Monday, 16 May 2016

New Zealand's INCREASING use of fossil fuels

I see myself more and more as simply a chronicler of stupiity and criminal behaviour as the Titanic sinks and the world burns while everyone looks on with disinterest.

The latest report from the EIA whatever Robertscribbler may say indicates that use of fossil fuels is set to increase.


  /  May 14, 2016
Unfortunately this article from a fairly august source seems to indicate that a meaningful reduction of fossil fuel use by the industrial nations may not on the cards any time soon.
  • Pretty much every piece of information EIA puts out has either under-counted or under-predicted renewable energy adoption. The agency has a history of being overly fossil fuel focused and has consistently failed in both its tracking of global and national renewable energy trends and in forecast price projections and rates of adoption. It’s pretty clear that this study is worthless as a projection as it clearly fails to even taking into account current renewable energy adoption rates, current rates of coal plant closures, and current industry trends in which coal corporations have become increasingly nonviable. The study also fails to take into account renewable energy price trends and leveraged economies of scale over even the coming decade. If there’s an example of renewable energy denial in action, then this EIA study is it.
    As a bit of public information it’s basically worthless. I’d list this under fossil fuel centric worldview and rank misinformation.

The U. S. Energy Information Administration foresees continued dominance for coal, gas and oil

The only thing that will stop this from happening is a deep Depression or a sudden halt to industrial activity brought about perhaps by a sudden climate emergency.

In the midst of this the government of New Zealand and major corporations such as Fonterra are playing MORE than their role in assisting this headlong rush to oblivion.

In reaponse to Alexander Ac who alerted me to the main article I responded with this:

The NZ government makes a mockery of the Paros Agreement by appointing a former Minister of Social Welfare as Minister of Treaty Negotiations and undermining the agreement before the inks even dry. The dairy giant Fonterra is building a coal-powered plant in addition to this. At the same time one of the electricity companies is putting a tax on users of solar power”

The following items in my opinion reinforce this impression


NZ’s emissions reductions go up in smoke as generators keep Huntly coal burning

4 May, 2016

The decision to keep the Huntly coal thermal power station open for another four years is not only contrary to all New Zealand’s commitments and climate targets, it also sends the Ministry for the Environment’s projections of stabilising energy emissions to 2020 up in a cloud of coal smoke.

We seem to have had an extra dose of announcements and activities about climate change in an action-packed month of April.

Climate change minister Paula Bennett signed the UN Paris Agreement. The Morgan Foundation’s “Climate Cheats” report made a big splash. That lead to Jack Tame’s grilling of Paula Bennett. And the Royal Society of New Zealand released two major reports on climate change; one on impacts and another on policy responses. The business-backed Pure Advantage group released a report about enhancing forestry sequestration.

So what did the New Zealand energy industry do to elbow it’s way into the climate change spotlight? How do you beat signing the Paris Agreement or compete with climate fraud?

You just say you are going to burn more coal!

On 28th April 2016, Genesis Energy and Meridian Energy announced they had reached an ‘arrangement’ that would keep the coal-burningHuntly thermal power station open for an extra four years. This deal postpones the expected shut down from the planned 2018 date to 2022.

Patrick Smellie notes two interesting details in the story. First, the irony that the “100% renewable” generator Meridian Energy had led the process of negotiating with Genesis. And second, that the public announcement of the shut-down by Genesis was probably just some signalling ‘code’ within the negotiations to get Meridian to share more of the cost of keeping Huntly as a back-up generator in the event of low hydro lake storage.

Gareth Hughes, the Green Party MP points out that on the basis of generation of 1,277 GWh of energy in 2015, pulling the plug on Huntly power station would have lifted New Zealand’s proportion of renewable electricity generation from 79.9 percent to 84.5 percent. So unsurprisingly the Meridian-Genesis deal is just 180 degrees in the wrong direction in terms of the 90 percent renewable target and the need to reduce greenhouse gas emissions.

Greenpeace has given us ten reasons to shut Huntly and have started an on-line petition to keep to the plan and shut Huntly.

