey Global Institute found that energy efficiency could cut global energy demand in half by 2020,1 and the UN Foundation has estimated that energy efficiency can supply most or all of the electricity demand growth through to 2030.2 Beyond that, according to a 2011 report by the WWF, sustained efficiency can lead to energy surpluses from around 2040, reaching 15% by 2050.3 New Zealand squanders electricity like theres no tomorrow, and always has. A 1989 study by Electricorp estimated that the total amount of electricity wasted in New Zealand was as high as 57 percent.4 More recently, in 2007, a major international energy consultancy, KEMA, concluded that our residential, commercial and industrial sectors waste 23 percent5 of our electricity, but that figure was peer reviewed by New Zealands National Energy Research Institute (NERI) and judged to be conservative.6 Based on that assessment, it would be reasonable to add a modest 10 percent to the KEMA figure, which would bring us to 33 percent in other words, at least one-third of our electricity is wasted. If the present transmission and distribution losses of 7.5 percent7 are included, our wasted electricity exceeds 40 percent. Over the years, New Zealand governments have made half-hearted attempts to capture some of those wayward negawatts, but our achievements have been consistently disappointing. Why?

To be blunt, our electricity market, our electricity regulations, and our electricity consenting processes, all ignore the fact that energy efficiency is the easiest, cheapest, fastest way to add generation capacity. And thats not very smart. Alright, lets be honest its completely nonsensical. All those negawatts are the cheapest energy left in the world.

Average cost of efficiency compared to other options.

Overseas figures put the cost of meeting demand through efficiency measures at anywhere from one-fifth to half of the cost of building new generation. Moreover, there are numerous flow-on benefits. All the negative impacts of unnecessary power plants and transmission capacity can be avoided. Landscapes need not be carved up and rivers need not be destroyed. All types of generation replaced by negawatts represent avoided emissions. Its not just fossil-based electricity that produces climate wrecking CO2. Large dam hydropower, for example, has life-cycle emissions that are two-to-six times higher than the equivalent wind-power.8 9 Whether your objective is to save money, or the environment, you simply cant do better than choosing efficiency as a first option. But in New Zealand, energy planning suffers from a fundamental conflict of interest. You cant sell more electricity, and less, at the same time Our public policy goal use less through energy efficiency and conservation, is at cross purposes with our electricity market sell more because profits are tied to the volume of sales.
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Its a tug-of-war. The government pulls one way toward its energy efficiency targets, and the power companies pull the other way toward their revenue forecasts. The power companies are winning. The power companies have some heavy-weight 'grow-and-build' training on their side. Todays conventional 'grow-and-build' electricity business model is a legacy of the 20th century, when growth came first.10 Last century, when the electricity grid was being developed, it was always more important to sell as much electricity as possible in order to finance expansion, and the easiest way to boost profits was - and still is, to raise prices. As a result, production, consumption and construction dominate our electricity industry. Meeting demand through investment in efficiency, although cheaper than building new plant, is not the first priority. This is remarkably odd, but the short explanation is that the 'grow-and-build' operating mode of our power companies, combined with our wholesale electricity market, locks in business as usual. Ideally, we need our public policy and our power companies to pull in the same direction. The most accepted mechanism to achieve this is revenue decoupling, which breaks the link between profits and the volume of sales. Decoupling removes critical barriers to investment in energy efficiency, simply and effectively eliminating a power companys throughput incentive, while stabilizing consumer power bills, and reducing the overall level of financial risk that power companies and their customers face.11 The decoupling mechanism also stops quantitative growth by default, putting the brakes on expansion and the focus on cleantech solutions. As such, it represents an essential paradigm shift away from our impossible growth-based economy towards a sustainable future. Decoupling sets a green energy agenda. Potential electricity savings vs projected demand growth So if New Zealand decided to get serious about energy efficiency, by adopting decoupling and related efficiency drivers,12 how would the electricity savings stack up against the projected demand? New Zealands total generation capacity is currently around 9,100MW (megawatts),13 compared with a daily peak demand of about 6,500MW.14 Our electricity consumption is around 40,000GWh (gigawatt hours) per annum. Demand growth (peak) has averaged 1.6% per annum since 1990, and is forecast to slow slightly to 1.4% during the 2010 to 2030 period.15 That equates to about 91MW of additional capacity (peak) needed each year.16 Note that the Clyde dam generates 432MW, or an average annual production of 2,100GWh.17 The 2007 KEMA study concluded that New Zealand has significant untapped achievable and cost-effective potential savings for electricity in all sectors. Costeffective electricity gains were found to be about 6,400GWh per year, while the costeffective peak demand gains were about 1,740MW.18 The net benefits were estimated at about four times the cost,19 which means that investing is energy efficiency is highly profitable. With these first savings, there is no reason to build another Clyde dam (2,100GWh). In fact, an initial gain of about 6,400GWh means that we can scrap plans for the equivalent of three Clyde dams. Thats much more than the combined generating capacity of the proposed Luggate (500GWh), Queensberry (850GWh), Beaumont
