UPTEC ES11 002 Examensarbete 30 hp April 2011
Evaluating the Potential of Seabased´s Wave Power Technology in New Zealand
Linnea Jonsson & Marcus Krell
Abstract Evaluating the potential of Seabased's wave power technology in New Zealand Linnea Jonsson & Marcus Krell
Teknisk- naturvetenskaplig fakultet UTH-enheten The aim of this thesis is to provide Seabased Industry AB with a decision basis for entering the New Zealand market. With the moderate wave climate around the Besöksadress: Swedish coast, the main market for Seabased’s technology is on the international Ångströmlaboratoriet Lägerhyddsvägen 1 market. Hus 4, Plan 0 The physical conditions in New Zealand are suitable for Seabased’s technology in terms of wave climate, bathymetry and seafloor types. There is an abundance of wave Postadress: energy all around the country’s coasts with a large variety of wave climates. Box 536 751 21 Uppsala Within about 15 km of the shoreline on the west coast, with a few exceptions, the mean annual power resource is at least 30 kW per metre wave front. The most Telefon: energetic locations can be found along the Southland coast, where the mean annual 018 – 471 30 03 resource per meter wave front is around 50 kW.
Telefax: The electrical distribution system has a layout with a high capacity national grid, which 018 – 471 30 00 runs along the middle of the country, and outlying weaker grids reaching the coasts. This might prove disadvantageous at times since the grid might have to be Hemsida: strengthened in order to receive large amounts of power at the fringe. http://www.teknat.uu.se/student The weaker grids at the coast may however also prove to be an advantage, since this opens up for a secondary market. At points where the demand at times surpass the lines capacity many line companies are looking into the possibility of strengthening the grid locally by installing diesel generators. As these locations mostly are around the coasts this may prove a good secondary market for Seabased. The wholesale electricity price is today around 400 SEK (80 NZD)/MWh and is forecasted to stay there for the next few years and then increase to 500 SEK (100 NZD)/MWh by around 2018. This is mostly due to an end of available geothermal resources. There are no subsidies to any power generation in New Zealand. To build a wave power park one needs resource consent. It may prove easier to first receive this for a smaller instalment, and the knowledge gained in this process will then help in receiving consent for a full scale park. A national goal exists of increasing the amount of renewable electrical generation from 73% today to 90% by 2025. Work is ongoing to make it easier to receive resource consent for marine energy instalments. The conclusion is that the market is expected to be ready for full approach by Seabased Industry AB within five years, and would then be a very suitable market. It is however considered to exist opportunities to approach the market already today for smaller instalments to build a local knowledge base which may prove useful when a full approach is made.
Handledare: Mikael Eriksson Ämnesgranskare: Rafael Waters Examinator: Kjell Pernestål ISSN: 1650-8300, UPTEC ES11 002
Sammanfattning Målet med detta examensarbete har varit att förse Seabased Industry AB med ett beslutsunderlag för huruvida man ska träda in på den Nya Zeeländska marknaden. Med ett mycket måttligt vågklimat runt Sveriges kust finns Seabased’s huvudmarknad internationellt. De fysiska förutsättningarna i Nya Zeeland är mycket väl lämpade för Seabased’s teknik i form av vågklimat, batymetri och typ av sjöbotten. Det finns ett överflöd av vågenergi runt hela landets kust med en stor variation av vågklimat.
Inom 15 km från kustlinjen på västkusten, med ett fåtal undantag, är vågkraftspotentialen minst 30 kW per meter vågfront. De mest energiintensiva platserna finns kring Southlands kust, där det årliga medelvärdet per meter vågfront är runt 50 kW. Detta kan jämföras med 2- 10 kW/m i Sverige.
Det elektriska distributionsnätet har en layout med ett nationellt stamnät som sträcker sig genom mitten av landet och ett svagare nät som når ut mot kusterna. Detta kan innebära en nackdel tidvis då nätet ofta behöver stärkas för att kunna ta emot stora effekter ute vid kusten. Det kan dock lika gärna visa sig vara en fördel, då detta öppnar upp för en sekundär marknad. I delar av nätet där man tidvis har ett större kraftbehov än nätet klarar av överväger många nätbolag att stärka nätet lokalt med hjälp av dieselgeneratorer. Då dessa platser oftast ligger vid kusten kan detta visa sig vara en god sekundär marknad för Seabased.
Det elpris genereringsbolagen får ligger idag runt 400 SEK (80 NZD)/MWh och förutspås ligga kvar på ungefär samma nivå de närmaste åren, för att sedan stiga till 500 SEK (100 NZD)/MWh omkring år 2018. Detta beror mestadels på att man då förväntar sig ha slut på tillgängliga geotermiska resurser. Det finns i dagsläget inga subventioner till någon form av elgenerering i Nya Zeeland.
För att bygga en vågkraftspark behöver man tillstånd. Det visar sig ofta vara enklare att få tillstånd för en mindre installation, och erfarenheterna från denna kan sedan hjälpa till vid ansökan av en fullskalig vågkraftspark. Det existerar ett nationellt mål att öka andelen förnyelsebar el från dagens 73% till 90% år 2025. Arbete pågår med att förenkla tillståndsprocessen för installeringar av marin elgenerering.
Slutsatsen är att den Nya Zeeländska marknaden kommer vara redo för ett inträde i full skala inom fem år, och att det kommer vara en mycket lämplig marknad. Det anses dock att möjligheter finns att närma sig marknaden redan idag för en mindre installation för att bygga upp en lokal kunskapsbas som kan vara till stor nytta när man ger sig in på marknaden fullt ut.
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Table of Contents Sammanfattning ...... i Glossary ...... iv Map of New Zealand ...... v 1. Introduction ...... 1 2. Background ...... 1 2.1 Authors ...... 1 2.2 Seabased ...... 1 2.3 The project ...... 2 3. Aim & Scope of thesis ...... 2 3.1 Method and content ...... 2 3.2 Limitations ...... 3 4. Theory (L. Jonsson) ...... 3 4.1 Real ocean waves ...... 3 4.1.1 Description of waves ...... 4 4.1.2 Waves and power transport ...... 5 4.2 Power absorption ...... 6 4.2.1 Power absorption for a park ...... 7 4.3 Utility factor ...... 8 5. Physical aspects (M. Krell) ...... 9 5.1 Climate ...... 10 5.2 Wave climate & tides ...... 10 5.3 Bathymetry & seafloor types ...... 12 5.4 National electrical system ...... 15 5.5 Local grids and owners ...... 15 5.6 Typhoons and earthquakes ...... 16 6. Political and social aspects ...... 17 6.1 New Zealand electricity market ...... 17 6.1.1 Background (history/ownership/structure) (M. Krell) ...... 17 6.1.2 Participants & spot market (M. Krell) ...... 18 6.1.3 Politics & policies for wave power (L. Jonsson)...... 19 6.2 Legislations and restrictions ...... 19 6.2.1 Legislative documents affecting marine energy projects (L. Jonsson) ...... 19 6.2.2 Application process for resource consent (L. Jonsson) ...... 20 6.2.3 Affected parties in a resource application (M. Krell) ...... 21 6.2.4 Assessment of Environmental Effects (L. Jonsson) ...... 22 6.2.5 Indigenous population (M. Krell) ...... 23 6.2.6 Time and Costs involved in Obtaining Consents (L. Jonsson) ...... 24 6.3 Application process for grid connection (M. Krell) ...... 24 7. Economical aspects (M. Krell) ...... 26 7.1 Electricity prices ...... 26 7.2 Indicative unit cost for different generation options ...... 27 7.3 Energy Outlook ...... 27 8. Competing interests ...... 30 8.1 Marine life restrictions (M. Krell) ...... 30 8.2 Fishing (M. Krell) ...... 31 8.3 Navigational and military restrictions (M. Krell) ...... 32
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8.4 Domestic marine energy projects (L. Jonsson) ...... 33 9. Analysis ...... 37 9.1 Site selection ...... 37 9.1.1 Southland ...... 38 9.1.2 Waikato ...... 38 9.2 Energy production examples for a 10MW facility in NZ (L. Jonsson) ...... 39 9.2.1 Assumptions for a 10MW wave park ...... 39 9.2.2 Site specific results ...... 40 9.3 Contacted parties ...... 44 9.3.1 Public authorities ...... 44 9.3.2 Companies ...... 45 9.3.3 Other contacts ...... 46 10. Conclusions ...... 47 10.1 Physical conditions ...... 47 10.2 Electrical distribution system ...... 47 10.3 Energy market outlook ...... 47 10.4 Resource consents ...... 48 10.5 Suitable location for deployment ...... 48 10.6 Alternative markets ...... 49 10.7 Final recommendation ...... 49 11. Discussion ...... 49 12. References ...... 51
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Glossary AEE Assessment of Environmental Effects AWATEA Aotearoa Wave and Tidal Energy Association Bathymetry The study of underwater depth of lake or ocean floors. Benthos the organisms that live on, in or near the seabed CMA Costal Marine Area, the foreshore, seabed and the coastal waters, and the air space above the water Crown entity an organisation that forms part of New Zealand's state sector, where the governance of the organisation is split from the management of the organisation Distributed generation equipment used, or proposed to be used, for generating electricity that is connected, or proposed to be connected, to a local distribution network, or to a consumer installation that is connected to a local distribution network; and is capable of injecting electricity into that local distribution network, but is not directly connected to the national grid ECNZ Electricity Corporation of New Zealand, former governmentally owned company EECA Energy Efficiency and Conservation Authority ESA Electricity Supply Authorities Iwi the largest everyday social units in Māori populations, in most contexts equivalent to a tribe LVMS Low Voltage Marine Substation, connection point for individual WECs. Māori the indigenous population of New Zealand MEDF Marine Energy Deployment Fund NZCPS New Zealand Costal Policy Statement Power capture ratio Percentage of incoming energy that can be absorbed by a WEC Power flux amount of power transported per meter wave front, usually kW/m RCP Regional Coastal Plan RMA Resource Management Act, 1991 RPS Regional Policy Statement Significant wave height The average of the highest ⅓ of the waves in a measured burst. Often denoted Hs Tāngata whenua a Māori term for the indigenous population of New Zealand WEC Wave Energy Converter
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Map of New Zealand Locations mentioned in this thesis
Kaipara Harbour Auckland East Cape
NORTH ISLAND
Cook Strait Cook
Picton Wellington
Nelson Wairarapa
Southern Alps Christchurch
Central SOUTH ISLAND Fiordlands Otago Dunedin Invercargill Foveaux Strait Bluff
Stewart Island
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1. Introduction Many countries are today looking towards redirecting their energy systems towards renewable resources. This is both for reasons of independence of imported fossil fuels and to reach a more sustainable energy system. In some cases the driving forces are even purely economical.
