World Coal Association Country Profile - New Zealand

We have provided the following information for the World Coal Association (WCA) website as part of an initiative to create a section on Country Profiles. The WCA site is an important source of information on the global coal industry. We update the information regularly as new data becomes available - last updated June 2012.

Country Background - New Zealand

This section provides key energy facts, giving a general background to the national energy scene.

Total Consumer Energy - breakdown of fuels (%)

Total Consumer Energy by fuel for 2010 was:

  • Oil 46.0%
  • Electricity 27.0% (see breakdown of electricity production by fuel type below)
  • Gas 10.2%
  • Other Renewables* 10.3%
  • Coal 4.8%
  • Geothermal Direct Use 1.8%

*wind, biogas, wood, and solar water heating

Coal production & consumption (million metric tonnes)for the 2010 Year

Coal Production & Consumption

·  Coal Production - 5.33 Mt

·  Coal Consumption - 2.7Mt

  

Coal imports & Exports

·  Coal Imports - 0.25Mt

·  Coal Exports - 2.4Mt

Production and consumption data source: Ministry of Economic Development, http://www.med.govt.nz/sectors-industries/energy/pdf-docs-library/energy-data-and-modelling/publications/energy-data-file/energydatafile-2011.pdf

Coal Resources

New Zealand has extensive coal resources, mainly in the Waikato and Taranaki regions of the North Island, and the West Coast, Otago and Southland regions of the South Island.

Total in situ coal resources are estimated at around 15 billion tonnes, more than half of which is potentially recoverable.

Breakdown of economically recoverable reserves:

  • 80% South Island lignite
  • 15% sub- bituminous
  • 5% bituminous coal

Coal Production & Consumption

A more detailed section looking at coal production and consumption.

Coal Production

New Zealand coal production in 2010 was 5.33 million tonnes (Mt), 17% up from 2009 production of 4.6Mt. Of this production, approximately 2.60Mt was bituminous, some 2.44Mt was sub-bituminous, and approximately 0.295Mt was lignite. Opencast mines supplied 3.98Mt, with the remaining 1.35Mt from underground mines.

Underground / Opencast Mining Split (%)

Underground   

25%

Opencast

75%

Five underground and 16 opencast mines were operating in 2010. Solid Energy, owner of the two largest West Coast mines, was responsible for over 82% of the national production. Production is centred on the Waikato (2.04Mt), the West Coast (2.71Mt), and Otago/Southland (0.54Mt). Over 59% of national production was from two large opencast operations, at Rotowaro and Stockton.

Coal Consumption

In 2010, New Zealand consumed some 2.7Mt of coal, again down on the usage of the previous year due to reduced coal-fired generation at Huntly (New Zealand's only one coal-fired power station - The use of this had been scaled back in 2007 in favour of gas; however, the plant was pushed into use again by a particularly dry winter in 2008 impacting on hydroelectricity production). Just over 0.25 million tonnes of coal were imported, mainly for use by Genesis for electricity production, with the remainder coming from local production.

Coal supplied around 5% of New Zealand ’s consumer energy demands. The biggest domestic users are again the Glenbrook steel mill (0.8 Mt) and the Huntly power station (0.6 Mt). Electricity generation (including cogeneration) accounted for 37.5% of domestic coal use and transformation (mainly steel making) accounted for 19%. The industrial sector, mainly cement plants (Golden Bay Cement near Whangarei and Holcim’s plant at Westport), lime and plaster, meat, dairy factories (particularly those at Clandeboye in South Canterbury and Edendale in Southland), wool, timber, and pulp and paper products, accounted for 37% of coal use, and the commercial sector - heating accommodation and service buildings in central and local government, hospitals, rest homes, and educational institutions – accounted for 2.5%. The remaining 4% was used by the agricultural, transport, and residential sectors.

Coal Consumption by Sector 2010

Sector

% of Domestic Coal consumption

Electricity generation

37.5%

Other transformation

19.2%

Industry

36.6%

Commercial sector

2.5%

Agriculture

3.3%

Residential

0.9%

Data Source: Ministry of Economic Development, Figure C.5 Table of Coal Consumption by Sector for 2010: http://www.med.govt.nz/sectors-industries/energy/pdf-docs-library/energy-data-and-modelling/publications/energy-data-file/energydatafile-2011.pdf

Electricity Generation

For the year ended December 2010, New Zealand's net electricity generation was 43,401 GWh or 156 PJ. 56.4% of New Zealand's electricity is produced from hydro with 4.5% supplied by coal.