But what effect will this have on the Ministry for the Environment’s projections of energy emissions out to 2030? These are part of the December 2015 report “NZ’s Second Biennial Report under the UNFCCC”. This chart shows projected “with measures” emissions and “without measures” (i.e. business as usual).
MfE GHG emission projections to 2030MfE GHG emission projections to 2030

In the chart, the projected “with measure” emissions for each sector are the circles and lines. The projected ‘business as usual’/’without measures’ emissions are the lines between the data points marked by triangles on 2020 and 2030. That’s because the without measures projections are for only two years! It is almost as if they are an after-thought.

The other thing to note is that for agriculture, transport and industry, there is no difference between “with measures” and “without” projections. This is of course because the Ministry is reflecting the Government’s intention to exempt those three sectors of the economy from any climate change policy.

However, have a close look at the energy sector projections. There is some ‘daylight’ visible between the ‘with’ and ‘without’ projections. The “without” trends ever so slightly upward and the “with” trend is a plateauing. So something is expected to change the slight upward emissions trend to a plateau. The Biennial Report states on page 39;
Energy emissions are expected to increase between 2013 and 2015, but then fall between 2015 and 2020. The remaining coal-fired power plant in New Zealand is expected to be decommissioned by 2018, reducing emissions from coal. Coal-fired electricity generation is expected to be replaced mainly by a combination of hydroelectricity, geothermal, wind, and gas-fired peaking plants in the modelled scenario”.

In other words, the ‘something’ was the close-down of Huntly. The Ministry for the Environment was relying on Genesis Energy to honour its public statement that it was closing Huntly. Which of course would then be attributed to the New Zealand emissions trading scheme. However it looks like the projections are now out-dated.

The 2030 emissions projections show that New Zealand’s climate change policies are intentionally not affecting three out of five sectors of the economy. With two power generators reaching a private agreement to keep the Huntly thermal power station emitting carbon dioxide for another four years, the projected savings in energy emissions out to 2030 have gone up in a puff of coal smoke

Fonterra’s coal-fired climate folly

by Jeanette Fitzsimons
Coal Actiion Network,
17 April, 2016

Why would Fonterra spend several million dollars on a process lasting nearly a year, seeking planning consent for a huge new milk drier that it knows will never be built?Perhaps that’s not a lot of money to them – after all, one million is only three months’ salary for their CEO.

Fonterra’s proposed Studholme project, just outside of Waimate in South Canterbury, would see two new spray driers powered by two immense coal boilers – one 65MW, the other 50.

one lump or two

This is the biggest new coal burning project in the country, with the hearing happening just as our Minister for Climate Change is about to travel to New York to sign the Paris agreement where we undertook to reduce our greenhouse emissions a totally inadequate 11% below 1990 levels. (It’s even more inadequate when creative accounting turns this into more like +10%).

Fonterra is already the second biggest coal burner in the country and grew its coal use by 38% between 2008-2013. They pay lip service to climate change but in practice are totally wedded to coal.

This new plant, if it is built and runs at capacity, would produce some 100,000 tonnes a year of greenhouse gas emissions (similar to its Darfield plant), plus the much more global warming potential of the methane and nitrous oxide from nearly half a million new cows that would be required to supply the milk.

But that isn’t the reason the plant will never be built. In New Zealand, increasing greenhouse gas emissions are never a reason for anything the dairy industry or Government does – they just aren’t on the radar.

Coal Action Network (CANA) put a major effort into submissions with two expert witnesses at the hearing in Waimate last week. We argued, supported by dairy economist Peter Fraser, that there is no milk available now to supply this behemoth and that, contrary to Fonterra’s submissions, milk supply is dropping and farmers are shedding cows.

That’s not rocket science, given the price farmers receive for their milk solids has plummeted to $3.90 from a high of $8.40. Fonterra says it expects, supported by no evidence at all, that historical growth of 4-5% a year in South Island milk production will resume soon. It offered no evidence of what sort of price rise would be needed for farmers to add more cows or undertake very expensive land conversion, and no evidence that prices would rise at all.