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(1,070GWh), Tuapeka Mouth (1,950GWh),20 and Mokihinui (420GWh)21 dams combined (4,790GWh). Obviously, finding additional capacity soaks up future electricity demand for a number of years. How many years? Potential cost-effective peak demand savings of 1,740MW, divided by projected yearly demand growth of 91MW, equals more than nineteen years of added capacity. But weve only considered the easiest savings to 2016. Improving technologies keep increasing the gains, and the KEMA study was judged to be conservative, anyway. We must also take into account that a further 2,901MW are already consented, as of February 2011,22 with 946MW under appeal, leaving a reliable 1,955MW, which given the same calculation is sufficient to meet electricity demand for some twenty-one years. So when we combine this with the initial negawatt savings - providing about nineteen years, the new generation horizon is pushed beyond 2050. And remember, weve only just started. The negawatt harvest begins with the low-hanging fruit There are ample temptations in the KEMA study, which concluded that potential savings by 2016 in the residential sector are 2,633GWh (1,235MW), in the commercial sector 1,849GWh (239MW), and in the industrial sector 1,955GWh (264MW).23 So where do we begin the harvest? The easiest efficiency gains have been described as the low-hanging fruit, because they are within reach using existing technology, and can be picked off without much effort. The Energy Efficiency and Conservation Authority (EECA) has estimated that, by using no-cost or low-cost measures,24 New Zealand households can easily save 10 percent on electricity bills,25 while our businesses can save at least 20 percent, and a further 10% with some modest investment and payback in 1-5 years.26 So where do these obvious savings come from? According to the Ministry for the Environment, standby power alone uses around 10 percent of an average households electricity.27 EECA has calculated that most New Zealand businesses could cut 40 percent off their electricity bills for lighting.28 The KEMA study found that if every household used efficient lighting, New Zealand could reduce its total annual energy consumption by 10 percent. The low-hanging fruit is everywhere. For example, computers waste about 50 percent when used without power management features.29 We can get back that power, and money, by enabling energy saving modes. New Zealand already has more computers than people, and by 2020 we will have about 11 million computers.30 Undoubtedly, some of the low-hanging crop is already being harvested. How much of the negawatt resource can be tapped? But when all of the easy savings are gone if thats even possible, where do we go next? How much of the negawatt resource can be tapped? Fortunately, since innovation and ingenuity keep moving the goal posts, we only have to keep looking. The more we look, the more opportunities we find.
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So its important to update energy standards regularly. For example, California has achieved dramatic energy savings, half of which are due to building and appliance standards that are revised upward every three years.31 Improved appliance standards in the US have saved 130,000MW per year through more efficient refrigerators alone, and have avoided the construction of 300 power plants, saving US$42 billion a year.32 In the US, some companies have discovered that there appears to be no end to the savings that can be made, if they keep looking. The experience of Dow Chemicals Louisiana division is a prime example.33 In 1981, the division began a yearly contest to identify and fund energy saving projects. Some improvements were obvious, like more efficient motors and compressors, but other changes were more complex, like capturing wasted heat. The contest had 27 winners in the first year, requiring an investment of US$1.7 million, with an average annual return on investment of 173 percent. The sceptics thought that the ideas, and the gains, would diminish. They were wrong. The 1983 contest had 32 winners requiring an investment of US$2.2 million, yielding a 340 percent return, saving US$7.5 million in the first year and every year after that. The gains continued to grow through the 1980s. The average return for the 1989 contest was 470 percent, saving US$37 million a year. Ten years and nearly 700 projects later, the 2000 Dow employees are still saving energy and money. The contests in 1991, 1992 and 1993 each had over 120 winners with an average return of 300 percent, amounting to US$75 million a year.34 Across all sectors, prolonged efficiency programmes have achieved reductions in energy use that are not flat; instead energy efficiency has grown at exponential rates, defying the law of diminishing returns which must eventually kick in. What this reveals - apart from the fact that energy waste is epidemic, is that we have a long, long way to go, and that gains do not stop until, well, innovation stops. Even if that happened, efficiency failures can be caught again and again. The never-ending harvest of continuous commissioning In 1992, the Energy Systems Laboratory in Texas established Continuous Commissioning, an ongoing energy optimization process for buildings that achieves long-term savings through monitoring and follow-up commissioning.35 The CC process has been implemented in over 300 buildings around the world, has produced US$90 million in savings for an investment of US$13 million, with average energy savings of 20 percent,36 and paybacks usually within two years.37 Energy savings can be as much as, and often more than, those gained from a prior efficiency retrofit.38 Continuous Commissioning was introduced at the Reserve Bank in Wellington in 2008 with impressive results. The building was already outperforming the industrys benchmark by around 30 percent, and yet a project team identified and implemented 28 different system optimization opportunities, achieving a further 22 percent in savings, with a 14 month payback.39 The annual savings are projected to double by 2012, and during the three years CC has been running, 152 tonnes of CO2 emissions have been avoided.40 The CC process is also known as Building Management Systems (BMS) Tuning, Optimization and Efficiency, and is applied across domestic, commercial, industrial
