POWER REQUIREMENTS AND SUPPLY FOR NEW ZEALAND IN THE 1970'S

Abstract

The power production in New Zealand in the 1969/70 year in primary energy terms was shared: oil 59%, coal 24% and primary electricity (hydro and geothermal) 17%. However, if the electricity is expressed as the energy input into a thermal station at 25% efficiency the percentages are: oil 39%, coal 16% and electricity 45%.A very small fraction of the oil is produced locally, the rest being imported; coal is all locally produced; gas is manufactured from both coal and oil while about 95% of the electricity is from hydro or geothermal sources. Traditionally each industry has forecast its own future in isolation.Following a National Development Conference in 1968 a Fuel and Power Council was formed. This Council was required to forecast the energy demands of all industries in the sector for ten years and to report on requirements for capital labour and other resources for each industry.One method of forecasting investigated was using the historical relationship between the rate of growth of demand and the rate of growth of the gross national product. Forecasts by this method produced lower results than those obtained by aggregating the individual industry forecasts. For the seventies the forecasts are —coal producing a fairly even level of energy primary; electricity generation, i.e. hydro and geothermal will increase by about 6.2% p.a. with further geothermal unlikely to be developed in the period and hydro development proceeding in one area in the North Island and two areas in the South Island. However, generation is forecast to increase at an average of 8.9% p.a. in the next ten years to more than double present level and thermal stations will produce the remainder of the increase.It had been proposed that the first of these new thermal stations would be coal-fired and the next a nuclear one but the discovery of a gas field off the Taranaki Coast has altered the outlook. It has been decided that the first two stations will be gas and/or oil-fired with the nuclear being deferred. Final decisions depend on negotiations mentioned later.As stated earlier only a fraction of oil used is local from wells in Taranaki which have been producing for many years. However, in 1959, a well at Kapuni was completed producing gas and condensate. The natural gas is being piped to Auckland and Wellington and will service nine existing gas authorities en route who at present use coal and imported oil. The condensate is shipped to a refinery at Marsden Point in North Auckland. The Kapuni field is of only limited size.More recently a much larger field has been proved off the Taranaki Coast. Exploiting this field will be costly and the natural gas market as a premium fuel is insufficient to warrant the expenditure.However, if the first two or even three thermal electric power stations were fired by natural gas the proposition could be viable. At present negotiations are taking place to arrive at conditions of supply and a price for the gas acceptable to both the oil industry and to the Government. The future of the oil and natural gas industry in New Zealand depends on the outcome of these negotiations and on the results of further exploration.