It fell to CANA to bring the only economic evidence on this to the hearing. Peter Fraser, an economist with experience in Treasury, MAF and several positions in the industry, Peter Fraser argued convincingly that the new driers would need more than half a million new cows to supply the milk to run them at capacity; that his best estimate was that prices would recover to ~$5 +/- $1, and that new dairy farms needing irrigation were not economic at less than $6.50 and, in many cases, much more.

Further, the EU farmers – whose quotas have just been removed – are planning to meet any growth in demand that does occur and the cost structure of intensive dairying in NZ is now higher than theirs. We are no longer the low cost milk producer feeding on grass. If prices do rise substantially, the US is poised to enter the market ahead of us.

(On the other hand if we are wrong and prices do rise and the extra half million plus cows do materialise, we have an unmitigated disaster in Canterbury with the human equivalent of those cows and their water impacts being equivalent to plonking a city the size of Jakarta on the Canterbury plains.)

Peter’s evidence is why I am sure this plant will not be built. So why are we going through this charade?

Even though Fonterra does not have a great reputation for strategic thinking (they are still making low value commodities like milk powder when successful companies are adding value and paying their farmers much more), they have heard Peter’s analysis before and it is hard to believe they are incapable of understanding it.

I can see two possibilities:
  1.  Fonterra needs to portray the image of a successful and expanding company to keep investor confidence. Its debts are currently roughly equal to its assets so it is in a parlous financial state. If they do grow milk supply the farmers with new cows will have to buy shares to be able to supply Fonterra, and this will help the company get out of its mess. Perhaps they really think wishing will make it so?
  1. In case we are all wrong and milk supply does expand, if they already hold a consent for a processing plant no-one else will try to capture that milk as they couldn’t catch up and build a new plant first. So it may be an anti-competitive move.
Neither of these is a good reason for spending nearly a billion dollars it doesn’t have and going further into debt, for milk that nobody can afford to produce.


Waimate is left expecting jobs and economic development, and so is not pursuing any other strategy. This state of affairs could last ten years before the resource consent would lapse. But the jobs and development will never materialise. This is known in the trade as “planning blight”.

In this case, whether Fonterra run its new factory partly on wood waste is irrelevant. But most of the discussion focussed on that, rather than the lack of milk. That elephant in the room, like climate change, is just too big to be on the radar.

Correction:  this blog has been corrected on 20 April to change the “million cow” figure to “half a million” – see comments by Peter Fraser below. Thanks to George Williams for pointing out the error.  

Further reading:

The media summary of CANA’s evidence to the hearing in Waimate.
All evidence by CANA, CANA members, and experts to the hearing

Fonterra a large scale coal user

Giant dairy co-operative Fonterra is New Zealand's third largest coal user.
PETER DRURY/FAIRFAX NZ     Giant dairy co-operative Fonterra is New Zealand's third largest coal user.

25 May, 2015

Fonterra, one of the country's three largest burners of coal and a leading greenhouse gas polluter, could switch to biofuels - but at a financial cost.
Former Green Party co-leader and environmental activist Jeanette Fitzsimons said Fonterra risked damaging its reputation "as a company that trades (on) being clean and green".
She said it could switch to more energy efficient and environmentally friendly biofuels to power their milk processing plants.
For the most recent year that data is available (2013) from the Ministry of Business, Innovation and Employment, New Zealand's largest company used 410,000 tonnes of coal to turn liquid milk into powder, earning total revenue of $22 billion in 2014. Altogether the dairy industry burns 512,811 tonnes of coal.
Based on one tonne of coal producing 2.86 tonnes of carbon dioxide, Fonterra's coal-powered factories pump out 1.17 million tonnes of the climate warming gas. Add to that its gas-powered plants and tanker fleet, and the company becomes one of New Zealand's top greenhouse gas polluters.
Wood waste is readily available close to a number of dairy factories. Photo: SANDRA CROSBIE/FAIRFAX NZ