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and institutional users. These services are rapidly evolving to satisfy a market hungry to reduce energy costs. The potential gains from repeat negawatt harvesting are staggering. The higher fruit requires more effort to reach, but like the low fruit it can be picked off again and again. Energy efficiency is not a one-harvest exercise because efficiency technologies keep growing, fixed systems decay, and because human ingenuity has no limits. So much energy used by so few When it comes to industrial energy consumption, New Zealands situation is remarkable, because so much is used by so few. This presents an enviable opportunity for both the industrial sector and the government. Potential electricity gains are vast. In New Zealand, according to the Major Electricity Users Group (MEUG), about 30 percent of our electricity goes to just 22 industrial users. Some of these companies are: Rio Tinto (5,000GWh), Norske Skog (1,300GHW), Carter Holt Harvey (1,105GWh), New Zealand Steel (1,045GWh), Pan Pac Forest Products (550GWh), Fletcher Building (454GWh), Winstone Pulp (330GWh), and New Zealand Refining (235GWh).41 In total, the 22 members of MEUG consumed 10,763GWh in 2007, about 1,200GWh of which were self-generated, leaving an annual load of at least 9,500GWh.42 According to the Electricity Authority, in 2010, Rio Tinto used 6,000GWh, or 15 percent of New Zealands electricity supply.43 Incredibly, in November 2010, the New Zealand Electricity Authority reported a target of achieving just 140GWh annual electricity savings from all our industrial users within ten years.44 Energy in the 21st century an end to false economics? Waste is an implicit bi-product of a culture that conveniently ignores the obvious fact that growth can not be sustained by extracting limited natural capital indefinitely. Once abundant energy resources, primarily fossil-based, but also hydroelectric, have been exploited under a prevailing ideology of growth at any cost. If we continue to depend on burning fossils that ruin our climate, and building dams that ruin our rivers, we remain engaged in a dead-end game of limitations and grim consequences. When borrowing from the future, someone, some time, must pay. The majority of New Zealands electricity has always been extracted from our rivers (52-61 percent during the last five years),45 but although preferable to fossil fuel power plants, our large dams have been built with the same disregard for future costs environmental and economic, that is typical of the global energy sector. Worldwide, some 5,000 large dams are over 50 years old,46 most of which will face their end of life scenarios by the middle of this century. Large dams and their reservoirs have a usual design life of 100 years, but given that the actual lifespan of a dam depends on the rate at which its reservoir fills with sediment, many dams suffer increasingly insurmountable flooding, liability and safety issues much sooner. New Zealand has its fair share of aging dams built in erosion prone catchments.

Decommissioning costs are substantial, ranging from 35-150 percent in proportion to the cost of construction.47 The worlds aging stock of large dams is heading for a decommissioning crisis, but predictably, provision for such costs is routinely ignored by power companies and governments.48 Its the usual story of false economics: take the benefits now, and whatever happens down the road is someone else's problem. Logically, the energy solutions of the past are not the energy solutions of the future short-term gain in exchange for long-term pain is a nightmare business model, in the end. Transforming to a cleantech future is not a choice, but a matter of undeniable necessity. In the process, beyond harnessing negawatts, New Zealand can progressively replace existing fossil-based electricity and aging large hydro-dams with low-impact alternatives. For example, the proposed tidal generation off Cape Terawhiti in the Cook Strait, which is expandable to 12,000MW. Cleantech will dominate the electricity sector in the 21st century. Global investment in the cleantech sector was US$2.5 billion in the first quarter of 2011, up from US$1.97 billion in the first quarter of 2010.49 According to a study by Fuji-Keizai, an international high-tech market research company, the global market for cleantech products and services will reach US$1.3 trillion annually by 2017.50 Other estimates of investment in cleantech are as high as US$30 trillion by 2025.51 So, our energy future is not a government issue? Governments play a vital role in setting the investment and technology agenda. Countries that fall behind in cleantech will pay economically and environmentally. Questionably, the New Zealand governments energy strategy prioritizes fossil fuel development over new renewables, stating that change to greener power would be market-led.52 53 So, our energy future is not a government issue? Surely, energy efficiency reforms including revenue decoupling are inevitable as our government comes under increasing pressure to meet climate change goals, improve energy security and intensity, and because an information-enabled network will provide financial advantages to the industry and consumers alike. After all, capturing negawatts is about four times cheaper than not capturing negawatts. In other words, every dollar spent on efficiency avoids four spent on added generation. That amounts to smart business, and smart government policy. As for building another Clyde dam, or any more large hydro-dams in New Zealand, why keep destroying our rivers, adding more decommissioning debt, when it costs less to harvest negawatts?

McKinsey & Company. (2008, February). The Case for Investing in Energy Productivity, http://www.mckinsey.com/mgi/reports/pdfs/Investing_Energy_Productivity/Investing_Energy_Productivity.pdf Recent research by the McKinsey Global Institute (MGI) and McKinsey and Companys Global Energy and Material Practice finds that we could cut projected global energy demand growth to 2020 by at least half by capturing opportunities to increase energy productivity the level of output we achieve from the energy we consume.