The amount of renewable energy resources available on Earth is vast. Even if unavailable and unfavorable areas are subtracted there is still more than 40 TW of wind power and about 580 TW of solar power available for us to use. Only a tiny portion of this resource is being used today, but that portion is growing by the day. As a point of reference the mean electrical power need in the world for 2010 is projected at about 2.35 TW.1
Even though the first patent of a wave energy conversion device is from 1799, there is virtually no energy utilized from ocean waves at present. Despite the energy resource from ocean waves is estimated to be in the range of 1-10 TW.
Different wave energy conversion devices have been tried in a more scientific way since the 1970’s, but no technology has yet successfully managed construction, durability, economy and ecology in order to take wave power into a commercial stage.
Even though solar power and wind power are growing exponentially on the world energy markets wave power is still not present. This is very much because of the large engineering challenge of harnessing the massive power of ocean waves. Until the viability of a device that turns ocean waves into useful electric energy has been verified, wave power will remain absent from the worlds energy systems. 2. Background
2.1 Authors This report has been written by Linnea Jonsson and Marcus Krell, both M.Sc. students at Uppsala University in Energy Systems Engineering.
Mikael Eriksson, manager of wave power resources at Seabased Industry AB, has supervised the project.
2.2 Seabased Seabased Industry AB (hereinafter Seabased) is a wholly owned subsidiary of Seabased AB. The company was founded in 2001 and was originally an innovation and patent holding company closely associated with the research being done at the Swedish Centre for Renewable Electric Energy Conversion at the Ångström Laboratory, Uppsala University. The research is directed by Professor Mats Leijon who together with Associate Professor Hans Bernhoff are the founders and majority owners of the company.
The company’s business idea is to develop and sell wave energy converting (WEC) systems, se figure 2.1 below. Seabased has developed a unique technological concept based on point absorbers (i.e. buoys) on the ocean surface that follows the vertical motion of the waves. This motion is transferred via a wire to direct a linear generator placed on the sea floor. The
1 Rahm, Magnus (2010). Ocean Wave Energy. 1 irregular voltage induced by each WEC is rectified. The system is modular, and after rectification the WECs are connected and the voltage is transformed into suitable amplitude and frequency before being connected to the grid.
Figure 2.1 WEC and park concept
2.3 The project With the moderate wave climate around the Swedish coast, the main market for Seabased’s technology is on the international market. It is therefore strategically important to identify markets where the comparative advantages of wave power can be exposed. Both physical aspects such as wave climate and bathymetry must be suitable, but also political and financial climate as well as public opinion is important factors when choosing initial markets.
Seabased has previously investigated their potential on the Asian market. This project, where the focus is on the New Zealand market, was suggested by the authors based on their knowledge of the country; isolated grid, much hydropower, shortage of electrical energy and strong public opinion and political incentives for renewable energy. 3. Aim & Scope of thesis The purpose of the project is to investigate the conditions for a possible establishment of a wave power park of linear generators in New Zealand. This may then serve as a decision basis for Seabased regarding an entry to the New Zealand energy market.
3.1 Method and content In order to evaluate if New Zealand is a suitable market, there has been several factors taken into consideration, on a national as well as local level; political, legal, economic, environmental, and social.
In addition, the study also looks at the prevailing competitive forces on New Zealand’s renewable energy market and domestic marine energy market. Finally, the analysis will bring up possible locations, mode of entry as well as the energy outlook of New Zealand.
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The basic method chosen for this project has been to identify what we needed to know in order to place a wave power farm in a specific area. To do so we have set up some basic assumption regarding the dimensions of a park and each specific generating unit. These basic assumptions have limited the scope of facts needed, i.e. all cases for every park size are not presented.
By choosing the method described above, the content of this thesis will include both a general description of the national state of the mentioned factors, production calculations for six sites and a more thorough description of two specific sites.
As a complement to facts found in scientific reports and official reports from companies and official authorities a study visit to New Zealand has been completed. During the trip meetings have been held with utilities, renewable generating companies, research companies, lobby groups and government agencies to get a more detailed picture of the possibilities for introducing Seabased’s technology in New Zealand.
3.2 Limitations
This project has the following limitations;
Assumed plant has a power of 10 MW. - A similar size plant is planned for Swedish conditions, and thus choosing this size for our study makes comparing Swedish and NZ conditions easier. Calculations have only been done for a square park design. - All calculations are only comparing different sites and are very simplified. For this reason we have chosen the simplest park layout for the calculations. Regulations regarding connection to regional grids and not the national grid. - A park of 10 MW would most likely be connected to a regional grid. Only brief investigation of deployment equipment. - Limitation due to time frame of the project.
4. Theory (L. Jonsson)
In order to understand the fundamentals of wave power, some knowledge about basic terms and concepts is needed. This section will not deal with all aspects of wave power theory, but will include the relevant information for this thesis. A great part of the theory is taken from the thesis Ocean Wave Energy2.
4.1 Real ocean waves There are a number of different types of waves in the ocean; this chapter will however only include those mainly generated by winds. Other types of waves are tsunamis and tidal waves. Wind blowing over a free water surface creates a shear stress between the water surface and the wind. This results in energy being transferred from the wind to the wave. Wind waves form what is called a sea and when the sea is fully developed, the waves have absorbed as much energy as they can from wind of that velocity. The length of water over which a given wind has blown is called fetch. A schematic over the formation of waves are illustrated in figure 4.1.
2 Rahm, M. (2010) Ocean Wave Energy. Uppsala University 3
Normal wind waves are highly irregular meaning that they, at best, can be approximated by a linear combination, a Fourier series, of harmonic components. Swell is a formation of long- wavelength surface waves and are far more stable than normal wind waves, since they often have travelled outside the region in which they were created. Real ocean waves can be swells, normal wind waves or a mixture of both.
Figure 4.1 A schematic of waves developed and propagation stages (Baddour, 2004)
4.1.1 Description of waves The characteristic for the motion of water particles depends on the depth of the water, as illustrated in figure 4.2 below. The water particles (the blue dot in figure 4.2) move in a circular orbit while in deep water (case A in figure 4.2). The radius of the orbit decreases with the depth of the water.
As a harmonic wave progresses towards the shoreline, the wave transforms. The orbit of the water particle becomes more elliptic (case B in figure 4.2 is in shallow water), the wave gets steeper and will eventually break. These waves are very irregular and hard to describe mathematically.
For linear waves, i.e. real ocean waves which can be described by a linear combination of harmonic waves of different frequencies, the deep-water approximation simplifies theoretical analyses. The deep-water approximation can be used when the depth (h in figure 4.2) is greater than half the wave length λ, i.e. h >> ½ λ.
The principal terminology used when discussing waves are; Crest: The high point of a wave Trough: The low point of a wave Wave height: Vertical distance from through to crest. Wavelength λ: Horizontal distance from one crest to the next. Time period T: The time in seconds for a wave crest to travel a distance equal to one wave length. Wave frequency f: The inverse of the wave period. Wave depth h: The distance from mean sea level to sea floor
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Note that there is a direct relationship between wave period and wavelength but wave height is independent of either3.
Figure 4.2 Wave characteristics, where A is in deep water and B is in shallow water
4.1.2 Waves and power transport Since not two waves are alike, the local behaviour of waves is collected through long-term series of wave data. The wave data is collected through two methodologies, where the first is based on measurement and observations and the second on modelling. The time series, containing information about measured period of time and the surface elevation, can be reduced to spectrums and some characteristics parameters, such as the significant wave height Hs, given in meters, and the energy period Te, given in seconds.
The spectral density function, or simply the spectrum, of a sea state is denoted , given in m2/Hz. From the spectrum, so-called spectral moments, which give statistical information about the waves, are defined as
Eq. 4.1 where is the frequency. The significant wave height is given by
Eq. 4.2 where is the zeroth spectral moment. describes the average height of the highest of the waves.
3 Baddour, E. (2004) Unpublished. Energy from waves and tidal currents, Institute for Ocean Technology National Research Council. 5
The energy period Te is defined as
Eq. 4.3
The wave power flux J [kW/m], for one meter wave front is found through
Eq. 4.4
where for polychromatic ocean waves in deep water.
When calculating for J, the amount of data is reduced by sorting Te and Hs in a scatter diagram – an example is shown in figure 4.3. The value in each bin represents the probability of occurrence of that combination of Te and Hs.
Figure 4.3 An example of a scatter diagram (Bernhoff, 2009)
4.2 Power absorption By assuming that the energy absorption is constant for all wave heights and periods, the power absorption Pabs of one WEC can be written as,
Eq. 4.5 where is the power capture ratio (absorption), d is the diameter of the buoy and J is the incident power transport.
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To give an estimate of energy production during a time period, the power absorption is weighted with a scatter diagram according to
Eq. 4.6 where Ti,j is the amount of time for a certain sea state and Pabs i,j is the power absorbed for that same sea state. Ti,j is calculated by using the probability of occurrence, which can be retrieved from a scatter diagram in the bin at position i,j.
4.2.1 Power absorption for a park The design of a wave park is in this thesis simplified to a number of rows where the WECs are placed at the equal distance b meters apart, as seen in figure 4.4 below. The rows are placed p meters apart, where the distance p is 10 times the diameter of the buoy4. The direction of the incoming wave front with wave energy flux J0 is simplified to only the case where it is perpendicular to the first row of WECs.
Figure 4.4 A wave power park with six buoys, placed b meters apart in a row and p meters apart between rows. The incoming wave front‘s direction is in line with the arrows.
For this case, the incoming wave energy flux is
Eq. 4.7 where definitions are as before. After the first row, the incoming wave energy flux , that will hit the second row is
Eq. 4.8
4 Bernhoff, H. (2009) Exercises for Wave Power Course. Uppsala University
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The incoming wave energy flux to the third row would be
Eq. 4.9
After n rows, the wave energy flux would be
Eq. 4.10
The power capture ratio for a park is calculated through
Eq. 4.11 where n is the total number of rows in the park.
