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Nuclear Energy Prospects in New Zealand

(Updated June 2014)

  • New Zealand is one of the few developed countries not using electricity (indigenous or imported) from nuclear energy.
  • As hydro-electric potential was progressively utilized, nuclear power featured in national power plans from 1969 to 1976.
  • Concern about global warming due to carbon dioxide emissions from burning fossil fuels, especially coal, coupled with impending electricity shortages in Auckland, is putting nuclear energy back on the agenda.

New Zealand has depended primarily on hydro-electric power for its electricity for many years, but scope for expansion is limited and even the reliability of present capacity depends on capricious rainfall. Of 44.3 billion kWh of electricity generated in New Zealand in 2012, 22.8 TWh (51%) was hydro, 9.0 TWh gas, 3.6 TWh coal, 6.2 TWh geothermal, 2.0 TWh wind and 0.6 TWh biomass. For 4.4 million people, average per capita consumption is thus about 8900 kWh per year, or 7600 kWh if aluminium smelting is treated as largely an electricity exporta.

The power is produced from 9.7 GWe capacity, including 5.25 GWe hydro, 1.7 GWe gas-fired, 1.0 GWe coal-fired and 0.7 GWe geothermal – mainly run as baseload, and 0.5 GWe wind. 

There has been no large-scale increase in hydro capacity since the Clyde Dam on the Clutha River was commissioned in the early 1990sc. As a result, growth in demand since 1990 has been mostly met by gas-fired plant, at least until the 1000 MWe state-owned Huntly plant shifted to using coal for 80% of its energyd.

Auckland's power supply is particularly vulnerable to even minor incidents, and major interruptions have occurred in recent years. Nationally, new baseload capacity is required.

Nuclear-related policy

In 1968, the national power plan first identified the likely need for nuclear power in New Zealand a decade or more ahead, since readily-developed hydro-electric sites had been utilized. Plans were made and a site at Oyster Point on the Kaipara harbour near Auckland was reserved for the first plant. Four 250 MWe reactors were envisaged, to supply 80% of Auckland's needs by 1990. But then the Maui gas field was discovered, along with coal reserves near Huntly, and the project was abandoned by 1972.

In 1976, the Royal Commission on Nuclear Power Generation in New Zealand was set up to inquire further into the question. Its 1978 report said that there was no immediate need for New Zealand to embark upon a nuclear power program, but suggested that early in the 21st Century "a significant nuclear programme should be economically possible."

In 1987, the New Zealand Nuclear Free Zone, Disarmament, and Arms Control Act was passede. This was largely a symbolic statement of opposition to nuclear war and weapons testing, and it prevented the visits by nuclear-propelled or nuclear-armed vessels (primarily US ones). The New Zealand Nuclear Free Zone established under the Act does not ban land-based nuclear power plants.

Electricity options

In the October 2007, the government published its New Zealand Energy Strategy to 2050, which included a target for renewable sources to provide 90% of electricity generation by 2025.2 However, following the 2008 general election, the new Minister of Energy and Resources announced that the country's energy strategy would be updated3. The draft replacement strategy, published by the Ministry of Economic Development in July 20104, retains the "aspirational, but achievable" target of 90% renewables by 2025. No mention of nuclear power is made in the draft strategy.

There is limited potential for development of new hydro-electric generation, and opposition to new projects on environmental grounds is strong.

Natural gas supplies from the Maui field – which has not lived up to initial expectations – are diminishing, although supplies from newer fields are partly offsetting the decline in productionf.

Coal is plentiful, particularly lignite in Southland. Huntly power station has been using mostly imported coal from Australia and Indonesia since it switched to 80% coal fuel when New Zealand's gas production started to decline. The future use of coal is constrained by the need to limit carbon dioxide emissions, or pay substantially for themg. Carbon capture and sequestration costs, if the technology is proven, will be very high.

