New Zealand has increased fossil fuel production to meet electricity demand as hydropower output hit a decade-low.
According to energy think tank Ember, electricity production from fossil fuels amounted to 4.36 terawatt hours (TWh) between January and July, up 67% compared to the same period in 2023. Reuters reported.
The 1.75 TWh year-on-year increase in fossil fuel generation is almost in line with the 1.86 TWh decrease in hydropower generation over the same period in 2023-2024.
According to Energy technologyparent company of ‘s, Global dataNew Zealand’s total fossil fuel generating capacity in 2023 was 13.13%, significantly lower than hydro’s 59.29%.
Hydropower is New Zealand’s main source of electricity, but extreme weather has had a major impact on generating capacity.
Drought caused hydropower production to fall to 48.6% in July, the lowest level in almost a decade.
The rapid decline in hydropower has forced the country to switch to other sources, such as fossil fuels, to meet rising energy prices and ensure energy security.
This is not an isolated incident. Brazil’s government shut down two of its largest hydroelectric power plants earlier this month due to severe drought, and also had to increase fossil fuel production to compensate for the loss of hydropower.
Due to limited supply, electricity prices in New Zealand are now almost twice as high as in Australia.
To counter the price increase, the New Zealand government has announced that this will revoke an earlier ban on permits for offshore oil and gas extraction and accelerate the import of liquefied natural gas.
While these measures were taken to ease rising energy prices and increase the country’s energy security, they could take years to impact gas supplies to energy producers. New Zealand is still expected to face tight supplies of generation fuels for the remainder of 2024.
Because hydropower relies on high rainfall, increased deployment of solar energy is likely the best solution for a more sustainable recovery of generation levels.
“New Zealand boosts fossil fuel production as hydropower hits decade low” was originally created and published by Energy technologya brand of GlobalData.
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