4.3 Utility factor The utility factor is the ratio of average generated power to the installed power of the power plant. No power plant will produce energy at the rated power for all hours of the year. For intermittent power sources, the utility factor is strongly dependent on the available power source, e.g. wind or waves. Examples of utility factors for different types of generation are shown in figure 4.5.
The utility factor is defined by
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Figure 4.5 Examples of utility factor for different types of energy sources. The red sections are the range possible utility factor depending on location and technology.5
5. Physical aspects (M. Krell) New Zealand consists of two main islands, the North and South Islands, which are separated by the Cook Strait. The country has over 15, 000 km of coastline and has the fourth largest Exclusive Economic Zone in the world.
The South Island is divided along most of its length by the Southern Alps with several peaks higher then 3000m and has a region of fiords in the south-western corner, called Fiordland.
The North Island is less mountainous but more volcanic. The central part has high volcanic activity and is rather mountainous, while the land around the edges is a flatter area.
Sweden and New Zealand have many geographic and demographic similarities. The countries have almost identical lengths and population densities, although New Zealand has approximately half the surface of Sweden. Consequently the population is about half of Sweden’s, a bit over 4 million.
It is quite helpful to think of New Zealand as “Sweden up-side-down”. The North Island is mostly arable land and is densely populated (76% of population) and with over one quarter of the population living in Auckland (pop. 1.3 million). The North Island stands for 79% of New Zealand’s total GDB.
5 Wave Power Project – Lysekil. (2010-09-15). Website. 9
The South Island is home to one quarter of the population, and about half of them live in three larger cities (Christchurch, Dunedin and Invercargill). The South Island is quite similar to Norrland, with a lower population density than the North Island, remote areas and a large mountain range in the west. Here the economy is strongly based on tourism and primary industries.
5.1 Climate The climate of New Zealand is mostly cool temperate to warm temperate with a strong maritime influence. Temperatures generally vary from about 23 ºC in summer to 12 ºC in winter, with a generally warmer climate in the north and cooler in the south.
Rainfall varies from 300 mm per year in Central Otago to up to 8000 mm per year in places west of the Southern Alps. Most New Zealand cities receive between 650 mm and 1500 mm per year. Generally the west coast is wetter and the east coast dryer.
5.2 Wave climate & tides New Zealand has two wave climate systems of different origin. The south and west coasts are swell-dominated (wavelengths around 150m) while the east and north coasts are sea- dominated (wavelengths 50-100m). This is due to swells originating from, mostly uninterrupted, circumpolar weather systems in the Southern Ocean hitting New Zealand from the south west. The eastern and northern coasts are thus sheltered from this swell, and the waves here originate from more local weather systems.
The total available wave power resource in New Zealand is estimated to 180 GW6 by integrating the flux magnitude passing the 50 m depth contour around the country. This would correspond to approximately 1500 TWh per year.
Within about 15 km of the shoreline on the west coast, with a few exceptions, the mean annual power resource is at least 30 kW per metre wave front. The most energetic locations can be found along the Southland coast (the south coast of the South Island), where the mean annual resource per meter wave front is around 50 kW. The south eastern part of the South Island experiences about the same energy resources, and the next most energetic location can be found between Wairarapa and East Cape on the North Island, with mean wave energy of about 10 kW/m wave front7.
A map of mean spectral wave power (1997- 2007) around New Zealand can be seen in figure 5.1 below.
6 de Vos, R. et al. (2009) EnergyScape Basis Review Section 2 Renewable Resources. NIWA 7 Power Projects Ltd, (2008) Development of Marine Energy in New Zealand. 10
Figure 5.1 Mean spectral wave power around New Zealand8
For dimensioning purposes extreme wave conditions are of interest. Table 5.1 below show values for the significant wave height and single wave maximum wave height expected in a 50 and 100 year storm9 at six locations around New Zealand. The locations of the measuring sites can be seen in figure 5.2 below. No definitive information was found regarding corresponding values for the wave period during these conditions, but estimation is that the period would not exceed 16 seconds10.
Table 5.1 Extreme wave heights around New Zealand
Site Lon Lat Mean Hmax(50) Mean Hmax(100) (WGS84) (WGS84) Hs(50) Hs(100) NI NE 176,625 –33.750 12,84 30,1 13,86 32,5 NI NW 168.750 –34.875 12,25 28,7 13,04 30,5 NI SE 178.875 –41.625 13,07 30,6 13,95 32,7 SI W 167.625 –42.750 14,48 33,9 15,46 36,2 SI SE 173.250 –47.250 16,5 38,7 17,71 41,5 SI SW 164.250 –49.500 18,11 42,4 19,3 45,2
8 Power Projects Ltd, (2008) Development of Marine Energy in New Zealand. 9 Stephens, S A. & Gorman, R M. (2006). Extreme wave predictions around New Zealand from hindcast data. New Zealand Journal of Marine and Freshwater Research. Vol. 40: 399-411. 10 Komar, P D. (2005) Environmental Change, Shoreline Erosion & Management Issues. 11
Figure 5.2 Measuring sites of extreme wave conditions8
The tidal range in New Zealand varies from about half a metre (in Picton at neap tides) to almost 4 metres (in Nelson at spring tides)11.
Tidal information for a few locations can be seen in appendix I.
5.3 Bathymetry & seafloor types The New Zealand bathymetry varies around its coastline. The landmass is relatively young and still has volcanic activity, earthquakes and geothermal areas. All this is due to the fact that the country is positioned on the boundary of the Australian and Pacific tectonic plates, see figure 5.9. The boundary runs generally in the SW-NE direction, along the Southern Alps and of the east coast of the North Island.
A general view of the sea depths can be seen in figure 5.3 below. The red markings indicate depths of less than 50 metres. To get a more detailed picture of sea depths around the coastline an online tool made available by the National Institute of Water and Atmospheric Research (NIWA) is available for free. It offers overlays of depth curves of 10, 20, 30, 40, 50 and 100 metres, foreshore sediment types, coastal landform types etcetera. A snapshot of the tool can be seen in figure 5.4 below, and the tool can be found at; http://wrenz.niwa.co.nz/webmodel/coastal (2010-09-17)
11 Land Information New Zealand. Tidal levels. (2010-09-23). Website. 12
Figure 5.3 & 5.4 Depth <50m around New Zealand & more detailed depth curves
The sea floor around New Zealand is covered mainly in sediments from land, with the exception of the northern and southern extremities. Here there are no major rivers, and thus no way for material to be washed to sea. Instead shelly sediment from once-living sea creatures dominates the sea floor12.
In Cook and Foveaux straits powerful tidal streams and waves wash away much of the mud, leaving gravel, coarse sand and shells. The sea floor along the east coast of the North Island is on the other hand covered with mud, since currents are relatively weak and the supply of sediment from land is the largest in the country. Off the west coast of the North Island black, iron-rich sand has been formed by wave action on volcanic rock.
12 The Encyclopedia of New Zealand, Sea Floor Geology. (2010-09-22). Website. 13
The southern half of the west coast of the South Island is mostly mud, but the northern half is generally gravel and sand. The east coast of the South Island is predominantly gravel and sand, with the occasional patch of mud. A general overview of the sea floor sedimentation types can be seen in figure 5.5 and in higher detail in appendix II.
Figure 5.5 Sea floor sediment compositions13
13 NIWA, bathymetry. (2010-09-22). Website. 14
5.4 National electrical system New Zealand has an electrical system with a frequency of 50Hz and general domestic voltage of 230/240V14.
The total use of electrical energy in 2009 was 38 TWh. The electrical power comes mainly from hydropower (57%), gas (20%) and geothermal (11%). Wind covers 3.5% of the generation. Approximately 73% of the electricity generation in 2009 was from renewable sources (incl. geothermal). This is graphically represented in figure 5.6.
New Zealand has about 5 GW of installed hydropower, 712 MW of installed geothermal power and around 371 MW of installed wind power15.
Figure 5.6 Electricity generation by fuel type 200914
5.5 Local grids and owners In 1998 the Electricity Reform Act came into power, requiring retail, generation and distribution companies to be separate, preventing line companies from being generators or retailers. These rules have however been reformed so that distribution companies now can own generation, within certain restrictions16.
The distribution of electricity is divided in two levels. The state owned enterprise Transpower owns and operates the national high voltage grid, see figure 5.7 below, and local distribution companies which owns and operates lower voltage grids, see figure 5.8 below.
There are currently 28 local distribution companies in New Zealand. Most are regionally based, and ownership varies from publicly listed companies to community owned trusts.
14 Four Corners. New Zealand Infrastructure (2010-09-16). Website. 15 Ministry of Economic Development (2010). New Zealand Energy Data File 2010. 16 New Zealand Parliament (2008), Electricity Industry Reform Amendment Bill. 15
Figure 5.7 & 5.8 Map of Transpower's grid & map of distribution network areas
5.6 Typhoons and earthquakes New Zealand is hit by a tropical cyclone once every eight to nine years17.
The national institute of Geological and Nuclear Sciences (GNS) records about 15 000 earthquakes in New Zealand every year, however most of them are never felt by people. Generally a severe earthquake hits the country every decade, and in the period between 1992 and 2007 New Zealand experienced over 30 earthquakes with a magnitude of 6 or more.
A rather large earthquake hit the city of Christchurch in September 2010, the country’s largest earthquake in nearly 80 years hit Dusky Sound in the Fiordlands in 2009, and an offshore quake close to Gisborne in 2007 caused buildings to collapse.
A general distribution of earthquake magnitude and location can be seen in table 5.2 and figures 5.9 and 5.10 below.
Table 5.2 Frequency of Occurrence of Earthquakes (since 1960) Magnitude Annual Average "Rule of Thumb" 4.0-4.9 333 1 per day 5.0-5.9 26 2 per month 6.0-6.9 2 2 per year 7.0-7.9 - 1 per 3 years 8.0 or over - 1 per century
17 Wikipedia. Climate of New Zealand (2010-09-17). Website. 16
Figure 5.9 Distribution of earthquakes and the Figure 5.10 Ten years of shallow earthquakes in boundary of the Pacific and Australian tectonic New Zealand18 plates 19
6. Political and social aspects
6.1 New Zealand electricity market
6.1.1 Background (history/ownership/structure) (M. Krell) Prior to 1987, electricity generation and transmission was a responsibility of a Government Department, the Ministry of Energy. Local distribution and supply was the responsibility of electricity supply authorities (ESA), which were electorally oriented statutory monopolies20.