New Zealand has a large geothermal resource, mostly concentrated around the Taupo Volcanic Zone in the central North Island, and the share of electricity from geothermal power is expected to growh.

Wind is a well-known feature of many parts of New Zealand, and is already well used, with some of the highest capacity factors in the world. Moreover, there is a very good natural match between wind and hydro, in that the latter can be called into action or adjusted very quickly to compensate for wind variability. (Denmark's high wind usage depends on Norway's hydro supplies, for instance.) However, optimum sites for wind turbines do not necessarily coincide with hydro power availability or load centres. There are also aesthetic considerationsi. Finally, the Electricity Commission has raised questions of how much wind power can be put into the grid system without creating instability, due to its intermittencyj. (See also information page on Renewable Energy and Electricity.)

Nuclear power remains an option for New Zealand, using relatively small units of 250-300 MWe each, in power stations located on the coast near the main load centres. A bolder initiative would be to build an 1800 MWe nuclear power station north of Auckland, using two or three larger units.

However, nuclear power does not enjoy much public or political support. A 2008 survey5 found that only 19% of New Zealanders included nuclear when asked to choose the best energy sources for the country in the next 10 yearsk. On the other hand, a 2005 survey of business leaders showed that 94% were concerned about future energy supply in New Zealand, and nearly two-thirds supported investigation of nuclear power6.

New Zealand has shown itself interested in principle rather than merely pragmatic considerations and has sought to project a clean, green image. It is one of the only developed countries without even a research reactor, so it relies on Australia's Opal reactor for its supply of medical isotopes. Now unable to depend on hydro power as much as earlier, and having to retreat from using gas extravagantly for power generation, as well as there being some discomfort over dependence on coall, New Zealand will find it increasingly difficult to avoid considering nuclear power.

Nuclear is a sustainable option, able to enhance the country's desired image. With minimal aesthetic impact, it would provide the power for Auckland's continued growth, including energy-intensive industry.

Uranium

No significant uranium deposits are known, but there is a proposal to mine phosphate from the sea bed on the Chatham Rise, extending 1000 km offshore east of the South Island7. An average of 240 ppm uranium occurs in the phosphates, which would be dredged and processed onshore at the rate of about 1.5 million tonnes per year, hence potentially yielding up to 360 tU per year.


Further Information

Notes

a. Most of the output of the New Zealand's largest hydro-electric power station, Manapouri Power Stationb, is supplied to New Zealand Aluminium Smelters Limited (NZAS) located on Tiwai Point, near Invercargill1. NZAS is a joint venture between Rio Tinto Alcan (79.36%) and Sumitomo Chemical Company (20.64%). Rio Tinto Alcan is the successor company to Comalco, which was acquired by Rio Tinto in 2000. Comalco was renamed Rio Tinto Aluminium in late 2006 before being renamed Rio Tinto Alcan following Rio Tinto's acquisition of Alcan. The smelter, which is one of the world’s largest, was opened in 1971. NZAS is the largest single consumer of electricity in New Zealand. [Back]

b. The underground Manapouri Power Station commenced operation in 1969. The station is owned and operated by state-owned Meridian Energy, which is the largest generator in New Zealand, accounting for 27% of production in 2008. Manapouri's design capacity was 700 MW, but could not be operated above 585 MW due to larger than expected friction between the water and the tailrace tunnel. Between 1997 and 2002, a second tunnel was constructed, allowing operation at maximum capacity. Between 2002 and 2008, the seven generating units were upgraded to 121.5 MW each, bringing the total installed capacity to 840 MW. However, it can only operate at less than 730 MW due to limits required by the resource consents. Meridian is seeking new resource consents, which would allow Manapouri to be operated at 830 MW. [Back]

c. The 432 MW Clyde Power Station on Lake Dunstan commenced operation in 1992 after overcoming much opposition to the development. It is one of two large dams on the Clutha River owned and operated by Contact Energy, and together they account for around 10% of the country's total electricity production. The Clyde Dam is the third largest dam in New Zealand. Contact Energy is the second largest generator in New Zealand and in 2008 accounted for 24% of the country's electricity generation. The company was split from the state-owned Electricity Corporation of New Zealand (ECNZ) in 1996 and is 51% owned by Australian company Origin Energy.

