GNE - Genesis Energy

[Toddy]

NZO. AU rig arrived yesterday to drill the Booth well in the Perth Basin.

Looking for gas for Australians now.

So yes, thanks to everyone out there who voted for Jacinda.

[xafalcon]

I could imagine wind quickly becoming significant enough to cause problems without sufficient storage, but solar is still less than 1% of generation - is that really enough to cause problems? Not saying that day won't arrive, but I'd have thought there's some room to grow there.

You are underestimating solar capacity four-fold. Unlike all other generation types, the majority of solar generation currently exists as distributed generation as rooftop installs on kiwi homes and businesses, and does not feed into the wholesale market (it displaces demand from and/or feeds into retail market). Refer to Wiki "solar power in new Zealand" for current estimates and future projects to get an understanding of the situation

Commercial solar is growing at the greatest rate by a huge margin. It is quick to install and commission, easier to get resource consent, and doesn't require significant ground works. It generates returns within a year (often less), and project IRR often around 15-25%. The pipeline of solar farms is consequently huge. But the solar generation curve favours summer time vs demand peak in winter. Our climate is also not a great fit with solar - long periods of overcast weather = minimal generation

The issue with wind and solar is what happens when the wind isn't blowing or the sun isn't shining. Chemical batteries are not the answer, they are short term storage only (a few hours storage). Chemical batteries rely on twice daily cycling to generate a return through arbitrage. The battery cost is fixed, returns are generated by cycling. If a battery isnt cycled frequently, the fixed costs destroy any profit, so the battery project won't proceed

Meanwhile, NZ electricity demand grows by 4%pa

So what generation backs up solar and wind when the conditions are unfavourable for generation - a week of minimal wind and/or a week of overcast days. The current generation mix is literally at its limits with ripple control of hot water heating being used during morning and evening demand peaks. And we are still being warned to reduce our electricity use to avoid blackouts

And gas supply in NZ is finite and declining, so Huntly rankines are now burning coal in preference. This will only get worse, and start to affect unit 5 at some point (not imminent but on the horizon)

Our current big batteries (hydro lakes) have finite storage and generation capacity. The HVDC has limited capacity. Generation is concentrated in SI, demand is in the upper NI. No new hydro will ever be built due to the consenting and long ROI

Have a think about all that

[Toddy]

Have a think about all that.

Think big.

To save NZ, do we need to head back into State partnerships to give a ROI for shareholders. The Govt return would be via tax take as industry grows and keeping a roof on mum and dad electricity prices.

Maybe the gas crisis will be the ignition that NZ needs to really plan for the industry's future.

The risk is that a left party gets back in, regulates prices, introduces unworkable regulation, resulting in zero investment again.

[mfd]

I'm not seeing your higher estimate on that wiki page - they state 372GWh last year which is close to the MBIE data I was looking at (367GWh), both around 1%. You could be right about this missing displaced electricity use but I don't see that discussed.

Looking at the trends, if you're not right now you will be in the next few years and I was disappointed at this government scrapping Onslow which could have supported a lot of renewable, intermittent (Along with a bunch of other system upgrades like HVDC)

We are leaving it up to the gentailers who obviously want to do the bare minimum to scrape through at the highest electricity price possible.

[kiora]

How much gas is there in Wairoa?
"The principal Westech field is at Frasertown approximately 11km from Wairoa. The field
approximately 2-3 km from Wairoa is smaller."
BUT there is a well heads south of the town,west at Fraser town & north of Wairoa.Isn't this bigger than they are letting on?

Here it says not commercially viable because "The use of gas for electricity generation requires an electricity load significantly greater than 10-13 MW to provide economies of scale to support well development, pipeline
construction and installation of generating plant. While Wairoa is close to the gas fields
the electricity demand is just too small unless development were to proceed for export of
electricity from the area."

Isn't this gas feild large ???

https://www.eastharbour.co.nz/assets...DCJune2003.pdf


"Gas
Two onshore wells were drilled during 2002, while offshore exploration was stalled
awaiting new investment.
Westech Energy completed its Tuhara-1B appraisal well near Wairoa in mid-2002 but
failed to establish a commercial flow of gas. Following the withdrawal of New Zealand
partner Orion Exploration during 2002, Westech is seeking partners for its three offshore
permits, two off Hawke’s Bay and one off the Wairarapa coast.
The principal Westech field is at Frasertown approximately 11km from Wairoa. The field
approximately 2-3 km from Wairoa is smaller.
13
14
The use of gas for electricity generation requires an electricity load significantly greater
than 10-13 MW to provide economies of scale to support well development, pipeline
construction and installation of generating plant. While Wairoa is close to the gas fields
the electricity demand is just too small unless development were to proceed for export of
electricity from the area. Westech have the option of piping the gas from the area to
probably Whirinaki for electricity generation, or installing a gas fired power station near
Wairoa and exporting the electricity via the Transpower transmission lines. With rising
gas prices the option of installing a well head generator to prove the field may become an
attractive proposition for staged field development. Such a decision will be driven by
national gas and electricity prices rather than by anything to do with local energy
requirements. If it were to proceed then Wairoa nodal electricity prices would certainly
reduce.

[xafalcon]

I'm not seeing your higher estimate on that wiki page - they state 372GWh last year which is close to the MBIE data I was looking at (367GWh), both around 1%. You could be right about this missing displaced electricity use but I don't see that discussed.

Looking at the trends, if you're not right now you will be in the next few years and I was disappointed at this government scrapping Onslow which could have supported a lot of renewable, intermittent (Along with a bunch of other system upgrades like HVDC)

We are leaving it up to the gentailers who obviously want to do the bare minimum to scrape through at the highest electricity price possible.

Generation capacity is measured in KW/MW/GW

420MW solar capacity / 10500MW total capacity = 4%

If you compare that to transpower (wholesale, WITS) there is 47MW solar capacity in NZ......

Lake Onslow was the key to the intermittent renewable generation problem by providing both short and long term storage at 0.1% the initial cost of batteries. But it's been kicked for touch, so isn't relevant any more

Keeping energy in short supply keeps prices high. Economics 101. Unlikely to change - turkeys don't vote for Christmas

[fish]

Would be great for Genesis to bring back that fourth Rankine unit

NZ needs it.

Looking at wits this morning it looks like we really need-wholesale power prices at over $700 mw/h atm at huntly
$360,000/hour net back for the 600mwh of 3 rankine units