Hydrogen not a shortterm option for Huntly: Genesis

HYDROGEN may be the ideal fuel to provide drywinter power supplies but it may not be economic before 2030, MPs heard yesterday.

Genesis Energy plans to stop using coal at its dualfuel Huntly plant in all but emergency situations by 2025, and altogether by 2030.

Chief executive Marc England said the firm’s Huntly coal stockpile was the only means the country had at present of meeting a potential 3000 gigawatthour generation shortfall each winter if hydro lakes were low.

Hydrogen was a potential replacement, given it was relatively cheap to store, and particularly if it could made through renewable processes, he said. Unfortunately, it was uneco nomic right now.

‘‘That’s the one fuel that could provide that 3000GWh of seasonal backup in New Zealand in the longer term,’’ Mr England told Parliament’s transport and infrastructure select committee.

‘‘It may not be as soon as 2030.’’ Meeting winter power demand — particularly in a dry year — is the biggest challenge to the Government’s calls for a 100% renewable generation system by 2035. Some in the Labourled coalition have also promoted a ban on further gasfired generation, despite the sector being more than 80% renewable now and contributing only about 5% of the country’s emissions.

Several hydrogen pilots are getting under way in different parts of the country.

Genesis is the country’s biggest thermal generator but also oper ates three hydro schemes. It has a small wind farm in Wairarapa and has partnered with Tilt Renewables to develop a 100MW wind farm at Waverley on the southern Taranaki coast.

But it is the firm’s ability to burn either coal or gas in the ageing Rankine turbines at Huntly that makes its operation central to security of national power supplies. The coal stockpile — which can sit unused for years at a time — provides ample flexibility to generate when lakes are low, when gas supplies are interrupted, or during other system emergencies.

The two 250MW units have been running hard on imported coal in the past two months because of the recent shutdown of part of the Pohokura gas field.

The committee heard that in the year through June, more than 80% of that flexible supply was sold to other power retailers and major users.

‘‘Everyone depends on Huntly, not just the Genesis customers,’’ Mr England said. The company was not acting recklessly and declared its intention to stop using coal early so the industry as a whole could respond.

‘‘Right now we don’t have a solution. At the moment there is no alternative to that coal stockpile, but we believe as an industry and a country we’ve got 12 years to work it out.’’

In response to questions, Mr England said New Zealand had plenty of wind and geothermal generation options to meet demand if electrification of transport and industry took off.

But he said the country must look at all its options if it was to decarbonise its generation industry. There would be no single solution and New Zealand should ‘‘absolutely’’ be looking at whether it could increase its hydro generation capacity. That could include increasing the maximum storage levels of existing schemes and lowering their minimum lake levels.

Mr England noted ‘‘overbuilding’’ renewable supplies to reduce dryyear risk would put more cost on to customers.

Gas also remains important, and the Government’s recent ban on new offshore exploration will probably flow into higher gas and electricity prices.

Prices would then tend to rise towards parity with imported gas. While the timing of that was hard to pick, Mr England said that price pressure could become evident in the mid2020s. — BusinessDesk