BusinessNZ Energy Council


Turning energy uncertainty into action

Mar 15, 2022 | News

Tina Schirr – Mon, 14 Mar 2022

We are living through three incredibly disruptive global events at once.

With a pandemic now its third year and the war in Ukraine dominating headlines, one could be forgiven for forgetting we are on the cusp of climate disaster.

Each of these crises must be addressed, and where possible it makes sense to take steps that address more than one of these problems at the same time.

For example, electrification and decarbonisation can not only fight climate change but can also reduce reliance on Russian fossil fuels. And it can also be part of a Build Back Better or Green Deal programme that combines economic and environmental priorities.

The issue of climate change and sustainability took the spotlight in the World Energy Council’s / Business NZ Energy Council’s latest annual World Energy Issues Monitor, which includes a snapshot of views from experts across more than 90 countries.

The 2022 WEIM results and Country Issues Maps, released on Friday, show critical uncertainties about the key energy issues on our horizon are increasing globally.

In New Zealand, these uncertainties include market design and regulations, commodity prices, affordability, and climate change management.

Results also show an increasing awareness of the need to fast-track and manage the energy transition.

What matters now is capitalising on the momentum of agreements recently made at the 2021 United Nations climate change conference, COP26, to turn energy uncertainties into action – taking them from the issues keeping us awake at night and turning them into the issues which keep us busy at work.

Understanding why these uncertainties are increasing is essential in deciding how to tackle the issues.

New Zealand’s energy transition

In New Zealand, energy use makes up more than 40 per cent of our greenhouse gas emissions.

We need to keep in mind the three pillars of the energy trilemma – emission reductions, energy security, and equity and affordability – and move forward despite uncertainties.

The energy sector is making progress by investing in renewables. Over the past 12 months we have seen more investment in wind and solar, and the sector is also keeping an eye on the horizon for new opportunities in transport and storage.

The 2022 WEIM identifies electricity storage as being both a critical uncertainty and an action priority.

As a small island nation, New Zealand needs diversity of supply and sufficient energy storage.

The Government is investigating pumped hydro and other storage solutions.

While the energy sector awaits the outcomes of these investigations, it is starting to turn growing uncertainty into a plan of action, announcing multiple decentralised storage projects over the past few months.

Alongside battery storage projects, energy companies are now trialling biofuels and putting together a business case for hydrogen-fuelled flexibility to support our transition to a more sustainable energy system.

With more solar and wind being built, our storage capacity must increase in coming years.

New Zealand does not import oil from Russia, but we buy our petrol on a global market that is now more volatile and constrained.

We don’t import gas, but our own gas supply is uncomfortably tight and we can’t rule out needing to import gas in the future.

Our access to such fuels and our ability to store them is crucial to safeguarding energy security and affordability in this country.

Energy supply was tight last winter, and our inhouse modelling TIMES-NZ, suggests that a range of fuel types, including oil and gas, will be needed until 2050 while New Zealand transitions to a low-carbon energy system.

Until then it remains essential that we continue to pay attention to what is happening offshore and consider the ripple effect of seemingly far-away conflicts.

Taking action

The latest WEIM survey took place shortly after COP26, so it makes sense that these results show shared concern over inaction and the consequences of putting nations first over the health of the planet.

Countries have come away from the conference less certain about how to tackle the issue of climate change management – but that doesn’t have to be a bad thing altogether.

In an era where the energy landscape is undergoing fundamental transformation, energy leaders must pay attention to many different signals of change and distinguish key issues from the noise.

Amidst this growing uncertainty, the 2022 WEIM signals a further shifting mindset. Having these issues and their impacts ‘on the board’ means they aren’t simply being ignored, but that they are registered.

The trick is ensuring countries do not lose sight of these issues, amongst an increasingly crowded list of critical uncertainties.

Guided by the three pillars of the energy trilemma, we must seek sustainable alternatives to unsustainable practices, and refuse to let uncertainty lead to inaction.

Recent News