IEA Geothermal Implementing Agreement

Transcription

1 IEA Geothermal Implementing Agreement New Zealand Country Report

2 Figure 1 Te Mihi (Wairakei) 166 MWe expansion, fully commissioned in This was supported by reservoir modelling scenarios of sustainable production to beyond (Photo: Contact Energy). 1.1 Introduction and Overview Geothermal has long been used in New Zealand for a variety of electricity generation and direct use applications. Over the past decade electricity generated from geothermal projects has more than doubled. Recent examples include Contact Energy s Te Mihi project at Wairakei of 166 MW, fully commissioned in 2014 (Figure 1), and the Mighty River Power joint-venture development with Tauhara North No.2 Trust of Ngatamariki, consisting of 82 MWe. This was commissioned in 2013 and has been operating reliably throughout 2014 (Figure 2). Figure 2 Ngatamariki 82 MW Ormat binary power plant (the worlds largest on a single site), commissioned in 2013 (Photo: Mighty River Power). 1

3 In 2014, the share of electricity generation from renewable sources approached 80%, of which geothermal contributed 16%. The New Zealand government target for renewable electricity remains at 90% by 2025, of which about 57% is anticipated to be hydro, about 23% geothermal and 10% wind or biomass. The national target for renewable energy direct use (including biomass) is an additional 9.5 PJ/yr by This update on the status of geothermal energy in New Zealand for 2014 was sourced largely from Carey et al. (2015), Climo et al. (2015), Bromley (2014, 2015) and websites listed in section 8, especially: New Zealand Geothermal Association (NZGA), Mighty River Power (MRP), Contact Energy, and Ministry of Business Innovation and Employment (MBIE). The geothermal resource potential of New Zealand is assessed to be about 4 GWe (or 30 TWh/yr) from conventional convecting systems at depths of up to 3.5 km, mostly located within the Taupo Volcanic Zone (TVZ). The deeper, hotter, and unexplored roots (3.5-5km) of the TVZ have an estimated additional potential of at least 10 GWe. More details and resource location maps are found in the 2010 to 2013 International Energy Agency Geothermal Implementing Agreement (IEA-GIA) Annual Reports (iea-gia.org/publications/annualreports/) Key statistics regarding current status (2014) of geothermal development in New Zealand are listed in Table 1. Fully operational installed capacity is 1010 MWe, generating at approximately 80% capacity factor. This is ~25% of the assessed conventional resource potential. For environmental reasons, about 40% of the potential resource is currently in systems categorised by the regional planning authorities as protected. Approximately 93 MWe of previously installed capacity has been retired or mothballed: 34 MW at Wairakei/Tauhara, 47 MW at Ohaaki, and 12 MW at Kawerau. No new power plants were constructed in 2014, but the Te Mihi Power Plant (at Wairakei) was fully commissioned and commenced operation at full load. Direct heat statistics (Table 1) have again improved in reliability since previous annual reports. At some sites the installed capacity is still estimated from heat produced, because capacity values are not provided. The installed direct use capacity has not changed significantly since 2010, although the closure of part of a pulp & paper mill owned by Norske Skog Tasman (NST) at Kawerau in 2013, because of a decline in newsprint demand, has reduced geothermal industrial heat use. (The surplus steam supply was diverted instead to the TOPP1 power plant installed in 2013). Table 1 NZ geothermal energy use for Electricity Gross Installed Capacity (MW e) plus retired Operating Capacity (MW e) [gross less retired] Contribution to National Capacity (%) 11 Total Generation (GWh/yr) 6847 Contribution to National Generation (%) 16 Operating Average Capacity factor (%) 80 Target (% national generation by 2025) 23 Estimated NZ Potential (TWh/yr, <3.5km) Direct Use 30 Total Installed Capacity (MW th) 480 Total Heat Used (PJ/yr) 8.63 Total Installed Capacity Heat Pumps (MW th) 9.3 Total Net Heat Pump Use [PJ/yr] 0.07 Target (PJ/yr, added , with biomass) Estimated Country Potential 9.5 na = data not available; italics = estimated Industrial direct heat usage amounted to na 2