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United Nations Foundation. (2010, September). International Energy Efficiency Initiative. - Changing the Utility Business Model (abridged by European Institute). http://www.europeaninstitute.org/Documents/international-energy-efficiency-initiative.html energy efficiency can supply most or all of future electricity demand growth through 2030 and it is two to three times less expensive than conventional supply options.
2

World Wildlife Fund. (2011). The Energy Report, 100% Renewable Energy by 2050. http://www.worldwildlife.org/climate/Publications/WWFBinaryitem19481.pdf
3

Parliamentary Commissioner for the Environment. (1992, March). Report to the House of Representatives. Sustainable Energy Management in New Zealand: Improvements Required in Government Policy. http://pce.parliament.nz/assets/Uploads/Reports/pdf/Pre97-reports/Sustainable-Energy-Management-inNew-Zealand-Improvements-Required-in-Government-Policy-March-1992.pdf An Electricorp analysis in 1989 estimated that it was technically feasible to save 57% of total electricity consumption without compromising levels of service and that easily achievable savings may be more like 20%. Document unsearchable, see Page 13.
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KEMA. (2007, September). New Zealand Electric Energy-Efficiency Potential, Electricity Commission, Wellington, New Zealand. http://www.eeca.govt.nz/sites/all/files/Volume%201%20-%20Main%20report.pdf The study estimates that by 2016 technical potential for electricity savings is around 11,179 GWh per year and that of this 6,437 GWh per year is economic (i.e. cost effective). This represents 23 and 14 percent of projected 2016 energy usage, respectively. Peak demand technical potential savings by 2016 are estimated at around 3,199 MW with 1,738 MW estimated as economic. This represents 39 and 21 percent of projected base 2016 peak demand respectively.
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NERI. (2007, 9 July) Peer Review: KEMA Report NZ Efficiency Potential Study, National Energy Institute. http://www.parliament.nz/NR/rdonlyres/FB75953A-A26B-4BB5-BE6916F0527582DB/81890/NERIReviewKEMAEPS090707_.pdf The reviewers have concerns about the appropriateness of some of the economic and demand data used in the KEMA analysis, and consider that the potential savings estimates are conservative as a result. Despite its shortcomings, the study findings are sufficient to indicate that it is more cost-effective to invest in certain electricity efficiency and demand management measures than to invest in new generation and transmission investment.
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Energy Efficiency and Conservation Authority (EECA). (2007, October). New Zealand Energy Efficiency and Conservation Strategy, Making it Happen, Action Plan to Maximize Energy Efficiency and Renewable Energy. EECA, Level 1, Vector House, 44 The Terrace, PO Box 388, Wellington, New Zealand. http://www.eeca.govt.nz/sites/all/files/nzeecs-07.pdf Transmission and distribution losses account for around 11 PJ or 7.5 per cent of electricity generation per year. Transmission losses occur on the national grid; distribution losses occur as lines companies take power from the grid and deliver locally. They arise out of the design, operation and physical characteristics of distribution and transmissions systems and increase as the utilisation of (or load on) the system increases.
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Parliamentary Office of Science and Technology. (2006, October). Carbon Footprint of Electricity Generation. Parliamentary Office of Science and Technology, 7 Millbank, London SW1P 3JA. http://www.parliament.uk/documents/upload/postpn268.pdf A similar comparative study in the U.K. found that in terms of grams of CO2 equivalent per kWh of electricity generated, large hydro in the U.K. comes in with a carbon footprint 2 to 6 times larger than that of wind power. Specifically, large hydro has been measured at 10-30gCO2eq/kWh while wind has been measured at only 4.64gCO2eq/kWh, the lowest except for nuclear (Carbon Footprint of Electricity Generation, 2006).
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Bridget M. Rule, Zeb J. Worth and Carol A. Boyle. (2009, July). Comparison of Life Cycle Carbon Dioxide Emissions and Embodied Energy in Four Renewable Electricity Generation Technologies in New Zealand. Department of Civil and Environmental Engineering, The University of Auckland, Private Bag 92019, Auckland Mail Centre, Auckland 1142, New Zealand, Opus International Consultants Ltd., PO Box 5848

Wellesley Street, Auckland 1141, New Zealand. http://pubs.acs.org/doi/abs/10.1021/es900125e This study examined the comparative sustainability of four renewable electricity technologies in terms of their life cycle CO2 emissions and embodied energy, from construction to decommissioning and including maintenance (periodic component replacement plus machinery use), using life cycle analysis. The models developed were based on case studies of power plants in New Zealand, comprising geothermal, large-scale hydroelectric, tidal (a proposed scheme), and wind-farm electricity generation. The comparative results showed that tidal power generation was associated with 1.8 g of CO2/kWh, wind with 3.0 g of CO2/kWh, hydroelectric with 4.6 g of CO2/kWh, and geothermal with 5.6 g of CO2/kWh (not including fugitive emissions), and that tidal power generation was associated with 42.3 kJ/kWh, wind with 70.2 kJ/kWh, hydroelectric with 55.0 kJ/kWh, and geothermal with 94.6 kJ/kWh. This comparative study at the University of Auckland found that large hydro has a full life carbon footprint that is slightly over 2.5 times larger than that of tidal energy. Executive Report. (2010, March) Switching Perspectives Creating New Business Models for a Changing World of Energy. IBM Institute for Business Value. http://public.dhe.ibm.com/common/ssi/ecm/en/gbe03289usen/GBE03289USEN.PDF From the early days of the integrated monopoly utility until the mid-to-late 1960s, electric utilities aggressively pursued a grow-and-build strategy as core to their operating model.
