Climate change : a global issue : is a renewable energy target an effective response for the New Zealand electricity sector? : a thesis presented in partial fulfilment of the requirements for the degree of Master of Applied Science at Massey University

Abstract

The main objective of this thesis is to investigate the effectiveness of a mandatory renewable energy target (MRET) in reducing greenhouse gas (GHG) emissions from the electricity sector. New Zealand's electricity sector emissions have grown at a rapid rate over the last decade ( + 19%) due to an increasing reliance on thermal generation plant. Since the mid 1980's there has been increasing scientific evidence and acceptance that GHG emissions caused by human activity are reducing the amount of solar heat that would otherwise be radiated back out into space leading to climate change. The Intergovernmental Panel on Climate Change (IPCC) has found new and stronger evidence that most of the observed warming of the past 50 years is attributable to human activities. The IPCC findings show potential for significant changes in temperature ( 1.4-5.8°C by 2100), rainfall patterns and sea level (9-88cm by 2100) and adverse weather events. This will impact on the global economy, the natural environment and the quality of life for present and future generations. The Kyoto Protocol is the international vehicle for fighting anthropogenic climate change by reducing GHG emissions. Despite the US withdrawal from the Protocol in 200 l, it could still enter into force and countries that ratify it could have legally binding GHG emission responsibilities by late 2002. Domestic policy and legislation presently under development will guide New Zealand's efforts to reduce GHGs and meet its future Kyoto Protocol commitments. To assess the impact of a possible MRET, a tool was developed which evaluates the effect of five different MRET scenarios on the electricity sector's GHG emissions, the wholesale price of electricity and the level of renewable energy supply. It was found that an MRET is an effective method of reducing GHGs and increasing the level of renewable energy supply, however this effectiveness depends on the level of the target. The higher the target the higher the electricity price, which will also increase if inappropriate investment decisions lead to plant redundancy or oversupply of the market. Implementing energy efficiency measures with an MRET further reduces GHG emissions. If existing renewable generation was prioritised over thermal generation then environmental outcomes are further improved.