Fitzsimons said that was "without mentioning cows and the methane they produce".
In 2013, 4.6m tonnes of coal was produced from New Zealand mines, of which 2.1m tonnes were exported. Of domestic users, the largest are the Glenbrook steel mill, Huntly power station and Fonterra.
Fitzsimons said Glenbrook had no other fuel options at present, although it was working on alternatives, and only half of Huntly was operating.
If not for dairy factories, Australian coal miner Bathurst might find it hard to survive in New Zealand. About 200,000 tonnes of coal produced from its Takitimu mine keeps the Edendale plant in Southland and the Clandeboye factory in South Canterbury going, and 35,000 tonnes a year is extracted from the Canterbury Coal mine for its other Canterbury's dairy factories.
Other Fonterra factories use coal, including Brightwater near Nelson, Hautapu, Te Awamutu and Waitoa. Fonterra's subsidiary Glencoal has been investigating opening up an open cast mine in north Waikato to power the latter three plants.
Most other Fonterra processing plants, especially in the North Island, use gas, but rival dairy company Synlait, which recently opened a factory near Dunsandel in Canterbury, processes 550 million litres of milk each year, powered by coal.
The current low price of coal explains why companies continue to use it rather than invest in other technologies. In late 2011, prices for steel making went as high as US$330 a tonne, but by 2015 they had plummeted to US$109 a tonne. Thermal coal for boilers to dry milk is around US$60 a tonne.
Fonterra expert Mike Suggate told a hearing into the proposed Glencoal mine in 2013 that it would cost $15m more to use wood waste than coal in its Waikato plants. With the plunge in coal price since then, that cost difference is sure to have risen.
Robert Spurway, Fonterra's managing director global operations, said the company was committed to reducing environmental impacts across its operations "through the use of new technologies and optimisation of our energy mix towards cleaner, more efficient forms of energy".
Based on energy intensity per tonne, it set the standard within the New Zealand dairy sector, he said.
"Despite expansion across our manufacturing plants to keep pace with rising New Zealand milk volumes, we have delivered year-on-year improvement in energy intensity resulting in a 16 per cent reduction in energy intensity since 2003.
"Investigation of options for cleaner burning, more efficient energy sources form a key part of our energy strategy, and include our recent trials of miscanthus and the assessment of technologies that allow us to co-fire biomass in a number of our newer plants," Spurway said.
Coal was used by a third of Fonterra's manufacturing sites – the majority in the South Island where it did not have the option of using natural gas.
Giant miscanthus grass growing on trial at a Kirwee dairy farm, Canterbury. Lincoln University researchers Steve Wratten (left) and Chris Littlejohn at one of the miscanthus trial plots. Photo: Fairfax NZ


Fonterra recently conducted some small scale trials of a "wonder crop" called Miscanthus giganteus, a north Asian grass with one of the highest biomass properties of any plant.

At 34 tonnes of biomass per hectare, miscanthus surpasses switchgrass (17 tonnes), maize (17 tonnes), pine woodchips (10 tonnes)  and wheat straw (3.5 tonnes).
A hectare of miscanthus yields 15,893 litres of ethanol, compared to maize with 7479 litres a ha.
The grass also holds the promise of being able to be used for shelter belts and to soak up nitrogen from overloaded pastures.
But Fitzsimons says there is sufficient wood waste to use without planting new crops.
Westland Milk Products and DairyNZ have also been trialling miscanthus in Canterbury, and have overtaken Fonterra in the field as the dairy giant has put a halt on its trials, where it has been growing the crop on two hectares of land.
Miscanthus NZ chief executive Peter Brown said Fonterra risked missing the bus on biofuels.
"The number of miscanthus plants that are able to be produced - and hence the area that will be able to be established - is relatively limited and without some forward planning cannot be ramped up very quickly at all," Brown said.
"We already have international interest being shown in purchase of rhizomes from New Zealand in significant quantities and if that goes ahead, we will be hard-pressed to supply this export market as well as supplying the demand for miscanthus and for other uses such as renewable diesel plants, which I am now certain will be commencing construction within the next 12 months. We have already successfully exported some plants to India."
Work needed to be done on the best way to harvest and package miscanthus so it fitted in with Fonterra's existing fuel handling systems. It was likely it would be used initially as a mixture with coal.
Brown described miscanthus as being the energy equivalent of low quality coal, but about half the energy of high quality coal.
Whatever product is used to create biofuel - it could also be wood waste - needs to be close at hand or else the costs of transport make the technology too expensive.
Fitzsimons says she does not understand why companies would bother growing new crops using new land when wood waste was plentiful, relatively close to hand (at least in the North Island) and could provide substantial extra income and jobs in forestry.
It was important to dry it before trucking it, though, as timber was 50 per cent water, she said.
Brown says miscanthus would not be used in competition with other land uses but would supplement them.
"For example, as shelter on centre pivot irrigation dairy farms, it would help enhance returns. If you had miscanthus shelter along every dairy fence in Canterbury, you would have sizeable quantities," Brown says.
Other benefits of the plant include that it grows well on marginal land, does not need fertiliser after a year, and is sterile, so will not become a weed pest.
The trials have also shown that nitrogen leaching from below miscanthus is considerably less than nitrogen leaching from any other recorded crop, including pine trees.
And in Canterbury, where centre pivot irrigators march across the countryside, they can travel unimpeded through miscanthus. 

