Why aren't we generating our own energy?
Home » Magazine » Good, issue 8 » Why aren't we generating our own energy?It’s not yet economically viable for many New Zealanders to generate their own renewable energy. Charmaine Watts, chair of Refit-NZ, explains how ‘feed-in tariffs’ could help everyone profit from producing, using and selling electricity
Renewable energy is one of the best solutions to reducing greenhouse gas emissions, meeting the growing energy demand and improving economic security. So why is New Zealand one of the few countries in the world where renewable energy generation has been declining for many years?
New Zealand is extremely well positioned to transition to using 100 percent renewable energy. We have abundant sunshine hours, one of the best wind resources in the world and plenty of rivers, lakes, streams and geothermal activity. Our renewable resources could meet almost double the country’s electricity demand, while our large hydroelectric storage capacity could smooth out the intermittent nature of other renewable energy sources.
In fact, New Zealand is so awash with renewable resources that the government has set an impressive voluntary target to generate 90 percent of electricity from renewables by 2025. Yet, unlike many OECD countries, New Zealand has no specific policy to increase the uptake of small-scale renewable electricity production.
We have abundant sunshine hours, one of the best wind resources in the world and plenty of rivers, lakes, streams and geothermal activity. Our renewable resources could meet almost double the country’s electricity demand, while our large hydroelectric storage capacity could smooth out the intermittent nature of other renewable energy sources.
If New Zealand wants to reverse its declining contribution from renewable resources, it can no longer ignore the potential of small-scale renewable energy systems.
One of the major problems faced by those wishing to install wind turbines, solar panels or micro-hydro systems is the upfront cost and lengthy return on investment. A renewable energy strategy called a ‘feed-in tariff’ (FIT) immediately overcomes this barrier. If adopted, FIT legislation would make it easier and cheaper for New Zealanders to generate more of their own electricity from small-scale renewable resources.
The FIT is a government legislated policy. It guarantees a fixed price payable to any person or organisation that generates renewable electricity and feeds it into the national grid or local electricity network. Electricity retailers would be required to pay participating small-scale generators, so consumer investment in renewable energy would be repaid much more quickly.
For example, it costs about $21,000 to install a 2kW photovoltaic system on the average home. Under current conditions, you’d be paid about 7.5 cents per kilowatt hour for the electricity you feed into the grid, giving you about a 1.4 percent return. With a FIT, you would be paid 75 cents per kilowatt hour, giving you an 11.6 percent return.
A FIT gives everyone a chance to profit by producing, using and selling renewable electricity. But FITs have many other social and environmental benefits: creating new jobs and industries, helping secure domestic energy supply, speeding up the reduction of CO2 emissions, deferring or avoiding investment in lines and infrastructure, reducing losses incurred in distributing power, providing fair market conditions, ensuring future electricity prices against rapid inflation, and prompting economic development in rural areas.
Internationally renowned energy expert Dr Benjamin Sovacool believes New Zealand could lead the world in renewable energy, and be 100 percent renewable by 2025—with the right political will and some policy changes.
It has been empirically proven that no policy delivers more renewable energy, faster, cheaper and more equitably than FITs.
FITs are a recognised mechanism for levelling the playing field and accelerating the deployment of small-scale renewable energy. They pave the way for distributed generation and smart grids. Of the 63 countries, states and provinces around the world where FITs have already been implemented, wide-ranging benefits are recognised. And they cost nothing: one of the major attractions of FITs is that they are cost-neutral to governments. The premiums are spread over all consumers, making up a tiny proportion of any customer’s total electricity bill.
Unfortunately, New Zealand consumers have very little control over their electricity, whether generating, buying or selling. But if 63 other developed countries, states and provinces can see the value of enacting feed-in policies, so should New Zealand.
via letters@good.net.nz