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Navigant Consulting, A Ceres Report. (2010, July). The 21st Century Electric Utility: Positioning for a LowCarbon Future, Ceres, Boston, MA, USA. http://www.ceres.org/resources/reports/the-21st-century-electric-utility-positioning-for-a-low-carbon-future-1 Given decouplings positive attributes especially its effectiveness in removing utilities inherent conflict of interest and given concerns about alternatives to decoupling, it is reasonable to expect that decoupling will continue to gain in popularity and become the regulatory method of choice for maintaining utilities financial health while capturing EE as the key resource for the 21st century power sector. Utility targets and performance incentives, combined with the right rate model, will help ensure that utilities become drivers for EE (Energy Efficiency) and DER (Distributed Energy Resource) in a manner that wont harm the utilitys credit ratings or other financial metrics.
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Sheryl Carter, Devra Wang and Audrey Chang. The Rosenfeld Effect in California: The Art of Energy Efficiency. Natural Resources Defense Council. http://www.energy.ca.gov/commissioners/rosenfeld_docs/rosenfeld_effect/presentations/NRDC.pdf 1. RD&D and Standards 2. Integrate energy efficiency into resource procurement 3. Motivate utilities by decoupling revenues from sales 4. Set energy saving targets 5. Well-designed programmes 6. Independent evaluation of savings 7. Performance-based incentives
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Electricity Authority. (2010, November, updated 2011, May). Electricity in New Zealand. Electricity Authority, Te Mana Hiko, Level 7ASB Bank Tower 2, Hunter Street, PO Box 10041, Wellington 6143, New Zealand. http://www.ea.govt.nz/document/12098/download/about-us/documents-publications/ Total generating capacity of the New Zealand system is about 9,000MW.
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Electricity Commission. (2010). About The Electricity Sector. Electricity Commission. Te Komihana Hiko, Level 7, ASB Bank Tower, 2 Hunter Street, PO Box 10041, Wellington 6143, New Zealand. http://www.powerco.co.nz/uploaded_files/Our%20Buisness/Buisness%20Overview/NZ%20Electricity %20Market/Aboutthesector.pdf New Zealands total generation capacity is currently around 9,100 MW, compared with daily peak demand of about 6,500 MW.
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Ministry of Economic Development. (2010). New Zealands Energy Outlook, 2010, Reference Scenario and Sensitivity Analysis. http://www.med.govt.nz/upload/76133/Energy%20Outlook%202010.pdf Demand for electricity has been growing at an average rate of 1.6% per annum since 1990, driven by GDP growth of 2.7% per annum and household numbers growing at 1.4% per annum. In the Reference Scenario, demand growth is projected to slow slightly to 1.4% over the 2010 to 2030 period (growth in GDP and household numbers is assumed to reduce to 2.3% and 1.2% respectively). Industrial electricity demand is projected to grow by 1.2% per annum, close to the historical rate of 1.1%.
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Peak demand: 6,500MW. Demand growth (peak): 1.4 percent. Additional capacity (peak): @91MW.

Contact Energy. (2007, April). Turning Water Into Power. Contact Energy, Level 1, Harbour City Tower, 29 Brandon Street, Wellington, New Zealand. http://www.contactenergy.co.nz/web/pdf/environmental/Hydro_brochure.pdf
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New Zealand Electricity Commission. (2007, September 28). New Zealand Electric Energy-Efficiency Potential Study http://www.eeca.govt.nz/sites/all/files/Brief%20summary%20of%20the%20report.pdf The study estimates that by 2016 technical potential for electricity savings is around 11,179 GWh per year and that of this 6,437 GWh per year is economic (ie. cost effective). This represents 23 and 14 percent of projected 2016 energy usage, respectively. Peak demand technical potential savings by 2016 are estimated at around 3,199 MW with 1,738 MW estimated as economic. This represents 39 and 21 percent of projected base 2016 peak demand respectively. To assess achievable potential (ie. the amount of savings, net of naturally occurring, that would occur in response to specific program funding), three funding scenarios of 33, 50 and 75 percent were developed. The study estimated that all three of the funding scenarios are costeffective. Net achievable electricity savings by 2016 range from 840 GWh per year and 83 MW at the 33 percent scenario to 2,256 GWh per year and 470 MW for the 75 percent scenario.