In 1987 the Electricity Corporation of New Zealand Ltd (ECNZ) was set up as a state owned company (or state owned enterprise, SOE). The purpose of ECNZ was to own and operate the generation and transmission assets of the Ministry of Energy, while policy and regulatory activities largely were kept within the ministry.
In 1988 ECNZ set up Transpower as a subsidiary to run the transmission network, turning ECNZ into a strictly generating company. The Ministry of Energy was abolished, and its roles were transferred to what today is the Ministry of Economic Development.
All ESAs are corporatized, either owned by local trusts or kept in local authority ownership. Transpower was split from ECNZ and the Electricity Market Company was set up to support the electricity market framework for wholesale trading.
18 GeoNet. Earthquake (2010-09-17). Website. 19 GeoNet. About GeoNet (2010-09-17). Website. 20 Energy and communications branch of Ministry of Economic Development (2009). Chronology of New Zealand electricity reform. 17
ECNZ was split at two different times into Contact Energy, Genesis Power, Meridian Energy and Mighty River Power. Ownership was separated for line and energy businesses, and Contact Energy was privatized.
The Electricity Commission was established to take over governance of the electricity industry. It would secure reserve generation and regulates the operation of the electricity industry and markets.
In the winters of 2001, 2003 and 2008 dry periods and high energy demand led to energy shortages. Public awareness campaigns were implemented to save energy by about 10%, which was achieved and supply was ensured without interruption.
6.1.2 Participants & spot market (M. Krell) As mentioned in section 5.5 above, the electricity sector in New Zealand consists of four main components; generation, transmission, distribution and retail21.
On the wholesale market (also called spot market) a generator can compete to sell its electricity to electricity retailers and other purchasers, e.g. large industrial users. The trade is done through the electricity market operator The Marketplace Company Ltd (M-co), which is owned by NZX (New Zealand Exchange).
Some of New Zealand’s largest generating companies are;
Contact Energy Ltd (privately owned) Genesis Power Ltd (government owned) Meridian Energy Ltd (government owned) Mighty River Power Ltd (government owned) Todd Energy Ltd (privately owned) TrustPower Ltd (privately owned)
On the retail market electricity retail companies compete to sell the electricity they have purchased on the wholesale market to end consumers. Retailers may also buy electricity directly from embedded generators, i.e. smaller generators connected directly to distribution networks (may be applicable for wave power).
Some of New Zealand’s electricity retailers are;
Contact Energy Ltd Empower Ltd Energy Online Genesis Power Ltd Meridian Energy Ltd Mercury Energy Ltd Bay of Plenty Electricity King Country Energy Trust Power Ltd
21 Electricity Commission. Industry. (2010-09-24). Website. 18
6.1.3 Politics & policies for wave power (L. Jonsson) The New Zealand Energy Strategy in its latest form was the draft released in June 2010, and will, after receiving feedback, replace the 2007 New Zealand Energy Strategy. This document proposes the Government’s strategic direction for the supply and use of energy and thereby covers a wide range of policies, actions and definitions.
The strategy states that in 2009, 73 % of the NZ electricity was from renewable sources i.e. hydro, geothermal and wind resources. The renewable target for electricity generation is to increase this share to 90 % by 2025 providing that this does not affect security of supply. If one assumes that the need for electrical energy increases at the same rate of 2% annually22, this would be equivalent to an increase of renewable electricity production of almost 22 TWh.
Relevant government actions for wave power are:
Continuing to work with industry associations and councils to remove unnecessary barriers to the uptake of medium and smaller scale renewable technologies. Continuing the Marine Energy Deployment Fund to 2011 and encouraging the emerging industry as appropriate.
The Marine Energy Deployment Fund Projects The Marine Energy Deployment Fund, MEDF, is managed by the EECA and aims to bring forward the development of marine energy in New Zealand, by supporting the deployment of generating devices23. The fund was established in October 2007, with NZ$8 million set aside for the fund and its administration. So far, three out of four rounds have ended, resulting in funding to three deployment projects further described in chapter 8.4.
6.2 Legislations and restrictions
6.2.1 Legislative documents affecting marine energy projects (L. Jonsson) The main piece of legislative document affecting marine energy projects is the Resource Management Act 1991, RMA, which among other things states that for activities affecting the environment a resource consent application must be issued to the right consent authority or authorities.
Following the RMA in the legislative document hierarchy is the New Zealand Coastal Policy Statement, NZCPS. The NZCPS is only relevant for activities which have significant or irreversible adverse effects on the Coastal Marine Area, CMA. The new NZCPS that came into effect on the 4th of December 2010 specifically states that the Department of Conservation (DoC), as an affected party in an resource consent application (see section 6.2.2 below), should “recognise the potential contributions to the social, economic and cultural wellbeing of people and communities from use and development of the coastal marine area, including the potential for renewable marine energy to contribute to meeting the energy needs of future generations”24.
22 Ministry of Economic Development (2010). New Zealand Energy Data File. 23 Energy Efficiency and Conservation Authority. Marine Energy Deployment Fund. (2010-09-24) 24 Department of Conservation (2010). New Zealand Costal Policy Statement. 19
6.2.2 Application process for resource consent (L. Jonsson) The resource consent comes in three different versions; notified, non-notified and limited notified25, depending on for example the type and scale of the activity consent is applied for. The difference between them is the requirements of the applicant and the level of involvement of the affected parties. For a non-notified and the limited notified, you’ll have to address submissions from the consent authority as well as from certain affected parties determined by the consent authority. These groups could be the local DoC office or local fishermen, and you’ll need a signed letter from all these groups for the application. For a notified consent, public submissions and hearings are required and anybody can raise a question about the effects the project will have. This then has to be proven by the project owner not to be an issue.
In general, a small-scale renewable energy project in New Zealand should start by determining whether resource consent is required or not. This is done by presenting the actual and potential environmental effects to the consent authority or authorities and through this start a discussion. The project developer is responsible for approaching the right authority or authorities and for meeting the consent authority’s information requirements. The authorities will after being approached determine if resource consent is required or not, and if so whether it will be notified, non-notified or limited notified.
More specifically when it comes to marine energy projects26 any marine energy device or project must secure consents from regional and local councils under the RMA 1991, prior to undertaking any physical works. For specific requirements regarding regional and district plans, one would have to contact the authorities separately in order to establish information requirements and policies. In general though, regional and local authorities may have different requirements on project developers, depending upon their operative plans. When receiving the resource consent, physical work has to start within five years.
Table 6.1 below presents an overview of the policies, statements and plans relevant for renewable energy projects in the range of 10kW- 20MW.
Table 6.1 Overview of policies, statements and plans relevant for renewable energy projects Consent Authority Policy Statements and plans Consents Minister of Conservation New Zealand Coastal Policy Restricted coastal activities Statement (NZCPS) Regional councils Regional Policy Statement (RPS) Coastal permits Regional Coastal Plan (RCP) Land-use consents Regional Plans Water permits Discharge permits District and city councils District plans Land-use consents Subdivision consents
25 Huckerby, John, AWATEA/Power Projects, 2010-11-15 26 Power Projects Ltd, (2008) Development of Marine Energy in New Zealand. 20
Application forms can be obtained from the consent authority and typically requires the following information: A description of the proposal and its location An assessment of environmental effects (AEE) Any information required by a plan or regulations A statement specifying all other resource consents you may require from any consent authority Identification of the persons affected by the proposal and any consultation undertaken A list of the names and addresses of those who have given their written approval (completed written approval forms should be attached to the application) Plans of the proposal, e.g. a site plan, elevations and cross-sections
6.2.3 Affected parties in a resource application (M. Krell)
The Department of Conservation, DoC, is generally the first affected party on the list. Their mission is to conserve New Zealand’s natural and historic heritage for all to enjoy now and in the future. In the context of an affected party in a resource consent application they will raise questions relating to the use of land and other natural resources as well as the effect on benthos, marine wild life and tourism. They also work with Māori in most aspects of their conservation efforts.
Their primary concern27 for a marine energy project will be the marine mammals; whales, sea lions and dolphins, and the risk of these entangling themselves in the lines and colliding with the buoys. A question raised is that if they avoid the park, will this lead to a change in the migration routes altogether. There is however observation data available as well as ongoing research about migratory routs.
Another concern is the effect of electric and magnetic fields on sharks and rays, since they navigate using electroreception. When meeting the queries from DoC statistical analyses for different factors will be asked for. For example, Crest Energy has been asked to place a smaller number of generators in order to gather data before deploying their full-scale park. Research done in other countries then New Zealand can be used, if it is clear that the location of research does not affect the results.
There are local variations in the work of DoC, depending on the natural resource of the region. The Southland region has a strong profile within eco-tourism and will take visual effects into account when processing any consent application. Due to the tourism industry here, there is a very slim chance of being granted a non-notified consent application, but it will most likely be a notified no matter the size of the project28. This region’s biggest concern is however the recent boost in the whale population. This raises serious concerns for the possibility to receive resource consent for Foveaux Straight and most of the southern coastline of Southland.
Commercial fishing will most likely not be a problem29since the fisheries usually work in areas further out from the coastline. However, the recreational fishing could be a concern.
27 Ericksen, Kris, Department of Conservation, 2010-11-17 28 Funnell, Greig, Department of Conservation Southland, 2010-12-01 29 Hopkins, Anthony, Crest Energy, 2010-11-05 21
A map with boundaries of all local and regional councils can be seen in figure 6.1 below and in appendix III.
Figure 6.1 Map of local and regional councils30
6.2.4 Assessment of Environmental Effects (L. Jonsson) An assessment of environmental effects, AEE, is a critical part of the resource consent application and is administratively speaking an attachment to the resource consent application. There are guidelines to obtain from the Fourth Schedule of the RMA, section 88, but most likely the council will be able to provide more specific requirements including information needed for the council plan. As recommended for the resource consent as a whole, the AEE should be discussed with the consent authorities at an early stage.
Generally speaking the AEE should contain the following information31: A description of your proposed activity. An assessment of the actual and potential effects on the environment of your activity. Where the above effects are likely to be significant and a description of available alternatives. A discussion of the risk to the environment from hazardous substances and installations.