4 59% of total direct use, and included heat or steam supplied for processing: pulp & paper (Kawerau), timber (Tauhara, Kawerau, and Ohaaki), milk (Mokai) and honey (Waiotapu). Bathing and swimming facilities amounted to about 16%. Cascaded use of waste brine included aquaculture (prawn-farming) and accounted for 2%. The remainder is mostly attributed to space and water heating and green-houses. In terms of economics, the demand threshold for geothermal heating to compete successfully against coal is about 5 MWth for a 250m deep well and 45 MWth for a 2000m deep well (Climo et al., 2015). 1.2 Highlights and Achievements The role of geothermal as a major contributor of renewable energy to the New Zealand electricity supply (16% of total generation in 2014, and still growing) is significant (Figure 3). It contributes about 50% of all renewable primary energy supplied. It remains the lowest cost generation option on a per energy unit cost basis (i.e., Long Run Marginal Cost or Levelized Cost of Electricity) compared to other renewable energy or fossil-fuelled options. This is without subsidy, feed-in tariff or other economic support. However, because the development timeline for new geothermal projects is typically 5-6 years, and is also capital intensive, an observed flattening off in electricity demand over the past 5 years has seen a hiatus in mediumterm construction plans for new powerplants (of any type). Consequently, during 2014 only 2 deep make-up geothermal wells were drilled (Figure 4). Figure 3. Historical (from 1975) and projected (from 2010) growth in generation fuel-types in New Zealand. Geothermal generation continues on an upwards trend displacing coal and gas. A share of about 23% by 2025 is projected to be achievable. Data from MBIE (2015) website. 3

5 Figure 4 Trends since 1950 in New Zealand geothermal generation. Growth continues, but the drilling completion rate for new deep wells has dropped significantly in 2014 because of a slowdown in demand growth and therefore planning for new plant construction (see Figure 3). The Ngatamariki 82 MW binary power plant, the Mokai projects (115 MWe binary power plant, Miraka milk processing and Gourmet Mokai glasshouse heating), and the Rotokawa 175 MWe projects, all completed a year of reliable operation. Make-up wells were drilled at Ngatamariki and Kawerau to secure confidence in future fluid supply. Commissioning of Contact-Energy s Te Mihi 166 MW dual-flash power plant in Wairakei was completed in mid-2014, and output was brought up to full load. A delay from construction completion was caused by some technical issues with hot well pumps. Several old Wairakei turbines were retired, but a flexible operational regime was established, wherein some retired turbines will cover for maintenance outages of the more modern turbines, all supplied by the interconnected Wairakei - Te Mihi - Poihipi steamfield pipe network. This helps sustain the maximum permitted fluid utilisation and generation output within the overall Wairakei consented fluid take of 240 kt per day. To achieve this, a variation on consent conditions was granted by Waikato Regional Council allowing Contact Energy to temporarily exceed the daily fluid take limit, to make up for lost generation opportunity, whilst keeping within a 3-month average take limit of 240 kt per day. Contact Energy s Te Huka binary plant at Tauhara continued operation at full capacity of 26 MWe. The Ohaaki project continued operation at a reduced take (the maximum resource consent limit is now 40 kt/day, reduced from 60 kt/day, and matching modelled expectations regarding resource sustainability). The next stages of investment by Contact Energy at Tauhara and Taheke await growth in power demand. Other proposed geothermal projects in the Bay of Plenty region at Tikitere and Rotoma-Tikorangi are also awaiting future investment decisions or further consent application processes. At Kawerau, MRP s 100 MWe Kawerau power plant, the 23 MW TOPP1 binary power plant, the 8.3 MW GDL KA24 binary plant, the 3.5 MW TG2 binary plant and the Tasman 5 MW back-pressure steam turbine all had another good year of reliable generation. Resource consents were granted by the Bay of Plenty Regional 4