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New Zealand Electricity Commission. (2007). Electricity Efficiency Potentials Study Briefing. http://www.eeca.govt.nz/sites/all/files/Electricity%20Efficiency%20Potential%20Study%20presentation.pdf
19

Contact Energy. (2011). Clutha Hydro Options. Contact Energy, Level 1 Harbour City Tower, 29 Brandon Street, Wellington, New Zealand. http://www.contactenergy.co.nz/web/view?page=/contentiw/pages/ourprojects/cluthahydro-projects&vert=ch
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Meridian Energy. (2011, February 18). Mokihinui Hydro Project. Meridian Energy, PO Box 2128, Christchurch, New Zealand. http://www.meridianenergy.co.nz/assets/projects/MokihinuiBrochure18Feb2011.pdf
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Generation Update, February 2011. (2011, February). Electricity Authority, Te Mana Hiko, Level 7ASB Bank Tower 2, Hunter Street, PO Box 10041, Wellington 6143, New Zealand. http://www.ea.govt.nz/document/12945/download/industry/modelling/long-term-generation22

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KEMA. (2007, September). New Zealand Electric Energy-Efficiency Potential, Electricity Commission, Wellington, New Zealand. http://www.eeca.govt.nz/sites/all/files/Volume%201%20-%20Main%20report.pdf The residential sector represents the greatest economic potential with savings estimated at 2,633 GWH and 1,235 MW. The commercial sector has the lowest economic potential, with savings estimated at 1,849 GWH and 239 MW. The industrial sector has economic savings estimated at 1,955 GWH and 264 MW. Energy Efficiency and Conservation Authority (EECA). (2009, Spring). Issue 4: Inspiring Energy Efficiency. Advancing Renewable Energy. EECA, Level 1, Vector House, 44 The Terrace, PO Box 388, Wellington, New Zealand. http://www.eeca.govt.nz/sites/all/files/eeca-news-spring-nov-09_0.pdf
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EECAs analysis showed that most companies could save 20% of their energy through no-cost and low-cost measures such as behaviour change and tuning equipment so the scale of the waste is quite staggering as is the potential gains for those who take this seriously. Energy Efficiency and Conservation Authority (EECA). (2009, Spring). Issue 4: Inspiring Energy Efficiency. Advancing Renewable Energy. EECA, Level 1, Vector House, 44 The Terrace, PO Box 388, Wellington, New Zealand. http://www.eeca.govt.nz/sites/all/files/eeca-news-spring-nov-09_0.pdf New Zealand households spend about $3.5 billion on energy each year. We estimate that most of us can easily save 10% on our electricity bills by taking a few simple steps today. That works out to savings of over 1,200 GWh about $200 per household, or about $320 million in savings each year across the whole country.
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Energy Efficiency and Conservation Authority (EECA). Te Tari Tiaki Pungao, Level 8, Vector House, 44 The Terrace, Wellington 6011, New Zealand. http://www.eecabusiness.govt.nz/why-be-energy-efficient/save-money-on-energy-use EECAs analysis of energy audits shows that most businesses can save at least 20% of their energy costs 10% through simple low and no-cost changes (a payback of 12 months or less) and a further 10% with some investment (payback of 1 5 years). M. Liu, D. Claridge, and W. Turner. (2008, September). Improving Building Energy System Performance by Continuous Commissioning. Energy Systems Laboratory, Texas A&M University. http://www.bes-tech.net/pdf/BT32.pdf Figure 3: Energy Cost Before Retrofit, After Retrofit, and After Retrofit and CC.
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Energy Efficiency and Conservation Authority (EECA). (2010, January). Saving Energy in Business: Lighting. EECA, Level 1, Vector House, 44 The Terrace, PO Box 388, Wellington., New Zealand. http://www.eecabusiness.govt.nz/sites/all/files/action-sheet-3-lighting.pdf Many businesses could shave up to 40% off their lighting costs.
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Energy Efficiency and Conservation Authority (EECA). (2010, January). Saving Energy in Business: Equipment and Appliances, Te Tari Tiaki Pungao, Level 8, Vector House, 44 The Terrace, Wellington 6011, New Zealand. http://www.eecabusiness.govt.nz/sites/all/files/action-sheet-4-equipment-and-appliances.pdf Enabling power management features will set the machine to revert to sleep mode when not used for a period, saving energy automatically. This cuts the electricity use of an average computer by around 50%.
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Energy Efficiency and Conservation Authority (EECA). (2010, January). Saving Energy in Business: Equipment and Appliances, Te Tari Tiaki Pungao, Level 8, Vector House, 44 The Terrace, Wellington 6011, New Zealand. http://www.eecabusiness.govt.nz/sites/all/files/action-sheet-4-equipment-and-appliances.pdf New Zealand already has more computers than people and its predicted that by 2020 well have close to 11 million computers. International Rivers. (2009, January).The Power of Negawatts. Efficiency: The Greenest Electricity Source. International Rivers, 1847 Berkeley Way, Berkeley CA 94703, USA. http://www.internationalrivers.org/files/EnergyFactSheet.pdf Half the states savings are due to building and appliance standards, which are revised upward every three years. We were told the 1993 standards couldnt be done, and today were meeting a standard that is 20% more efficient than that one, Wilson says. I think well get to zero-net-energy buildings in 10 years.