30 Local Government New Zealand, Local Government Sector. (2010-10-16). Website. 31 Ministry for the Environment (2006). A Guide to Preparing a Basic Assessment of Environmental Effects. 22
For contaminants, an assessment of the nature of the discharge and sensitivity of the receiving environment to the adverse effects and any possible alternative methods of discharge, including discharge into any other receiving environment. A description of how the adverse effects may be avoided, remedied or mitigated. Identification of the persons affected by the proposal, the consultation undertaken, if any, and any response to the views of any person consulted. Where an effect needs to be controlled, a discussion of how it can be controlled and whether it needs to be monitored. Where appropriate, a description of how this will be done and by whom.
More general information about the AEE can be obtained from the AEE report32 - there is also relevant extracts from the Resource Management Act to be found in the reports’ Appendix 1.
6.2.5 Indigenous population (M. Krell) The indigenous population of New Zealand are named Māori, or sometimes referred to by themselves as Tāngata whenua. They came from the Polynesian islands in canoes and settled in New Zealand in the 13th century. In 1840 the Treaty of Waitangi was negotiated between the British Crown and northern chiefs. This made the Māori British subjects in return for a guarantee of Māori property rights and tribal autonomy. Conflicts in the Māori and English copies of the treaty resulted in a brief civil war in which much Māori land was confiscated by the colonial power33.
The effect today is that the debate of what rights the Māori as a group actually have according to the treaty is ongoing. For example 20% of all fishing quota are given directly to Māori34, but a Māori claim to the rights of New Zealand’s foreshore and seabed was refused in 2004 in favour of the Crown. This decision is however presently up for debate in parliament at the moment, and will most likely result in some compromise between the Crown and the Māori.
The important issue is to be aware that the traditional rights of the Māori are at times unclear, but that local Māori should be consulted when planning a project in order to avoid conflict. Even though the rights may be unclear they still have a strong say in most matters35.
The Māori may however be a large asset instead36. The New Zealand government has an ongoing process to finally settle all historical claims against the Crown by the Māori. Settlements are done for each Iwi (tribe), and mostly end in financial compensation in cash and/or Crown-owned property37. This means that the Iwis which have made settlements now has financial power, and are mostly very keen on investing in their own area. For example the Iwi on Chatham Islands are keen on investing in the wave power project there (CHIME)38. Another example is the telecom company 2Degrees which is partially owned (~20%) by the Māori trust Te Huarahi Tika. Considering the relatively large economical value of wave power it should be rather easy to get Iwi to take a positive side towards a possible project.
32 Ministry for the Environment (2006). A Guide to Preparing a Basic Assessment of Environmental Effects. 33 Wikipedia. Māori. (2010-09-15). Website. 34 The New Zealand Seafood Industry. Quota Management System (2010-09-15). Website. 35 Hopkins, Anthony, Crest Energy, 2010-11-05 36 Ericksen, Kris, Department of Conservation, 2010-11-17 37 Office of Treaty Settlements. What is a Treaty Settlement? (2010-01-06). Website. 38 Venus, Garry, Chatham Islands Marine Energy, 2010-11-05 23
6.2.6 Time and Costs involved in Obtaining Consents (L. Jonsson) The council has 10 working days from that an application is submitted to decide if there should be a public notification or not, given that no further information is requested. If a non- notified application is granted, meaning that public submissions and hearings are not required, the RMA allows the council 20 working days to process the application. In the case of a notified application (both limited and public) the limit is 70 working days39. The council will then reach a decision.
The total time required for a resource application is in the end set by the level of cooperation with the affected parties. There are two examples of this, the Chatham Islands Marine Energy, being the best case scenario, and the Crest Energy project, being the worst case scenario. Chatham Islands Marine Energy has insured a high level of community support and involved the local Iwis as an investor. They received their resource consent in 13 weeks. It can’t be compared without conditions to the Crest Energy project, which initially was to be a very large-scale project and which has chosen a region of unique environmental interest. But it has however been brought up by other parties that Crest Energy did not work towards the public enough to ensure their support. Their application for resource consent has so far taken two years and is currently in the Environmental court.
As a point of reference the resource consent process for a wind power farm is normally budgeted to a cost of 8 million NZ dollars40, which corresponds to about 40 million SEK. This is however mostly due to a strong opinion against wind power by residents in the area affected, and is not directly transferable to a case of marine energy projects.
6.3 Application process for grid connection (M. Krell) The following section has been written in the context of connecting a theoretical wave power generator park as described in section 9.2. It is in essence a shorter version made easier to read of the Electricity Governance (Connection of Distributed Generation) Regulations 2007. For more detailed description of the rules regarding grid connection, or connection that in regard of electrical specifications differ from what is mentioned in section 6.2, please refer to the regulations mentioned above.
The Electricity Commission is a Crown entity that oversees New Zealand’s electricity industry and markets. The Commission regulates the operation of the electricity industry and markets (wholesale and retail) in accordance with the Electricity Act and government energy policy.
The commission has issued a set of regulations, The Electricity Governance (Connection of Distributed Generation) Regulations 2007, to ensure that the best conditions exist for workable and effective competition on the electricity market. The regulations set out the default terms of connection. For connection of a distributed generation greater than 10 kW these terms can be contracted out of but apply if no other agreement has been reached41.
39 Sinclair Knight Merz (2008). Developing Small-Scale Renewable Energy Projects in New Zealand. 40 Jessep, Gaynor, Energy Efficiency and Conservation Authority, 2010-11-18 41 New Zealand Government (2007). Electricity Governance (Connection of Distributed Generation) Regulations 2007 24
The regulations further states that distributors (i.e. grid owners) must make publicly available, free of charge, e.g. application forms for connection, grid operation standards, application fees and what information must be provided with an application.
Generally an initial application involves a detailed description of the distributed generation that may be of interest to the distributor. The distributor must within 5 business days of receiving the application and fee, give written notice whether or not the application is complete.
Within 30 business days of receiving a complete initial application the distributor must give the company that wishes to connect an electrical generator, hereinafter called the generator, information about the capacity of the distribution network, to what extent a connection of the distributed generation may endanger the grid in terms of safety, voltage, power quality and reliability; and any measures or conditions necessary to address such matters. Information must also be given regarding the approximate costs of any network-related measuring needed and an estimate of the time this may delay the connection of the distributed generation. If the generator making the application requests more information from the distributor in order to be able to consider further actions, such information must be provided to the generator within 10 business days.
If the generator wishes to make a final application, this must be handed in to the distributor within 12 months of receiving the final information mentioned above.
The distributor must notify the generator weather the application is approved or not within 80 days of receiving the final application, if the facility is capable of generating 5 MW or more. A distributor must approve the final application, subject to reasonable conditions, as long as the application has been made accordingly with the regulations referred to in this section42.
If the connection is approved by the distributor, the notice must include the details of the connection and charges payable by the generator.
The generator must now within 30 business days give notice to the distributor if it intends to proceed with the connection. A decision not to proceed with the connection does not prevent the generator to make a new application at a later time.
At longest the application time will be 33 weeks, not including the time taken by the applicant to make the actual application.
42 New Zealand Government (2007). Electricity Governance (Connection of Distributed Generation) Regulations 2007 25
7. Economical aspects (M. Krell) The information in the following section comes from literature43 and staff communication44 with Ministry of Economic Development (MED), unless otherwise stated.
7.1 Electricity prices The electricity spot price in New Zealand fluctuates a lot, a consequence of having a largely hydro-based system. There are no subsidies to renewable electricity generation, and as a comparison the long run marginal cost for wind power is regarded to be SEK 475-650 (NZD 95-130) per MWh45.
The average monthly spot prices for the period 2000-2009 can be seen in figure 7.1, and in more detail in table 7.1 below46. The average price for the whole period was 325,6 SEK (NZD 65,1)/MWh.
Figure 7.1 Average monthly spot prices for the period 2000-2009
43 Ministry of Economic Development (2009). New Zealand’s Energy Outloook 2009, Reference Scenario. 44 Lawrence, Simon, Ministry of Economic Development, 2010-11-23 45 Lawrence Simon, Ministry of Economic Development, 2010-09-24 46 SEB (2010-10-08). Exchange rate 5SEK/NZD. 26
Table 7.1 Annual electricity spot prices and production 2000-2009 Year Average price Annual max Annual min Annual net comment (SEK/MWh) (SEK/MWh) (SEK/MWh) production (GWh) 47,48 2000 162,5 205 116 38 285 2001 398 1184 80,5 38 437 Dry year 2002 201 353,5 117 39 853 2003 415 1020,5 161,5 39 879 Dry year 2004 185 348 68 41 333 2005 371 581 156 41 513 2006 396 803,5 130,5 42 118 2007 259,5 344 127,5 42 276 2008 624 1530 147,5 42 287 Dry year 2009 232 353 113,5 42 010
These spot prices are for the Haywards node, which is the most commonly referred to in the NZ system. There are however 40 nodes in the system and variations are periodically very large.
7.2 Indicative unit cost for different generation options
Indicative unit costs for different generation options are outlined in table 7.2 below.
Table 7.2 Costs of different types of generation in New Zealand49 Generation type Cost (SEK/MWh) (NZD/MWh) Wind 390 – 505 78 – 101 Hydro 365 – 525 73 – 105 *Gas 370 – 620 74 – 124 *Coal 410 – 510 82 – 102 *Geothermal 350 – 460 70 – 92
* These prices do not include an adjustment for New Zealand’s Emissions Trading scheme.
7.3 Energy Outlook The Ministry of Economic Development (MED) expect the wholesale price of electrical energy to reach 500 SEK (NZD 100)/MWh by 2018. As a point of reference, MED believes that this is the price of the electrical energy from Meridian Energy’s Makara wind farm outside Wellington. Meridian Energy says that the price rather is 400 SEK (NZD 80)/MWh, due to use of different interest rates and include the land price if sold after dismantling the farm after decommissioning in their calculations.
One reason for utilities to invest in wind power despite it theoretically being too expensive is the spread of risk. Since most utilities also are electricity wholesalers they may lose money during a dry year if their portion of hydropower in the generating portfolio is too large.
47 Ministry of Economic Development (2005). New Zealand Energy Data File 2005 48 Ministry of Economic Development (2010). New Zealand Energy Data File 2010 49 Meridian Energy (2009). Facts about wind energy. 27
The wholesale price of electricity is today around 400 SEK (NZD 80)/MWh, an increase by almost 60% in real terms since 2000. This is mostly due to substantial gas price increase and a large portion of gas fired power plants in the generation mix. MED forecast most of the new baseload generation to be renewable – geothermal, wind and hydro. Geothermal is currently the most economical option for new electricity generation. This might lead to a flattening of the wholesale price over the next five years if available resources can be consented and built in time to meet the growth in demand.