6 Council for additional geothermal fluid take at Kawerau (NTGA - 45 kt/day, MRP - 20 kt/day, Te Ahi O Maui (Eastland Generation, A8D) - 15 kt/day). Recent developments in Kawerau direct use are summarized in Bloomer (2015). At Ngawha, a resource consent application was lodged in December 2014 with Northland Regional Council by Top Energy Ltd for expansion of the existing 25 MW project in two steps each of 25 MWe, with proposed timing of 2019 to During 2014, NZ geothermal power plant natural CO 2 (equivalent) emissions amounted to about 0.83 Mt CO 2/annum (weighted average of 121 kg/mwh(e) times 6847 GWh). Direct use estimates are 0.17 Mt CO 2/annum, given that about 60% of direct use originates from steam (containing CO 2) from producing geothermal systems, and the rest from hot water. The combined net CO 2 savings relative to coal are about 6.7 Mt CO 2 (equiv.)/annum. 1.3 National Programme The role of geothermal in national policy is summarized in the 2010 to 2013 New Zealand annual reports (IEA-GIA, 2015). There were no significant changes during To summarize, there are no government financial incentives such as feedin tariffs, although an emission s trading scheme (ETS) was introduced in The NZ Energy Strategy remains committed to the government target of 90% renewable electricity by 2025, and 9.5 PJ of new direct use renewable energy (geothermal or biomass) by 2025 relative to These targets are aspirational and come with no direct financial incentives or penalties. A review of the Bay of Plenty Regional Council 2008 Geothermal Plan commenced in February Changes in the Plan will include emphasis on system management plans for multi-user systems, identification and mapping of significant geothermal features, and a consolidation of investigation, modelling and monitoring, especially for the Rotorua geothermal system. The New Zealand Geothermal Association and HERA (Heavy Engineering Research Association) updated the New Zealand Geothermal Capability Register (available at NZGA website) in April 2014, and compiled 15 industry update presentations made at the end of the 36 th New Zealand Geothermal Workshop on 26 th of November The NZGA has a number of special interest groups who are taking a lead in developing a forward program. They include: geothermal heat pumps (GHANZ), geothermal tourism, and power generation. NZGA and HERA also co-hosted a workshop on 25 th July 2014 titled Above Ground Geothermal & Allied Technologies (AGGAT). Presentations from this event are also available from the NZGA website. Geothermal industry cooperation has led to development of a revised New Zealand Code of Practice for Deep Geothermal Wells, an international best practice reference (available from the NZ Standards website). 1.4 Industry Status and Market Development Capital investment in NZ geothermal development in 2014 is estimated to have been about NZ$20M based on the level of drilling (2 wells) and final completion of major power-plant projects. For the investment total amounted to US$1.2B, of which US$543M was for field development, US$639M for power station construction, US$17M for direct use geothermal plants, and US$66M for R&D and exploration drilling (Carey et al, 2015) The major investors continue to be MRP and Contact, often in partnership with Maori Trusts (joint venture companies) such as Tuaropaki and Tauhara North No.2, as well as Ngati Tuwharetoa Geothermal Assets (NTGA) and NST (Kawerau). Jobs in the industry in 2014 have declined slightly, following the power-plant construction completions, to an estimated 638 5

7 professional (university degree qualified) staff (Carey et al, 2015). Total project installation costs have recently averaged NZ$4.5M/MWe for the larger projects. Long-run marginal costs (LRMC) of geothermal installations are still the lowest of all new generation options at about NZ$60-80/MWh, assuming 8% discount rate and stable exchange rates. Flat demand growth since 2008 for commercial electricity (Figure 3) and industrial heat has caused a postponement in some new projects planned for investment during the next 3-5 years. There will still be opportunities, however, for relatively small projects, in specific settings. The proposed 50 MWe Ngawha project in Northland, and small projects in Kawerau, are good examples. 1.5 Research and Development The focus areas for government corefunded geothermal research (GRN), amounting in total to about NZ$5M/year, remain as follows: - potential development from deeper resources; - resource delineation and geophysical exploration methods (MT and seismicity); - improved simulations of sustainable reservoir performance (modelling); - managing geochemical scaling and production chemistry; - avoidance of adverse environmental effects; - geothermal ecosystems including extremophiles (thermal bacteria); - rock-fluid interactions at high temperature and pressure; - cements for extreme geothermal environments; and - knowledge about resources and technologies for direct use. Industry-funded research activities include applied research projects through collaboration between government-funded and university graduate research programs. These focus on opportunities and practical problem-solving tasks associated with subsidence, scaling, tracer performance, mineral extraction, reservoir simulation, and injection technology. Other research included: a) supermodels - developing code to create models on large regional scales for investigating interactions between neighbouring geothermal systems; b) waste-to-wealth an investigation of mineral potential from brines; c) microbial diversity of geothermal ecosystems, the 1000 springs project (Figure 5), and d) tracking the magmatic signatures of geothermal fluids. Figure 5. Kuirau Park (Rotorua) geothermal feature (Photo: M. Low, GNS Science) Above Ground Geothermal & Allied Technologies (AGGAT) is a New Zealand Heavy Engineering Research Association (HERA) led co-operative research platform to support, for example, the development of Organic Rankine Cycle (ORC) plants manufactured for the low enthalpy, geothermal and waste heat markets. Presentations from a direct use workshop held in Rotorua in 2014 ( Grow Rotorua ) are available online ( Coyle et al (2014) and Climo et al (2015) discussed barriers and solutions for direct use uptake. Geothermal heat pumps are recognised as having a considerable future growth potential in New Zealand. A collaborative organisation, Geothermal Heat-pump Association of New Zealand (GHANZ) has goals of running workshops, establishing a website and improving information dissemination. 6