New solar panel charge kicks in

Hawke's Bay lines company Unison is introducing an extra charge for solar panel users, in a move Greenpeace says is wrong.
Radio NZ,
1 April, 2016

People install the panels to reduce their power bills. But Unison fears this will reduce its income and make its assets hard to maintain, so it is bumping up its charges to make up the difference.

no caption
Photo: 123 RF

The electric lines industry has said many times that people using solar panels and batteries pay lower power bills, making less money available to pay for the electricity grid.

Yet most solar panel users still need that grid to be available as a fallback when solar power dries up overnight or on cloudy days.

Senior Unison manager Nathan Strong said his firm was acting now to protect its income and make sure the customer got a good idea of the real cost of providing an electricity network.

"Currently it costs us about $900 a year to serve a typical residential customer," he said.

"Under our old pricing approach, someone putting a solar panel on a roof would reduce their contribution by $300 and that $300 would have to be made up by someone who does not have solar panels on their roof."

Mr Strong said changing the rules brought fairness.

Unison said it was still calculating the exact figure, but network charges could rise by up to $150 each year.

From today, the scheme would affect the company's 110,000 consumers in Hawke's Bay, Taupo and Rotorua who put solar panels on their roof.

It would only happen if they used their panels to generate surplus power and feed it back into the national grid.

Greenpeace's Russel Norman said Unison was doing the wrong thing.
"The impact of Unison's solar tax is to change the economics around the installation of solar panels, when in the interests of climate change what we want to do is make it easier."

The move was incompatible with recent international pledges to reduce greenhouse gas emissions, Mr Norman said.

But the idea of charging solar power users extra money was an anathema to the Sustainable Electricity Association of New Zealand.

Chairman Brendan Winitana called the Unison action a solar tax.

"That solar tax is a 26 percent increase in a lines charge and we believe that is a very strong move to make, especially when the Electricity Authority called for submissions on distribution pricing," he said.

"That solar tax is a 26 percent increase in a lines charge" - Brendan Winitana on Morning Report 2 min 43 esc

Unison said that was not correct and people would still save money on their power bills.

Solar panel installation company Solar City chief executive Andy Booth said Unison was being disingenuous and imposing an unfair tax.

"Customers who use low-energy light bulbs and energy efficient fridges to reduce their consumption aren't getting taxed, customers who put solar systems that generate power to reduce their energy consumption are. We believe fundamentally that's anti-competitive," he said.

Unison would be the first lines company to do something like this, but others were understood to have similar plans in train.

The company is a member of the the Electricity Networks Association and Its chief executive Graeme Peters said Unison was acting within its rights.
"Distributors are entitled to make their own decisions about pricing in their own areas," he said.

"But collectively, we are trying to bring about a menu of pricing options they can choose from."

There are 28 lines companies in New Zealand all facing falling revenue and static fixed costs.

No comments:

Post a Comment

Note: only a member of this blog may post a comment.