The New Zealand electricity market has an average annual increase of demand of about 2%50, or approximately 120MW of installed power51. One of New Zealand’s largest power plants is the coal and gas fired Huntly power station. The power station’s four oldest units have a combined power of about 1000 MW, and the two oldest will most likely be turned into dry year reserve plants between 2012 and 2017 and the following two between 2019 and 202152,53. This will most definitely result in an increase of demand of installed power and consequently an increase of the wholesale electricity price.
The future of gas in New Zealand is unclear. Gas reserved have been forecasted to last 7-8 years for the last four years, but sufficient small new discoveries keep pushing this forecast into the future. MED assume that without major new gas discoveries there is insufficient security of supply to support any new baseload gas-fired electricity generation plants. Existing plants are assumed to keep running with similar gas prices until ~2020, after when gas prices are expected to increase. At around 2035 alternative energy resources are assumed to be a more economical option.
The wholesale price is expected to reach about 580 SEK/MWh by 2030. The MED forecast of wholesale electricity price can be seen in figure 7.3 below.
50 Ministry of Economic Development (2010). New Zealand Energy Data File 2010. 51 Gamman, Joe. Mighty River Power. 2010-11-04 52 Genesis Energy (2010). Genesis Energy Statement of Corporate Intent, Financial Year 2010/11 – 2013 53 Ministry of Economic Development (2009). New Zealand’s Energy Outlook 2009, Reference Scenario. 28
Figure 7.3 Average wholesale electricity prices54
The MEDF was an invention of the previous government (Labour). The present government (National) does not support subsidies, why a continuation of the MEDF is unlikely. New Zealand Trade and Enterprise help small domestic companies to export. This is nothing helpful to Seabased Industry AB, but may prove helpful if a future “Seabased NZ” wants to use New Zealand as a base for export to the smaller Pacific Islands.
The Aotearoa Wave and Tidal Energy Association (AWATEA) forecast that large scale marine energy will be a part of the New Zealand energy mix by 2025.55
As usual the main obstacle for utilities is the cost. If electrical energy can be produced at a cost lower than 1000 SEK (200 NZD)/MWh the technology would already attract interest from the industry. There is however a large amount of available wind resources that will be prioritized investments. This is mostly due to known procedures in the application of resource consent and known maintenance costs.56
As a point of reference 400 MSEK (80MNZD) will buy you a 25 MW hydropower plant in New Zealand with a utility rate of 60-70%. The available resources are however rather limited. The larger utilities will most likely not invest in any plant smaller than 20 MW, but there is a market for smaller units (less than 20 MW) for line companies wanting to strengthen weak parts of their grids. These companies are then less price sensitive and will most likely accept prices around 600 SEK (120 NZD)/MWh.57
54 Ministry of Economic Development (2009). New Zealand’s Energy Outlook 2009, Reference Scenario. 55 Eldred, Nick. Meridian Energy. 2010-11-22 56 Ibid 57 Ibid 29
8. Competing interests
8.1 Marine life restrictions (M. Krell) The department of conservation (DoC) is New Zealand’s governmental body for conserving natural and historical heritage. DoC aims to preserve the marine environment through marine reserves, marine mammal sanctuaries, marine parks and “other protected marine areas”58.
Marine reserves are the most comprehensive protection tool of marine environments in New Zealand. They are specified areas of the sea and foreshore that are to be preserved in their natural state for scientific study. Marine reserves may be established in areas that contain underwater scenery, natural features or marine life that is of such unique type or quality that their preservation is in the national interest59.
Within a marine reserve it is prohibited to build any structure except as necessary for permitted monitoring or research. This makes all marine reserves unavailable for the establishment of wave power parks.
Figure 8.1 below show a general overview of New Zealand’s marine reserves.
Marine mammal sanctuaries can be established in all New Zealand’s fisheries waters to create a permanent refuge for marine mammals. In such sanctuaries activities that may harm particular mammal species are prohibited, e.g. certain, but not all, types of fishing60.
Marine parks are protected areas of marine environment. They are similar to marine reserves, but generally do not afford as high a level of protection. Marine parks are generally established to protect a certain quality within them, e.g. a certain type of species or typical underwater features61.
Other protected marine areas then above mentioned do exist to preserve areas of cultural importance, e.g. traditional food gathering, or other importance to local interests. Areas of significant conservation value might be identified by regional coastal plans, giving them extra protection when applying for regional consents. Wildlife sanctuaries may also be established to protect particular species in a defined geographical area.
Marine reserves, mammal protection areas and wildlife sanctuaries are all managed by the DoC. Marine parks are generally protected by the Ministry of Fisheries. The same applies for culturally protected areas.
Although the DoC does not manage all protected areas mentioned above, they do keep information about if an area of interest is protected, and whom to contact for more information. For a more general overview the DoC has an online GIS-tool that layers all national conservation areas; http://gis.doc.govt.nz/
58 Department of Conservation. Mission and Vision. (2010-09-16). Website. 59Department of Conservation. Conservation, Marine reserve information (2010-09-16). Website. 60Department of Conservation. Conservation, Marine mammal sanctuaries (2010-09-16). Website. 61 Department of Conservation. Conservation, Marine parks (2010-09-16). Website. 30
Figure 8.1 A general overview of New Zealand’s marine reserves62
8.2 Fishing (M. Krell) New Zealand controls the world’s fourth largest coastal fishing zone in an Exclusive Economic Zone, producing about one percent of the world’s fish catch. Seafood is the country’s fifth largest export, and the business supports more then 22 000 jobs domestically63. From this one can conclude that the fishing industry might want to have a say in the possible restriction of use of some areas at sea, which might be the result of a wave power park. New Zealand fisheries work with deep sea fishing as well as picking of lobster and shellfish, oyster dredging and laying of nets.
The fishing is controlled by a quota management system. A total allowable catch (TAC) is set every year by the Ministry of Fisheries, to make sure that the stock will not be depleted. The TAC is then divided into a number of individual transferable quotas, which are effectively right to fish a defined portion of the TAC64.
One can through contact with quota owners in an area of interest determine definitively the locations of areas that are most important (or less important) for fishing. The New Zealand Seafood Industry Council (SeaFIC) can direct the contact to the appropriate quota owners and other fishers in any area of interest. General information on exclusion zones (for fishing) and management areas for specific species can be found on the Ministry of Fisheries’ NABIS online map database; www.nabis.govt.nz.
62 Department of Conservation. Conservation, Marine reserve information (2010-09-16). Website. 63 Seafood Industry Council. Business. (2010-09-16). Website. 64 Seafood Industry Council. Business, Management & Sustainability. (2010-09-16). Website. 31
8.3 Navigational and military restrictions (M. Krell) A number of military restricted areas exist around New Zealand. Official exercise areas only exist around the North Island, but contact with the New Zealand Navy is recommended when investigating any promising location. A general picture of exercise areas can be seen in figure 8.2 below65. A more detailed mapping of restricted areas can be found in appendix IV.
Figure 8.2 Military restricted areas66
Since New Zealand for the most part lack navigational hazards on approaches to it’s ports, there are generally no shipping routes. Ships over 45 metres in length and/or 500 gross tons are to keep at least 5 nm (ca. 9 km) of the land or any outlying islands until alteration is required to make port.
This generally means that major shipping is of no concern for establishing wave power since location within 5 km of the coast is desired. However locations close to ports might be preferable due to proximity to grid connection points, in which case shipping routes should be discussed with local harbour authorities.
65 Land information New Zealand. Annual NZ notices to mariners, New Zealand Nautical Almanac 2010-11. (2010-09-22). Website. 66 Ibid 32
8.4 Domestic marine energy projects (L. Jonsson) There have been 24 known domestic marine energy projects in New Zealand during the period of 2004-200867. At the annual meeting of AWATEA in August 200968, the figure was set to 25, where 19 are supposed to be device projects and not just theoretical modelling. Not all projects are still active, according to both sources. There isn’t a lot of publicly available information for the majority of these projects – a complete list of the 24 known projects has not been found.
The following chapter will provide information over the three projects granted funding from the Marine Energy Deployment Fund, MEDF, and other projects recently mentioned in local media. An overview of the different projects can be seen in table 8.1 below.
Crest Energy Limited Crest Energy received the first MEDF grant of NZ$1.85 million (9,25 MSEK) in May 2008 for deployment of up to three tidal stream generators in Kaipara Harbour north of Auckland, subject to the granting of consents for the project. This project in its whole comprises up to 200 completely submerged marine tidal turbines with a total maximum generating capacity of around 200 MW. The deployment of the 200 units is divided into four stages, where stage one Figure 8.3 OpenHydro turbine consists of up to 20 units, but the consent application includes all 200 units. They use OpenHydro technology, the turbine shown in figure 8.369, developed in Ireland and USA. The energy producer and retailer Todd Energy Limited acquired a 30 % shareholding in 2009.
The consent application to use the resources in Kaipara Harbour for 35 years was launched before the deployment fund was granted and the initial hope was that the application would be approved by late 2008. However, the juridical process is still in progress and Crest Energy filed further documents with the Environment Court in August 2010. Much more information about the project is to be found at http://www.crest-energy.com/.
Wave Energy Technology – New Zealand, WET-NZ WET-NZ was in May 2009 awarded with NZ$760,000 (3,8 MSEK) in round two of the MEDF for a project involving constructing and deploying their third pre-commercial, half- scale device with a peak capacity of 20 kW70. The half-scale device is due to be completed in the first quarter of 2011 for a deployment later in the year.. WET-NZ is a government-funded consortium R & D project, consisting of Industrial Research Ltd and Power Projects Limited and they are located in Christchurch.
67 Power Projects Ltd (2008). Development of Marine Energy in New Zealand. 68 AWATEA (2009). Annual General Meeting. 69Crest Energy Limited. Gallery. (2009-09-24). Website. 70 Energy Efficiency and Conservation Authority. Media Releases. (2010-09-24). Website. 33
The information on their website http://www.wavenergy.co.nz/ isn’t up to date; so much of the following information has been extracted from different media sources.
The project has been running since 2004 and was in October 2008 rewarded with 6 more years’ of funding. Their latest technical achievement is a second 2 kW research ¼ –scale device deployed in Christchurch in September 2009. Previously there have been two tests done at sea with prototypes of smaller scales – both tests lasting for about 30 days. They are currently researching an ocean-scale device and their message is that the pace of development is likely to increase71.