8 1.6 Geothermal Education The University of Auckland continues to operate the Geothermal Institute PGCert diploma course (with 25 governmentsponsored scholarships per year targeting the training needs of countries such as Indonesia), along with a Master of Energy program and other short courses. A total of 48 students (46 of whom were from overseas) enrolled in the PGCert Geothermal Technology 5-month course in The Geothermal Institute also organised the 36th NZ Geothermal Workshop, held in Auckland in November. The University of Canterbury also runs a geothermal graduate program. Regular geoscience and engineering professional training courses are run by GNS Science along with universities in several developing geothermal nations, particularly Indonesia. 1.7 Future Outlook By 2015 it is anticipated that geothermal generation should reach about 18% of total generation, or about 7 TWh/yr. A transmission line improvement between Wairakei and Whakamaru will relieve transmission constraints which should promote investment in more low-cost geothermal generation in the Taupo area in the central North Island of New Zealand. Growth through new capacity will likely be delayed by current flat demand for at least 4 years, particularly in large geothermal plant planning and construction. Some smaller geothermal projects may proceed as local economic factors prove favourable and more coal-fired units are shut down or base-load CHP gas plants are converted to peaking units. Future growth in demand may result from electric vehicle conversions, off-shore cable connections or energy-intensive industry growth. These would be subject to normal market drivers and constraints. Possible additional projects are in the planning stages at Taheke (two of ~35MWe), Tikitere (~45 MWe), Rotoma- Tikorangi (~35MWe), and Tauhara (250 MWe). Further expansion of Ngawha by Top Energy of up to 50 MWe is anticipated for 2019 to NTGA (Kawerau) have consents in place for a ~20 MW project. The Te-Ahi-O-Maui geothermal project at Kawerau is at the stage of starting tender negotiations for a 20 MWe power plant, suggesting completion might be achieved by Together, these plans could potentially amount to an additional 450 MWe by Direct use and heat-pump deployment are expected to grow steadily as information becomes more widely available, and new heat-intensive, process industries become established to make use of the growing supply of primary produce such as wood, dairy and horticultural crops. Relatively low paper demand will probably still adversely affect direct steam use at Kawerau for some years, however energy supplier NTGA is investigating development of a large geothermally-heated greenhouse complex. NST and others are researching opportunities for wood-based biofuels in conjunction with geothermal energy use for process heat. A coalition of project construction companies, named Geothermal New Zealand, continues to promote efforts to maintain work continuity in the New Zealand geothermal industry. 1.8 References and Websites Bloomer, A., (2015). Kawerau industrial direct heat use: recent developments. World Geothermal Congress Proceedings, Melbourne, Australia, April, 2015, 8p. Bromley, C.J., (2014) New Zealand Geothermal Progress: Celebrating Success through the Test of Time Invited Paper, Proceedings 36th New Zealand Geothermal Workshop, 24th-26th November, Auckland, 5p. Bromley, C.J., (2015) Geothermal, where to now? Magazine article in Energy NZ, Autumn, Vol.9, No 2, April 2015, ISSN , 7

9 s_autumn_2015 Carey, B., Dunstall, M., McClintoch, S., White, B., Bignall, G., Luketina, K., Robson, B., Zarrouk, S. (2015), New Zealand Country Update. Proceedings World Geothermal Congress 2015, Melbourne, Australia, April, Climo, M., Hall, J., Coyle, F., Seward, A., Bendall, S., Carey, B., (2015) Direct Use: Opportunities and Development Initiatives in New Zealand. Proceedings World Geothermal Congress 2015, Melbourne, Australia, April 2015., Coyle, F.J.: Architects, Engineers and Energy Managers Perceptions of Low Temperature Geothermal and Biomass Energy Technologies: Barriers to Uptake and their Potential Solutions. GNS Science Report 2014/12, (2014), 102p. 1.9 Acknowledgements Brian White (NZGA Executive Officer) is acknowledged for his many contributions and insights Authors Chris Bromley Geophysicist Brian Carey Geothermal Applications and Industry Specialist GNS Science Wairakei Research Centre Private Bag 2000 Taupo 3330 New Zealand IEA-GIA (2015) website: iea-gia.org MBIE (2015) "New Zealand Energy Quarterly" Mighty River Power (2015) Quarterly Operational Reports Centre/Reports-and-Presentations.aspx NZGA (2015) Newsletters, Action Plan, papers, presentations, and submissions, at 8

10 To Find Out More If you are interested in learning more about the IEA Geothermal Programme, or you wish to join the IEA-GIA: Contact: IEA-GIA Secretary c/o GNS Science Wairakei Research Centre Private Bag 2000 Taupo 3352 NEW ZEALAND Tel: OR Visit the IEA-GIA Website IEA Geothermal Supporting and Advancing Worldwide Sustainable Geothermal Energy Use Through International Cooperation The IEA Geothermal Implementing Agreement (GIA), also known as the Implementing Agreement for a Cooperative Programme on Geothermal Energy Research and Technology, functions within a framework created by the International Energy Agency (IEA). Views, findings and publications of IEA GIA do not necessarily represent the views or policies of the IEA Secretariat or of all its individual member countries.