How far and how expensive is a zero-carbon power system in Aotearoa New Zealand?

Abstract

Aotearoa New Zealand aims to achieve a net-zero target by 2050, and a zero-carbon power system will be pivotal to reach that target. To achieve the zero-carbon power system new power plants must be built to replace the existing fossil-fuelled generators (11 gas, 3 coal), around a quarter of the total current generation capacity, as well as meet the increased demand for electricity. Minimising the total systemic cost will benefit both the consumer and the whole economic system. The results of this study show that, for the current level of electricity demand, the fossil-fuelled power plants can almost be removed from the power system when 7 new power plants (6 hydro, 1 wind) are built. For an expected demand level in 2035, zero-carbon can be achieved with 21 new power plants (10 hydro, 7 wind, 3 geothermal, 1 solar). However, for the expected demand level in 2050, adding new power plants alone cannot guarantee the smooth operation of the power system at reasonable electricity prices. Other measures, like transmission line expansion and installing energy storage facilities, are also required. An additional capital investment of around NZ$20 billion will be required for the systematic optimal development of the power system.