The latest about the project is that they in September 2010 secured US Figure 8.4 The funding totalling more than 2 MNZD (10 MSEK) for a project to deploy WET-NZ unit its device in the United States. The project will include building and testing a ¼ - scale version of the device of the coast of Oregon and continue their modelling research at Oregon State University.72
The active quarter-scale device has spent periods of up to 82 days in Pegasus Bay near Christchurch and is currently in the water generating power. In 2010 Power Projects secured resource consents for two test sites to deploy up to three wave energy converters.
The WET-NZ is a point absorber device technology called “WaveWobbler” and it’s expected to work in depths of 25 meter or more73. It is a slack-moored with a floating arm that reacts against a more stable spar buoy. It aims to extract energy from multiple modes of motion, i.e. heave, surge and pitch. The hydraulic drive is designed to adapt to the incident wave field in order to optimize energy extraction. An illustration of the WET-NZ’s Point Absorber Wave Energy Converter is seen in figure 8.4 above.
Chatham Islands Marine Energy Ltd (CHIME) CHIME was awarded with 2.16 MNZD (10,8 MSEK) in July 2010 in order to install a shore- based device to capture wave energy. The project will see the construction of an oscillating water column to power two 110 kW Wells turbines. The device will be installed on the south- west coast of Chatham Islands and will supply electricity into the island’s electricity network. The project launched the consent application to the Chatham council the 31st of May and was granted consent on the 5th of August.
Other Projects Most projects aim to import technology from overseas – the exception mentioned is WET- NZ.
71 http://www.awatea.org.nz/docs/EO-presentation-2009.pdf (2010-09-27) 72 http://www.scoop.co.nz/stories/BU1009/S00919/nz-wave-power-project-secures-us-funding.htm (2010-10-19) 73 Power Projects Ltd, (2008) Development of Marine Energy in New Zealand 34
Neptune Power Neptune Power has no available information on the project on their website http://www.neptunepower.co.nz/, except for that they aim to install an array of marine current turbines in Cook Strait, close to Wellington. The project is however ongoing and seen as one of the most prominent in New Zealand and they had a great deal of publicity in 2006 and 2007.
Neptune Power submitted their consent application in August 2007 for a single prototype device trial in Cook Strait. They were granted the consent on April 2008 for 35 years74. The consent documents indicate that Neptune Power plans to deploy its prototype device in late 2009, but so far there are no news indicating that anything has happened. Neptune has a proposal to develop a 900 MW commercial project at an adjacent site by 2021 in three commercial stages beginning in 2011, but this is considered extremely ambitious75 and can be questioned since they have not had any media publicity in several years and their website seems to be inactive.
The intent is to import the initial turbine, while the following turbines intended for commercial power production could be developed and manufactured in New Zealand. There are two types of turbines mentioned in relation to the project, both technologies from the UK76. There is the TidEL device from SMDHydrovision and TNEI from Ocean WaveMaster Limited. There is no detail if these devices are purchased and tested or not. There is also a possibility that they will design their own turbine.
Energy Pacifica Energy Pacifica is an Auckland company working with tidal energy with an interest in Cook Strait. They have announced plans to submit consent application for a 30 MW (20 units) installation and are currently preparing the application77. No website for the project is found.
AWATEA has mentioned78 another two projects that are not appearing in media – and not much information is found about these. Tidal Power Seamills is developing a large seabed- mounted vertical axis tidal turbine, and is constructing a small-scale prototype. Tidal Energy NZ is constructing a small-scale prototype as well.
A public but dormant project is Power Generation Projects. Power Generation Projects were focused around Pelamis importation and domestic fabrication but has been dormant since a UK visit in June 200779.
74 Power Projects Ltd, (2008) Development of Marine Energy in New Zealand. 75 Ibid 76 Power Projects Ltd, (2008) Development of Marine Energy in New Zealand. 77 Contrafed Publishing. Energy NZ. (2010-09-27) 78 AWATEA (2009). Annual General Meeting. 79 Power Projects Ltd, (2008) Development of Marine Energy in New Zealand. 35
Table 8.1Compilation of the domestic marine energy projects in New Zealand Name Crest Energy WET-NZ CHIME Neptune Energy Power Pacifica Type Deployment R&D Deployment Deployment Deployment Technology Tidal open Wave Point Oscillating Marine Marine turbine Absorber Water Column current current turbines turbines Stage Consent in Half scale device Pre-construction Dormant Preparing environmental (third pre- surveys consent court commercial application device) Scale 200 MW 50 kW/unit 220 kW 900 MW 30 MW (full scale device) Est. dep. 2012 Unknown 2012 (2011-2021) Unknown year Est. price Unknown Unknown ~0,50 NZD/kWh Unknown Unknown
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9. Analysis
9.1 Site selection Due to availability of detailed information80 for six specific locations, these have been selected for a closer analysis. The location of the sites can be seen in figure 9.181.
The attractive depth for a wave power park is 30 – 50 meters and the wanted seafloor type is sand. The distance from the shore should be within 1.5 – 10 km, due to the high costs related to cables offshore.
The six sites have been are at a distance of 6 km of the coast, range in water depth from 23 to 65m and have proximity to onshore transmission grid or distribution network and proximity to potential load centres. The sites are distributed around the country to represent the range of wave climates around New Zealand. There are three locations on the west coast; Port Waikato, Taranaki and Westport. Southland is located on the southernmost coast, and Gisborne and Wairarapa are situated on the east coast. A more detailed map of general areas that may be suitable can be found in Appendix V.
The majority of the west coast of New Zealand has approximately the same wave climate with an available energy flux that for most of the time is over 25 kW/m. Westport is a remote location, somewhat isolated by the Southern Alps and Taranaki has a less suitable sea floor Figure 9.1 Locations of wave climate measurement sites composition82 compared to the area around Port Waikato.
Southland has the highest available energy flux in the country and even though the South Island is much less populated then the Northern Island, there is energy consuming industry, i.e. an aluminium smelting plant, near the coast.
Gisborne and Wairarapa both have two big disadvantages; the wave climate is more uneven and the sea floor consist more of mud then sand83. These locations, and thereby the whole east coast, has not been further investigated.
80 Power Projects Ltd, (2008) Development of Marine Energy in New Zealand. 81 Power Projects Ltd, (2008) Development of Marine Energy in New Zealand. 82 Appendix II 83 Appendix II 37
For comparison, the prospected energy production has been calculated at all six sites in the following section.
We have in accordance to the arguments above, chosen to look closer at Southland and the west coast of the Waikato region. Most information below is gathered from meetings with involved parties in the different regions.
9.1.1 Southland The region Southland is located at the south coast of the South Island, see figure 9.2 to the right. The main city is Invercargill. The measuring point for our wave climate data is located 6 km offshore at the coordinates -46.401 latitude and 167.677 longitudes, where the depth is 31 meters.
Southland has a smaller number of inhabitants compared to other parts of the country and the immediate picture the region is communicating of themselves is a region keen on attracting investments. This picture is mainly taken from the structure of Venture Southland, a joint Figure 9.2 initiative of the Invercargill City Council, Southland District Council Southland region and Gore District Council. They have three focuses in their work- attract tourists, new residents and new businesses.
Venture Southland has in the Southland Regional Energy Strategy84 pointed out that a lack of available energy is a “major barrier to regional and national economic growth”. The strategy advocates that a variety of energy resources should be developed.
The infrastructure at the Southland coast should not prove a problem for a wave power project. There is a large deep water port in Bluff capable of handling containers and loose goods as well as facilities to service the offshore oil industry and bunkering vessels. An aluminium smelter across the harbour suggests that there is a strong grid in the region.
9.1.2 Waikato The region of Waikato is located in the north-western part of the North Island, see figure 9.3. The measuring point for our wave climate data is located at Port Waikato, 6 km offshore at the coordinates -37.440 latitude and 174.635 longitudes, where the depth is 23 meters.
The wave resources along the west coast of the Waikato region are, as concluded earlier, rather good. The Waikato Regions Renewable Energy Assessment estimates that a wave farm array here has the potential to generate in the 1000 MW range85. Figure 9.3 The Regional Energy strategy further encourages the coordination of Waikato region Waikato agencies “to promote the establishment of a trial project to identify the effects and value of new marine technologies suitable to the region”.
84 Venture Southland. (2005). Southland Regional Energy Strategy 85 Waikato Regional Energy Forum. (2009). The Waikato Regions Renewable Energy Strategy. 38
Of the three sites on the west coast we have chosen to further investigate Port Waikato. This is mainly due to its relative proximity to Auckland both as a financial centre and as a load centre. Further benefits of this location are that Contact Energy has received resource consent to build a wind power farm in the area86, which means that the strength of the grid will be improved. In terms of deployment infrastructure, the closest port is port of Onehunga in Auckland. It is the smallest part of Ports of Auckland, but is located on the west coast and close to the large industrial area of South Auckland.
9.2 Energy production examples for a 10MW facility in NZ (L. Jonsson) The following chapter is a rough estimate of the energy production for a 10 MW facility, based on scatter diagrams87 found for six locations in New Zealand.
9.2.1 Assumptions for a 10MW wave park The rated power of one generation unit is 25 kW or 50 kW. The buoy has a diameter of 4 meters and a power capture ratio of 20%. We have assumed a square layout and only considered the case when the waves hit the park perpendicularly to one of its sides. We have not taken any considerations in the production calculations to potential problems or power losses due to tidal variations, or any losses related to transmission. Since we have no access to any power matrix for the wave energy converters (WECs), we have assumed that the energy absorption is linearly dependent on the incoming power flux, e.g. the WEC will generate twice the electric power when the power flux is doubled (until rated power is reached).
The prospected yearly energy production Eannually for a single point absorber has been calculated in MATLAB according to
Eq. 9.1 where (parts per thousand) is the concurrency frequency given in the bin i,j of each site specific scatter diagram and 8760 is the hours of one year.
The utility factor has been calculated according to
Eq. 9.2 where the rated power is set to 25 kW or 50 kW for a single generating unit.
The effect of the park was set to 10 MW, giving a park with 25 kW-units 400 buoys and one with 50 kW-units 200 buoys. The 25-kW park will consist of 20 rows and the 50 kW-park of 15 rows with a square layout. Placing the buoys with a spacing distance of 10 times its diameter, i.e. 40 meters, the parks will have an array length of 800 and 600 meters respectively.
