Greater flexibility in gas supply needed

Gas is vital to New Zealand’s energy security in the short to medium term and is likely to have a part to play in the longer term depending upon future technology solutions, MBIE confirmed in its briefings to the incoming ministers of energy and resources.

But currently there are some constraints in using gas to supplement other energy sources to cover short-term periods of exceptionally high demand for electricity on winter mornings and evenings.

The MBIE briefings note that the current physical gas system is not best designed to respond to sudden peaks in demand for electricity generation.

“The system delivers gas at a relatively constant flow and if more gas is needed in one place it needs to be diverted from somewhere else.

“Electricity generators buy gas for peaking and firming only when they need it, in comparatively small amounts and on a short-term basis.

“At present this can be supplied by the market, including through current gas storage. However, from time-to-time greater amounts are needed.”

With increasingly more intermittent generation from renewable sources such as wind and solar creating greater variability in electricity supply, New Zealand will need greater flexibility in its gas supply, the briefings warn.

(See MBIE’s briefings to Ministers)