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Sheryl Carter, Devra Wang and Audrey Chang. The Rosenfeld Effect in California: The Art of Energy Efficiency. Natural Resources Defense Council. http://www.energy.ca.gov/commissioners/rosenfeld_docs/rosenfeld_effect/presentations/NRDC.pdf
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Kenneth E. Nelson and Joseph A. Lindsly. (1991, Spring). Case Study: Winning Ideas Reduce Waste at Dow. Dow Chemical, Louisiana Division, Plaquemine, LA, USA. http://www.p2pays.org/ref/44/43508.pdf
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Joseph Romm. (2008, July). Why We Never Need To Build Another Polluting Power Plant. http://www.salon.com/news/feature/2008/07/28/energy_efficiency You might think that after 10 years, and nearly 700 projects, the 2,000 Dow employees would be tapped out of ideas. Yet the contest in 1991, 1992 and 1993 each had in excess of 120 winners with an average return on investment of 300 percent. Total savings to Dow from just those projects exceeded $75 million a year.
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Energy Systems Laboratory. (2004, March). Continuous Commissioning Guidebook for Federal Energy Managers. Prepared by Texas A&M University and University of Nebraska for Office of Energy Efficiency and Renewable Energy, US Department of Energy. http://www1.eere.energy.gov/femp/pdfs/ccg03_ch1.pdf Continuous Commissioning (CC) is an ongoing process to resolve operating problems, improve comfort, optimize energy use and identify retrofits for existing commercial and institutional buildings and central plant facilities. Continuous Commissioning maintains long-term savings by ongoing monitoring of energy savings with follow up commissioning, as needed; improves the system reliability and building comfort by optimizing system operation and control schedules based on actual building conditions; upgrades the operating staffs skills by allowing direct participation of O&M staff; and reduces O&M costs.
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Energy Systems Laboratory. (2004, March). Continuous Commissioning Guidebook for Federal Energy Managers. Prepared by Texas A&M University and University of Nebraska for Office of Energy Efficiency and Renewable Energy, US Department of Energy. http://www1.eere.energy.gov/femp/pdfs/ccg03_ch1.pdf The average measured utility savings are about 20%, with simple paybacks often in less than two years.
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Energy Systems Laboratory. A Division of TEES The Engineering Agency of the State of Texas. http://www-esl.tamu.edu/continuous-commissioning
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M. Liu, D. Claridge, and W. Turner. (2008, September). Improving Building Energy System Performance by Continuous Commissioning. Energy Systems Laboratory, Texas A&M University. http://www.bes-tech.net/pdf/BT32.pdf Figure 3: Energy Cost Before Retrofit, After Retrofit, and After Retrofit and CC.
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Energy Efficiency and Conservation Authority (EECA). (2009, Spring). Issue 4: Inspiring Energy Efficiency. Advancing Renewable Energy. EECA, Level 1, Vector House, 44 The Terrace, PO Box 388, Wellington, New Zealand. http://www.eeca.govt.nz/sites/all/files/eeca-news-spring-nov-09_0.pdf Building services manager Chris Ward and his team at Wellingtons Reserve Bank are now reaping the rewards of adopting a new strategy to improve the buildings energy efficiency. When Ward commissioned an energy audit in 2008, he didnt expect the recommendation to be to establish a team of people to optimise the heat and ventilation (HVAC) system otherwise known as continuous commissioningTM. The outcome is particularly impressive as the building was already outperforming the industrys energy efficiency benchmark by around 30%, and yet this project yielded a further 22% in savings. The team, made up of Ward and his team, building services contractors and an energy auditor, gathered data, brainstormed and eventually identified and implemented 28 different system optimisation opportunities. Four more have been targeted for the following year. Their work has certainly paid off. The 22% reduction in energy use delivered by the optimisation project will save $60,000 annually. At this level of savings, the project has a payback of 12 months on external costs. If internal staff costs are added, the payback is 14 months.
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EECA Awards 2010. (2010). Celebrating Excellence and Innovation in Energy Efficiency and Renewable Energy. EECA, Level 1, Vector House, 44 The Terrace, PO Box 388, Wellington, New Zealand. http://www.eecabusiness.govt.nz/sites/all/files/2010-eeca-awards-winners-booklet.pdf Annual savings are projected to double by 2012 with similar payback on the further improvements planned. Over the three years that the project has been running, 152 tonnes of CO2e emissions have been avoided.
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Major Electricity Users Group (MEUG). (2011). Energy Use. MEUG, Level 1, 93 The Terrace, Wellington, New Zealand. http://www.meug.co.nz/Site/about/Energy_use.aspx
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Major Electricity Users Group (MEUG). (2007, July). List of MEUG Members and Mission Statement. MEUG, Level 1, 93 The Terrace, Wellington, New Zealand. http://www.meug.co.nz/includes/download.aspx?ID=27813
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Electricity Authority. (2010, November, updated 2011, May). Electricity in New Zealand. Electricity Authority, Te Mana Hiko, Level 7ASB Bank Tower 2, Hunter Street, PO Box 10041, Wellington 6143, New Zealand. http://www.ea.govt.nz/document/12098/download/about-us/documents-publications/ The single largest user (Rio Tinto Aluminium the smelter at Tiwai Point) accounts for approximately 15 percent of New Zealands total electricity demand.
