Press release – Green Building Council
A new analysis of the Department of Environment’s recent modelling of fossil gas demand and MBIE’s latest fossil gas production forecasts show that the current shortage will become even more severe in the coming years unless the government takes action to reduce demand, New …
New analysis of the Ministry of Environment’s latest fossil gas demand modelling and MBIE’s latest fossil gas production forecasts show that current shortages will increase dramatically in the coming years unless the government takes action to reduce demand, says Andrew Eagles, CEO of the New Zealand Green Building Council.
“Comparing the two official forecasts, the current inability to meet demand with fossil gas will increase even further. In five years, production will only meet 63% of demand. In a decade, it will be just 43%. This means skyrocketing prices for families, businesses, industry and electricity producers. The families who can pay the least will be forced to do without, even if they have no alternative heating options. It will force more gas-dependent industries to cease production, costing jobs and export revenues. Since gas production determines the cost of electricity, this means higher electricity prices for households and businesses.
“New gas discoveries will not close the deficit. Existing fields are producing less than expected despite billions in investment. Offshore exploration had ground to a halt before the ban due to a lack of discoveries. If new exploration is carried out and new discoveries are made, it will take at least a decade to produce at scale, which would probably still not be enough. Importing fossil gas would require billions in infrastructure investment, increase emissions and expose New Zealand to international price shocks. At current international prices, buying gas from abroad to make up the domestic supply deficit would cost $11-14 billion by 2035.
“The Government must act now with the new Emissions Reduction Plan to reduce demand and ensure Kiwis are not left out in the cold as shortages worsen. Space and water heating in buildings uses a lot of fossil gas, which can easily be replaced by electric heating. Capital costs are the only obstacle the Government can remove by promoting the Warmer Kiwi Homes program and restoring GIDI funding.
“Better building insulation will reduce heating needs and reduce peak electricity demand, which is often met by fossil gas power stations. Solar power for homes can be promoted to replace fossil gas generation. The government must urgently introduce new policies to promote both insulation and solar power.
“If we act quickly and replace fossil gas with electricity for heating, reduce heating and peak power demand through insulation, and boost solar power generation, we can use the remaining fossil gas in the industries where it is essential.
“Doing nothing and hoping that more fossil gases will be found is not a responsible strategy. The answer is to act now and reduce the need for fossil gases,” says Eagles.
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