In late 2008, Contact Energy confirmed it was considering old plans for for a number of possible future hydro developments ranging from 86 MW and 350 MW on the Clutha River. These plans were originally developed by Contact's predecessor, ECNZ. Other hydro projects under consideration are: Meridian Energy's North Bank Tunnel Project on the Waitaki River in South Canterbury, which would have a capacity of around 200 MW; TrustPower’s 72 MW Wairau scheme in Marlborough; and Meridian Energy’s 65-85 MW Mokihinui station on the West Coast of the South Island. [Back]

d. The 1448 MW Huntly Power Station located 70 km south of Aukland is New Zealand's largest thermal power station. The station consists of: four 250 MWe units (units 1-4) that can burn coal or natural gas; a 400 MWe combined cycle gas turbine (unit 5); and a 48 MWe open cycle gas turbine (unit 6). The station is owned and operated by state-owned Genesis Energy, the third largest generating company in New Zealand (after Meridian Energy and Contact Energy). It can provide up to 20% of the country's electricity but this can vary according to conditions imposed by its resource consents.

The original 4 x 250 MWe steam plant uses water from the Waikato River to cool the condensers. Its licence requires that the maximum temperature of the river downstream of the station is less than 25°C. During summer, when the river temperature upstream can reach 24.5°C, the station must reduce the generation to remain within the temperature constraints on cooling water. This has meant that Huntly has been reduced to 40 MW total output on very hot days. To counter this, cooling towers have been built so that one 250 MWe unit is always fully available. [Back]

e. In 1984, the new Labour government pledged to declare New Zealand nuclear free. In February 1985, New Zealand refused entry to the destroyer USS Buchanan, resulting in the USA suspending its obligations towards New Zealand under the Australia, New Zealand, United States Security (ANZUS) Treaty. Then, under the Nuclear Free Zone, Disarmament, and Arms Control Act 1987, the New Zealand government established the New Zealand Nuclear Free Zone. The text of the New Zealand Nuclear Free Zone, Disarmament, and Arms Control Act 1987 is on the Parliamentary Counsel Office website for New Zealand Legislation (www.legislation.govt.nz).

In May 2000, the Green Party introduced the New Zealand Nuclear Free Zone Extension Bill, which sought to extend the nuclear-free zone up to the 200-mile (370 km) exclusive economic zone (the Act covers up to 12 miles from the shore), but this was thrown out 108 to 7 two years later.

In July 2005, a Bill to delete Section 11, which bans the entry of nuclear-propelled ships into New Zealand waters, was thrown out 107 to 9. [Back]

f. In September 2006, production commenced at the Pohokura gas field, which is now the largest producer of gas in the country (accounting for 40.6% of production in 2008). The smaller Kupe Gas Project near the Maui field was officially opened in March 2010. [Back]

g. The New Zealand Emissions Trading Scheme (ETS) formed a key part of the October 2007 New Zealand Energy Strategy to 2050 and ETS legislation was passed in September 2008 under the Climate Change Response (Emissions Trading) Amendment Act 2008. However, in February 2009, the new Minister of Energy and Resources, Gerry Brownlee, announced that the energy strategy was being revised. In December 2009, the Climate Change Response (Moderated Emissions Trading) Amendment Act 2009 was passed; this amended the ETS to introduce a transition phase between 1 July 2010 and 31 December 2012. During this period, emission units can be bought for A$25 (€17) and each unit will permit the holder to emit two tonnes of carbon dioxide, falling to one tonne after the transition period. [Back]