Breakdown of New Zealand electricity production:

  • Hydro 56.4%
  • Gas 21.2%
  • Geothermal 12.8%
  • Coal 4.5%
  • Wind 3.7%
  • Others 1.4% (oil, waste heat, biogas and wood)

Data source: Calculated from Ministry of Economic Development, Table G.2b: Net Electricity Generation by Fuel Type (PJ), http://www.med.govt.nz/sectors-industries/energy/pdf-docs-library/energy-data-and-modelling/publications/energy-data-file/energydatafile-2011.pdf

In 2010, Electricity was generated by five main generating companies plus a number of small, independent generators and on-site cogenerators. The five main companies are Meridian Energy (32%), Contact Energy (24%), Genesis Energy (18%), Mighty River Power (13%) and TrustPower (5%).

World ranking

Low

Environment & Clean Coal Technologies

A general introduction to environmental issues surrounding energy consumption in New Zealand.

Specific national environmental challenges

Climate change, particularly a CO2 tax on thermal power generation. Air quality issues especially for coal use in towns with fine particulate pollution from household wood burners. Water quality particularly from old mine workings.

National regulations - emission limits, air quality standards

New National Environmental Standards on Air Quality are in the process of implementation. These have tightened restrictions on fine particulate emissions.

Government policies/actions to support clean coal technologies

A draft New Zealand Energy Strategy, a draft National Energy Efficiency and Conservation Strategy and a draft climate change policy have been released. Government energy objectives are reliability and resilience, environmental responsibility and fair and efficient energy prices for current and future generations in the transition to a low carbon energy sector.

Names of major research programmes into CCTs

Hydrogen energy for the future of New Zealand - including a major objective on production of hydrogen from carbon derived fuels.

A significant three-year research programme into CCS involving CRL Energy and GNS Science began in 2008.

International Activities

Involvement with relevant environmental agreements/organisations

Signatory to Kyoto Protocol , membership IPHE, IEA-CCC, IEA-GHG R&D Programme and Coal21, CO2CRC (Australia). See the following links:

Challenges Facing Coal

Details on specific challenges facing the coal industry and energy sector more widely

Depletion of major gas reserves is highlighting the importance of coal resources. High mining costs may mean increased imports in the near future until there is large scale use of lignite resource. Political concern over greenhouse gases means there is a possibility of specific regulations against new coal fired power stations.

Government Information

Name of relevant ministers

In 2012, the Minister of Energy and Resources under the National Government is the Hon. Phil Heatley.

National Association

Short summary of national association

The Coal Association of New Zealand (Inc.) represents coal producers and the wide range of coal users in New Zealand. The Coal Association of New Zealand represents the interests of over 95% of New Zealand's coal producers and industry users. In total, 16 coal mining enterprises in New Zealand are producing over 5 million tonnes of coal annually from 26 operating mines.

The Association liaises with the Government and the community, and promotes government and industry research investment to strengthen the industry's competitiveness and environmental acceptability. Our main research provider is CRL Energy Ltd.

New Zealand has reserves of coal that can provide affordable, environmentally sustainable and secure energy for hundreds of years. Energy is important to the New Zealand economy and a key policy objective must be to deliver the lowest cost energy possible. The need to maintain competitiveness and developing technologies demand that these coal reserves be part of New Zealand's future energy portfolio.

The Coal Association works actively to ensure coal continues to contribute to New Zealand's prosperity. Our vision and scope of activities focuses largely on the development and deployment of new technologies. Clean coal and carbon and capture technologies provide the main pathway to addressing environmental issues from coal utilization. The Coal Association is investing in research relevant to their application to New Zealand coals, principally through an industry government research and investment partnership established in 2006. Complementing this partnership is membership of key R&D organisations such as the Australian based CO2CRC, the IEA CCC and the IEA GHG R&D Program. These links and collaborations allow the Coal Association to be involved in international projects and informed on advances in coal-based energy production around the world.

In addition, the Coal Association supports the $6 million Foundation for Research, Science and Technology research programme "Hydrogen Energy for the Future of New Zealand" as a first step in New Zealand's possible transition towards a hydrogen energy economy. The Association has invested in related areas of advanced technological and environmental issues, including the development of a Hydrogen Roadmap for the coal industry and technologies. It also a member of the Carbon Capture and Storage (CCS) Research Steering Group - a joint Government/industry initiative led by the Foundation for Research, Science and Technology, which supports a three-year research programme (started in 2008) to investigate New Zealand's carbon capture and storage potential.