New Zealand’s major power companies, including Meridian, Genesis, Mercury, and Contact, are planning to spend $30 billion by 2050 to develop new geothermal, wind, and solar power plants. This investment is equivalent to the total market capitalization of these companies combined. The CEOs of these power companies believe that this transition to renewable energy sources is a once-in-a-generation opportunity, similar to the country’s shift from coal to gas in the 1970s.
For this transition to be successful, there needs to be an increase in demand from industrial processors, manufacturers, and consumers. Contact Energy, for example, has already made a deal with New Zealand Steel to move away from coal. They also anticipate a rise in demand due to the electrification of electric cars.
The $30 billion investment is based on the assumption that electricity demand will increase to 65,000 gigawatt hours by 2050, compared to the current generation of 43,500 GWh per year. The power companies have already announced several renewable energy projects, which are expected to add 11,718 GWh of supply by 2030. These projects include wind, geothermal, and solar power, with wind power contributing the largest share at 46%.
It is worth noting that not all of the announced projects have been confirmed yet. Many of them are awaiting a final investment decision. Contact Energy alone plans to add approximately 5,000 GWh to the grid by 2030, with an estimated cost of $3-4 billion.
Despite the confidence of the CEOs, they acknowledge that there may be challenges and surprises along the way. However, they are determined to make this renewable energy transition a success.
Source: New Zealand Herald