David Keat: Energy Security Expert on MBIE data showing an increase in renewable energy generation, drop in total energy use
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What do the latest MBIE figures reveal about New Zealand’s renewable energy growth?
NB have had a look at our energy use. Solid generation now is up sixty six percent. Geothermals had a new record as well. Renewables now make up eighty eight point five. Is that a lot? Yeah it is higher share since nineteen eighty one. Uh David Keats, an energy security expert, and he's with us on this. David, morning to you. Yeah, good morning Mike. I'm reading in the report Low Industrial Use. What's going on there? Is that a sign of the economy?
Why are solar farms considered “dirt cheap” and attracting many new investors?
Uh, most likely. Um, I would imagine so. The generation side is just quite clear it's because the um Uh contact uh Mercury and a few others have put a new uh G thermal generation so when you've finished building it you bring it online so that's what that's about. And the solar's just uh on because it's dirt cheap. So uh a whole lot of people are piling into solar to make some money. Are we making
yeah, that that's my next question. Are we making the right decision? If you if big picture stuff, you know, wind, solar, whatever, uh is solar the answer and are we making the correct decision in that?
Oh, solar's part of the answer, but no, it's nowhere near the solution. It's um one corner of the correct answer.
Okay.
Is solar power the main solution to New Zealand’s energy future, or just one piece of the puzzle?
Um the correct the correct answer is a bunch of things, you know. Um The simple thing is that renewables, so that's geothermal, wind, solar, hydro, are just much, much cheaper than coal and gas, right? So if you want cheaper electricity, that's what you go. You that's what you do. You have more solar, more thermal um geothermal More um wind, probably not any more hydro because we got a lot of that. Yeah. And you just keep building it. And that's why the wholesale price is the public may not know, but the wholesale price has been drifting down because we've got a lot more yeah. A lot more um, but no but that's when it comes to But David, that's one of the
concerns.
How does the falling wholesale electricity price relate to the surge in renewables?
So so does the model work or will the model work in the sense because all these people building all the solar and wind and stuff, at some point they're not going to invest in doing that if they're just gonna ha we're gonna have so much, we're gonna have abundance that the price of power falls through the floor because that's not what they're interested in, is it?
No, you you're quite right. The um the the market model is exactly right. That's why the Gen Taylors have only just started building now, because now they can sell cheap electricity to data centers until now they haven't. So they've held off building anything new. Um i y you're quite right. If you overbuilt the renewables, the spot price would would go to possibly negative, certainly very low. Um so the the there's a there's a conundrum, right? If you're a citizen, what you want is for an overbuild of renewables 'cause the price will come down a whole lot. If you're a shareholder and a gentler, which I am, uh then you don't want that because your um gentlers' profits are going to fall like a stone. So there's a the y the market cannot deliver cheap electricity.
What market‑design challenges arise if renewables are over‑built and prices go negative?
Um but in the meantime what's happening here there's another small wrinkle because Um usually you have to have an awful lot of money to build a power station, whether it's coal, uh uh geotherm or whatever, offshore wind. They're all very expensive. But small solar farms are relatively cheap. So smaller players can get into that game and they are and it's good. So small companies can build a solar farm up north, do a deal with a farmer and um supply Solar power to the to the grid. It's all good. Um if of course if I keep doing that at some point the price will come down a
lot. Exactly. Precisely, which is what's happening in Australia. David, appreciate your insight, David Keat, who's an energy security um specialist.
How can small companies and farmers team up to build low‑cost solar farms and feed the grid?
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Chapters
6 chapters
1
What do the latest MBIE figures reveal about New Zealand’s renewable energy growth?
0:00–0:21
2
Why are solar farms considered “dirt cheap” and attracting many new investors?
0:21–1:01
3
Is solar power the main solution to New Zealand’s energy future, or just one piece of the puzzle?
1:01–1:34
4
How does the falling wholesale electricity price relate to the surge in renewables?
1:34–2:30
5
What market‑design challenges arise if renewables are over‑built and prices go negative?
2:30–3:06
6
How can small companies and farmers team up to build low‑cost solar farms and feed the grid?
3:06–3:14
Speakers
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