Coal Usage for Electricity a Big No-No in New Zealand
Coal is one of the biggest natural resource in the world that is used to generate electricity, and across many countries Coal mining is a huge revenue generator and economic booster that not only helps in exporting this energy resource but also utilize it themselves to generate electricity and derive economic means to sustain themselves. New Zealand has banned all new coal mining for various reasons that concern environment and marine life in general. New Zealanders will wish to think carefully about calls to ban all new coal mining in New Zealand, or for our country to unilaterally increase the price of carbon without reference to global carbon prices. Of the 2.8 million tonnes of New Zealand coal consumed domestically last year, 72% was used in industrial processes, and, to a lesser extent, in electricity generation. A big drop in electricity generation from coal coincided with a fall in embattled state-owned Solid Energy's coal production.
The latest New Zealand Energy Quarterly, for the period ending September, was released yesterday by the Ministry for Business, Innovation and Employment (MBIE). The report collates energy supply, demand, price and greenhouse gas statistics. It found that electricity generation from coal has fallen 45% since June, and 37% for the year ending September. Genesis Energy, the owner of Huntly coal-fired power station, announced earlier this year that it would bring forward the closure of a second 250 megawatt generation unit by more than a year. The 30-year-old-plus unit was expected to be mothballed this month. Huntly has four of the old 250MW units. One unit went into storage at the end of last year. The supply of coal fell 29% in the quarter compared with the previous quarter, mainly due to a decrease in production of 16% between the two periods.
The final New Zealand Energy Quarterly for 2013 was released by the Ministry for Business, Innovation and Employment today. The report collates energy supply, demand, price and greenhouse gas statistics.This quarter's report found that electricity generation from coal fell 45% since June and 37% for the year ended 30 September 2013. In the September quarter supply of coal fell 29% when compared to the previous quarter, mainly due to a fall in production of 16% between the two periods. The drop in coal production is due to Solid Energy continuing its consolidation and cost reduction strategy. Downward pressure remains on New Zealand coal production due to a continuation of the high NZ dollar to US dollar exchange rate and low coking coal spot prices.
The drop in coal generation was offset by geothermal electricity generation, which rose to its highest ever level after Ngatamariki geothermal plant was commissioned in early September. The average retail petrol price for the September quarter was 216.6 cents per liter, up 6% from the June quarter. Overall this affected very few customers, so there was only a minor price rise of 0.1% in the average electricity price. This quarter also saw demand for diesel rise by 6% from the same quarter last year. As diesel is mainly used by trucks transporting commercial goods, this rise in demand could be a sign of further economic recovery.