h. The 140 MWe Nga Awa Purua geothermal power station located northeast of Taupo started supplying power to the grid early in 2010 and became fully operational in April. It is a joint venture between state-owned Mighty River Power, and Tauhara North No.2 Trust, and follows on from Mighty River Power's 100 MWe Kawerau geothermal power station, which was completed in July 2008. The Mighty River Power/Tauhara North No.2 Trust partnership also developed the 100 MWe Ngatamariki Geothermal Power Station which came on line in mid 2013 at a cost of $142 million. Its energy converters are fed by geothermal fluid at 193ºC from up to 3000 metres depth. Meanwhile, in September 2009, Contact Energy received final resource consent approval to construct the 220 MWe Te Mihi Power Station in the Taupo region. The station will replace the company's 181 MWe Wairakei Power Station, which was commissioned in 1958. Contact Energy is also planning to build Tauhara Stage Two, a 250 MWe geothermal plant that it hopes to begin commissioning in 2014. [Back]

i. Aesthetically, both wind turbines and high-voltage transmission lines are seen by some as a blot on the landscape and detrimental to tourism. [Back]

j. See for example the page on Wind generation projects on the Electricity Commission's website (www.electricitycommission.govt.nz). [Back]

k. Respondents were given a list of electricity sources and asked to tick all they considered appropriate. While nuclear was favoured by only 19%, coal-fired and gas-fired generation fared much worse with only 8% and 9% respectively of respondents favouring these options. Wind and solar were the most popular, being chosen by 77% and 69%, respectively.

Respondents favoured the proposed ban on building new thermal baseload coal and gas power plants in the next 10 years (see Note l below), with 58% in favour and 26% against. However, when asked whether trading should be allowed in emissions credits that were originally granted to power companies which have lowered emissions by building nuclear power plants abroad, more respondents disagreed (43%) than agreed (33%), and 24% responded "don't know".

The survey of 3546 respondents was carried out by national online survey panel, ShapeNZ, run by the New Zealand Business Council for Sustainable Development. [Back]

l. The October 2007 New Zealand Energy Strategy to 2050 states: "There should not be a need for any new baseload fossil fuel generation investment for the next ten years," and state-owned utilities (Meridian Energy, Genesis Power and Mighty River Power) were ordered not to invest in new thermal baseload plants. Accordingly, a 10-year moratorium on new baseload fossil-fuel generation was imposed under the Electricity (Renewable Preference) Amendment Act 2008 passed in September 2008. Soon after the new National Party-led government came into office, the Electricity (Renewable Preference) Repeal Act 2008 was passed in December 2008, repealing the moratorium. [Back]

References

1. NZAS and Meridian Energy Ltd sign power contract, Meridian Energy Limited news release (1 October 2007) [Back]

2. New Zealand Energy Strategy to 2050 - Powering Our Future: Towards a sustainable low emissions energy system, New Zealand Ministry of Economic Development, October 2007 (ISBN 9780478310870) [Back]

3. Unlocking New Zealand's Energy and Resources Potential, New Zealand Government (24 February 2009) [Back]

4. Draft New Zealand Energy Strategy and the Draft New Zealand Energy Efficiency and Conservation Strategy - Developing our energy potential, New Zealand Ministry of Economic Development, July 2010 (ISBN 9780478358629) [Back]

5. ShapeNZ poll: Most preferred energy sources in next 10 years, ShapeNZ (7 April 2008) [Back]

6. Let's look at N-power, nzherald.co.nz (6 September 2005) [Back]

7. Chatham Rock Phosphate Ltd, Marine Consent Application and EIS, May 2014 [Back]

General sources

Nuclear Power Generation in New Zealand: Report of the Royal Commission of Inquiry, Royal Commission on Nuclear Power Generation in New Zealand, 1978
New Zealand Energy Strategy page on the Ministry of Economic Development website (www.med.govt.nz)
The New Zealand Emissions Trading Scheme page on the New Zealand government's Climate change information website (www.climatechange.govt.nz)