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Electricity Authority. (2010, November, updated 2011, May). Electricity in New Zealand. Electricity Authority, Te Mana Hiko, Level 7ASB Bank Tower 2, Hunter Street, PO Box 10041, Wellington 6143, New Zealand. http://www.ea.govt.nz/document/12098/download/about-us/documents-publications/ In total, industrial efficiency initiatives have a target of achieving 140 GWh annual electricity savings within 10 years, which is enough to power around 15,500 homes a year.
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Electricity Authority. (2010, November, updated 2011, May). Electricity in New Zealand. Electricity Authority, Te Mana Hiko, Level 7ASB Bank Tower 2, Hunter Street, PO Box 10041, Wellington 6143, New Zealand. http://www.ea.govt.nz/document/12098/download/about-us/documents-publications/
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Hydro generation has ranged between 52 percent and 65 percent of total annual generation over the last five years. Patrick McCully. (1996). Getting Old: Dam Ageing and Decommissioning. Excerpt from Silenced Rivers: The Ecology and Politics of Large Dams, Zeb Books, London. http://www.internationalrivers.org/en/node/1463 Around the world, some 5,000 large dams are now more than 50 years old, and the number and size of the dams reaching their half century is rapidly increasing.
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SPX Consultants. (2008, October). Reversibility of Renewable Energy Developments, SPX Consultants Sustainable Infrastructure. http://www.mfe.govt.nz/rma/central/nps/generation/submissions/13-spx-attachment.pdf Typical Removal and Restoration Costs as Proportion of Construction Cost, Run-of-river hydro 25-50%, Storage hydro 35-150% Examples of storage dams which effectively operate in run-of-river mode are Clyde and Roxburgh on the Clutha River, and Ohakuri on the Waikato River.
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Patrick McCully. (1996). Getting Old: Dam Ageing and Decommissioning. Excerpt from Silenced Rivers: The Ecology and Politics of Large Dams, Zeb Books, London. http://www.internationalrivers.org/en/node/1463 No one knows how the major dams built in the last half century will be removed or where the money to pay for this will come from. Feasibility studies rarely if ever mention what will happen when a reservoir is choked with sediment or when a company no longer finds it economic to maintain a dam. The international industry has largely steered clear of the issue. "I have only once seen a paper on the decommissioning of dams," Wolfgang Pircher, then President of ICOLD, said in a lecture to the British Dam Society in 1992. It is, however, an issue which sooner, rather than later, will have to be addressed.
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Nathanael Baker. (2011, April 6). Cleantech Investment Reaches Record High in 2011. The Energy Collective. The worlds best thinkers on energy and climate. http://theenergycollective.com/nathanaelbaker/55235/cleantech-investment-reaches-record-high-firstquarter-2011 Preliminary tallies show more than US$2.5 billion was invested in the global cleantech sector in 1Q11. This represents the strongest first quarter on record for cleantech -- besting last year's previous high of US$1.97 billion.
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Jamie Vollbracht, Head of Innovation Strategy. (2011, May). Corporates and Cleantech Innovators, Carbon Trusts experience from the frontline of cleantech innovation. http://events.cleantech.com/amsterdam/sites/default/files/CTForumAmsterdam_Carbon_Trust_Corporates_a nd_cleantech_innovators.pdf
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Chris Tobias. (2010, April). One Hundred Percent. http://www.greenhousecleantech.com/blog/finally-some-horsepower-getting-behind-nz-cleantech/ According to a study by Fuji-Keizai, the global market for cleantech products and services will reach US$1.3 trillion in annual business by 2017; other estimates of investment capital come in as high as $30 trillion by 2025 in cleantech alone.
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The Greenhouse, Growing Cleantech. (2011, May). Renewable Energy Largely Untapped Report, Level 2, Excelsior House, 22-28 Customs Street East, Britomart Precinct, Auckland 1010, New Zealand. http://www.greenhousecleantech.com/blog/renewable-energy-largely-untapped-report/ The governments draft energy strategy, leaked last month, prioritised fossil fuel development over renewables, and stated that change to greener power would be market-led.
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New Zealand Energy Strategy. (2011, March). Developing Our Energy Potential. Ministry of Economic Development, 33 Bowen Street, PO Box 1473, Wellington 6140, New Zealand. http://static2.stuff.co.nz/files/Govtenergyplan.pdf Further commercialisation of petroleum and mineral fuel resources has the potential to produce a step change in economic growth for the country. The governments strategic objective for petroleum is to ensure New Zealand is a highly attractive global destination for petroleum exploration and production investment, such that we are able to develop the full potential of our petroleum resources. The immediate focus is on increasing exploration activity and on improving the knowledge of our petroleum basins.
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