New Zealand may reach 6 GW of solar by 2050

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New Zealand could cover its electricity demand with a generation mix based exclusively on wind, solar, geothermal and hydropower by 2050, according to Transpower New Zealand, a state-owned enterprise responsible for electric power transmission.

The power provider said it may see the share of renewables grow from around 80% at present to 95% in 2035 and 100% by 2050.

Under their most likely scenario – the Accelerated Electrification base case – electricity demand is expected to raise from 42 TWh in 2020 to 70 TWh by 2050, due to population growth and the rising electrification of heat and transport. “It is important to note that while electricity demand is estimated to increase by 68%, peak demand only increases by 40%, reflecting the increasingly important role of demand response solutions,” the company said.

This scenario, according to Transpower, envisions a generally positive global context, with growing political and social pressure to decarbonize. It also assumes that electrification will continue to be supported by the New Zealand government as a high priority way to decarbonize the economy, they said.

Under these conditions, the share of solar will grow from just 0.2% in 2020 to 0.5% in 2025 and 1.7% in 2030. After another five years, this percentage is predicted to reach 4.3% and in 2040 is expected to come in at 5.7%. In 2045 it should reach 7.6% and finally 9.3% in 2050.

By the middle of the century, remaining electricity demand will likely be 24.8% met by hydropower, 19.6% by wind, 12.5% by geothermal power, and 3.8% by other minor renewable energy sources.

In terms of installed capacity, solar is expected to increase from around 100 MW in 2020 to only 300 MW in 2025 and 1.1 GW in 2030. Most of the capacity deployed so far is forecast to come from distributed generation, with large-scale PV having only a marginal role. In 2035, installed solar power should reach 2.7 GW, including 1 GW of utility-scale and 1.7 GW of distributed generation. With utility-scale PV seeing its share unchanged at 1 GW until 2050, distributed resources are expected to grow to 2.6 GW in 2040, 3.8 GW in 2045 and 4.9 GW in 2050.

“Distributed solar uptake is expected to be driven by the continued falling cost of solar panels, improved installation processes, economic incentives and changing social values,” the utility noted.

Distributed storage is expected to increase from 750 MW in 2035 to 2.5 GW by 2050. “Uptake of distributed batteries is expected to be supported by ongoing cost reductions from $2,200 per kW today to $1,500 in 2035 and $1,000 in 2050,” the company said.

Utility-scale storage is expected to grow from 400 MW in 2034 to 700 MW in 2040. “Utility-scale battery costs are expected to reduce by 5% per year, becoming viable for deployment in the late 2020s,” the utility said.

Furthermore, the company predicts that the electrification of heat and transport, in conjunction with a growing population, could lead to a 68% increase in electricity demand, from 42 TWh in 2020 to 70 TWh by 2050.

“Getting to 95% renewable generation by 2035 is challenging but achievable. It also represents the lowest cost generation mix for consumers,” the utility said. “However, getting from 95% to 100% renewable electricity by 2050 will be highly challenging and potentially expensive.”