We face a highly uncertain energy future.

The need to balance our energy systems across the dimensions of affordability, sustainability and reliability is becoming more obvious and urgent, yet the responses are increasingly complex.

Businesses, government and individuals are grappling with issues such as accelerating deeper and affordable decarbonisation, rethinking energy security as dynamic resilience in an era of broadening geopolitics, cyber insecurity and global environmental risks. Storytelling about the future and modelling help us plan for an uncertain future.

But we need to be realistic that the future might not eventuate as we expect, especially with the increasing pace of technological change and international climate action.

BEC20600

The depth of our BEC2060 project has established BEC as a pre‑eminent source of energy system modelling and data.

Our internationally renowned, New Zealand-specific modelling paints a rich picture of our potential and plausible energy system futures. Using an explorative analysis, we can give a more accurate, open-ended insight into how New Zealand’s future energy mix might look, should things we are uncertain about coalesce in different ways, and the range of trade-offs and choices these different pathways imply.

We have used native birds Kea and Tūī to represent how the energy futures might look.

Tūī are territorial and competitive, resulting in a lively and vibrant forest environment. As mainly nectar feeders, their specialised energy needs limit them to specific habitats and ways of living but provide benefits to others through pollination and seed dispersal.

The Tūī scenario represents a future in which global communities, businesses and governments believe that climate change is only one of several competing priorities.

Under Tūī, New Zealand takes a cautious approach to achieving emissions reductions, maintaining economic growth through market mechanisms, eschewing collective action while waiting to see how other countries proceed.  Our carbon price lags behind others.

Kea, on the other hand, are collaborative, curious and innovative. Their problem-solving ability is well-known, they will eat anything, and they readily adapt to live and survive in different environments and habitats. Their intelligence and curiosity are crucial to their survival in harsh mountain environments.

Kea represents a future in which climate change is seen as the most pressing issue. A broad and early economic transformation is pursued by New Zealand society and government, deliberately choosing to be a global leader in the pursuit of a low-emissions society. Our carbon price exceeds others.

While we may have a strong bias and want a particular future to come true, our task was to tell two distinct stories that are equally plausible and contain both risks and opportunities. Time and again we have seen the investment and policy pitfalls of believing we know the future and ‘betting the farm’ on it.  Think Big springs to mind.

Clarity of the problem does not limit the range of issues about which we are uncertain, or how factors beyond our control might impact on what we do.  Only hubris prevents us from believing this.  The scenarios provide policy makers and investors with stories that they can test different decisions against, to establish their resilience.

The results

The modelling of the two scenarios has provided plausible, integrated, energy sector futures.

New Zealand, like the rest of the world, faces rapidly changing patterns of energy use, emerging disruptive technologies and the challenge of living affordably and sustainably.

It is clear from the results that the biggest opportunity to decarbonise is to leverage New Zealand’s amazing renewable electricity resources and convert much of the transport fleet and industrial heat to electricity.

We also found energy security becomes paramount in a renewable world – careful investment in the resilience of our electricity system is required to ensure the wider economic reach of electricity is not compromised by the very problem it is trying to fix – a windier, stormier future.

And questions arise about the role of our domestic gas sector with the prospect arising of importing LNG.  Is this a future we want, and if not, how do we fuel our export economy with affordable alternatives?

A changing society and economy

Whichever flight path we are on, the New Zealand society, economy and energy system will look considerably different to today. There will be less reliance on primary produce with greater emphasis on service industries.  This has implications for where we live, how we live and how we move.

Policymakers, investors and consumers all have important roles in shaping what this future might look like. Collectively we need to develop an understanding of how our societal and economic makeup will change.

There is an impending tech race which government and investors must get behind. At the same time, that race is finely balanced, and we must be wary of picking tech winners. Favour should be given to trialling, piloting, and providing adaptive policy frameworks to let this race play out well.

If we fail to ask the ‘what-if’ questions, we will become blinded to the possibility that the future we are aiming for will not eventuate.

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