86 Cockroft, Graham, Contact Energy, 2010-11-22 87 Power Projects Ltd, (2008) Development of Marine Energy in New Zealand. 39
The power capture ratio for 15 rows will be
Eq. 9.3 and for a park with 20 rows it will be Using these numbers, an estimation of the parks power production can be done in the same way as for a single point absorber.
9.2.2 Site specific results Using the assumptions in section 9.2.1 and the equations in section 4, the following results in table 9.1 has been calculated with site specific data.88
Table 9.1 Utility factor for a 10 MW park consisting of either 25 kW-units or 50 kW-units. Site Utility factor 25 Utility factor 50 Yearly production for Yearly production for kW-park (value kW-park (value 25 kW-park (value 50 kW-park (value for single unit) for single unit) for single unit) for single unit) Port Waikato 65 % (70%) 46 % (46%) 57 (0.15) GWh 41 (0.20) GWh Taranaki 68 % (72%) 49 % (54%) 59 (0.16) GWh 43 (0.23) GWh Westport 70 % (74%) 51 % (51 %) 61 (0.16) GWh 46 (0.22) GWh Southland 80% (83%) 66 % (66 %) 70 (0.18) GWh 58 (0.29) GWh Gisborne 31 % (35%) 20 % (20 %) 28 (0.08) GWh 18 (0.09) GWh Wairarapa 42 % (47%) 28 % (28 %) 37 (0.10) GWh 24 (0.12) GWh
Figures 9.4-9 below show how the utility rate changes with rated power for the six locations mentioned in section 9. The graphs also show how much of the available energy at each location is utilized depending on the rated power (ratio of utilized power).
If a device has a low rated power, e.g 1 kW, there will be a sufficient power flux for the unit to produce at its rated power for most of the time. As the rated power increases the amount of time when there is enough power flux for the unit to produce at rated power decreases. There is an economical balance to find the most suitable rated power for any given location. At a lower rated power the utility factor will be high, but you will not be able to absorb all energy once the power flux is higher then what is needed for production at rated power. Likewise if one uses a device of higher rated power one can absorb more of the energy, but the utility factor will be lower.
The decision may be helped by simultaneously looking at the ratio between the available energy over a period of time and how much of this energy which is absorbed (ratio of utilized power). At a certain point one will no longer get a significant increase in absorbed energy when increasing the rated power. Here one must weigh the income from the extra energy absorbed against the cost of increasing the rated power.
88 Power Projects Ltd, (2008) Development of Marine Energy in New Zealand. 40
Figure 9.4 Port Waikato
Figure 9.5 Taranaki
41
Figure 9.6 Westport
Figure 9.7 Southland
42
Figure 9.8 Gisborne
Figure 9.9 Wairarapa
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9.3 Contacted parties In case of misprints most addresses can be found on business cards in appendix VI.
9.3.1 Public authorities Department of Conservation – Wellington Hawke’s Bay Conservancy Kris Ericksen Conservation Support
PO Box 5086, Wellington 6145 181 Thorndon Quay, Wellington Ph: +64 4 470 8426 Email: [email protected]
Department of Conservation – Southland Conservancy Greig Funnell Marine Technical Support Officer
PO Box 743, Invercargill 9840 Level 7, CUE on Don, 33 Don Street, Invercargill Ph: +64 3 211 2423 Email: [email protected]
Ministry of Economic Development Simon Lawrence Manager Energy Information & Modelling
PO Box 1473, Wellington 6140 33 Bowen Street, Wellington Ph: +64 4 474 2620, Mobile: +64 21 819 826 Email: [email protected]
Energy Efficiency and Conservation Authority Gaynor Jessep Advisor Energy Supply
PO Box 388, Wellington Level 1, 44 The Terrace, Wellington Ph: +64 4 495 2974 Email: [email protected]
Venture Southland Steve Canny Group Manager Enterprise and Strategic Projects
PO Box 106, Invercargill 9840 143 Spey Street, Invercargill Ph: +64 3 211 1405, Mobile: +64 21 516 347 Email: [email protected]
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Environment Waikato (Waikato Regional Council) Blair Dickie Not contacted during this thesis due to miscommunication.
Ph: +64 7 859 0851, Mobile: +64 21 894 451 Email: [email protected]
9.3.2 Companies Contact Energy Graham Cockroft Chief Operating Officer
PO Box 10742, Wellington 6143 Level 1 Harbour City Tower, 29 Brandon Street, Wellington Ph: +64 4 462 1108, Mobile: +64 21 243 7488 Email: [email protected]
Mighty River Power Joe Gamman R&D Manager Geothermal
PO Box 90399, Auckland Level 14, 23-29 Albert Street, Auckland Ph: +64 9 308 8200, Mobile: +64 27 286 7121 Email: [email protected]
Meridian Energy (& AWATEA) Nick Eldred Water Infrastructure Development Manager
PO Box 2454, Christchurch 8140 25 Sir William Pickering Drive, Christchurch Ph: +64 3 357 9770, Mobile: +64 21 567 043 Email: [email protected]
Crest Energy Anthony Hopkins Director
PO Box 93, Whitford 2149, Auckland Ballantyne House, 3rd floor, 101 Custom Street East, Auckland Ph: +64 9 530 8225, Mobile: +64 21 40 75 40 Email: [email protected]
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Chatham Island Marine Energy Gary Venus Director
PO Box 105-774, Auckland 1143 Ph: +64 9 367 0631 Email: [email protected]
National Institute of Water & Atmospheric Research Craig Stevens BE PhD Marine Physics
Private Bag 14901, Kilbirnie, Wellington 6241 301 Evans Bay Parade, Greta Point, Wellington Ph: +64 4 386 0476 Email: [email protected]
AWATEA / Power Projects John Huckerby International Representative / Director
PO Box 25456, Panama Street, Wellington 6146 Level 8, 111 The Terrace, Wellington Ph: +64 4 499 0060, Mobile: +64 27 494 6581 Email: [email protected], [email protected]
9.3.3 Other contacts Waikato Regional Energy Forum Dutch Glass A man without official connections, but with a large network and would most likely prove very helpful for any wave power involvement in the Waikato Region.
Ph: +64 7 84 64 147, Mobile: +64 27 232 2538 Email: [email protected]
HERA (New Zealand Heavy Engineering Research Association) Nick Inskip Industry Development Manager Not contacted during this thesis, but referred to by others we have met. Is also a member of AWATEA. Will most likely prove a good contact when looking for possible manufacturing partners.
Ph: +64 9 262 4750 Email: [email protected]
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10. Conclusions The following conclusions are made based on the possibilities of entering the New Zealand market with the strategy of selling a 10 MW park, according to this thesis problem definition. For other possibilities of entry that has arisen during the course of this thesis, see section 10.6. New Zealand is a developed country with high level of education and a stable political situation. No reasons can be found why an operation in the country would not go smoothly.
10.1 Physical conditions The physical conditions for Seabased’s technology are close to perfect in terms of wave climate, bathymetry and seafloor types. There is an abundance of wave energy all around the country’s coasts with a large variety of wave climates. This makes it possible to choose a site either for the maximum energy or a site with wave conditions similar to those which Seabased has previous experience with. In general, the wave climate is more uneven and storms are more often seen on the east coast. Since the waves coming in to the west coast originate from the Southern Ocean, the wave climate is very stable which makes us suggest a closer investigation of the west coast.
The seafloor composition is mostly sand and the bathymetry is very suitable with few steep gradients close to the coast.
A rough estimate over coastlines suitable based on these physical conditions can be found in appendix V.
10.2 Electrical distribution system The electrical distribution system has a layout with a high capacity national grid, which runs along the middle of the country, and outlying weaker grids reaching the coasts. This might prove disadvantageous at times since the grid might have to be strengthened in order to receive large amounts of power at the fringe. This can however be solved by co-planning projects with other new developments, for example wind power, and thus share the costs of the grid upgrade.
The weaker grids at the coast might also prove to be an advantage, since this opens up for a secondary market. An increase of population in small coastal communities at a few months of the year, due to holiday homes, has caused a need for grid upgrades. Many line companies are however looking into the possibility of strengthening the grid locally by installing diesel generators at the ends of the grid instead of upgrading the lines. Since this is mostly in the coastal areas Seabased’s technology might very well prove to be an alternative to diesel generators, although it would be at the 1MW scale rather than 10MW.
10.3 Energy market outlook The New Zealand energy market and authorities are well aware of marine energy and welcome it in the system. The larger utility companies however do not seem prepared to yet make large investments in Seabased’s technology. This is mostly due to the risk involved in a new technology. Contacted companies claim that there are other renewable projects “on stock” for the next ten years, and that they prefer known technologies (i.e. wind and geothermal power) as long as there are resources available.
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MED predict a fairly constant wholesale electricity price for the next 3-4 years and then expects a rather steep increase in prices which will reach about 500 SEK (100 NZD)/MWh by around 2018. The price increase is mostly due to an end of available resources for further geothermal power.
We did during our trip to New Zealand observe a rather strong public opinion against wind power. NIMBY (Not In My Back Yard) was ever present, and we were told that the cost of a resource consent application as a result is very costly (8 MNZD / 40 MSEK is not unusual). Based on that New Zealand has an increasing demand for electricity, the already high costs for resource consents for wind power and a strong public opinion against wind power combined with the upcoming shortage of new geothermal power we believe that Seabased’s technology will be of interest for the utility companies to include in their portfolio within a five year period.
10.4 Resource consents To receive resource consent our suggestion to Seabased is to first launch a trial size park in the scale of one LVMS and 3-10 WECs. It would be easier to receive resource consent for this type of project, and the information gained would then help greatly in receiving resource consent for a larger project at a later stage.
We believe that there is a potential for such trial parks already today. We came across a local entrepreneurial network that where very interested in Seabased’s technology. One member of the network had for example made possible a wind power farm in the area before utilities showed interest. A utility is planning a wind power farm in an area suitable for Seabased’s technology, and we believe that with the help of such a network this utility might be made interested in a trial wave power park in the same area.
The principal structures of Seabased’s technology are very similar to that of commercial mussel farms, which are relatively easy to receive resource consent for.
10.5 Suitable location for deployment Coastlines suitable for further investigation based only on physical conditions can be found in appendix V. Based on the infrastructure of the country, we have some additional conclusions. We initially believed Southland to be a suitable area for development of wave power parks. The Department of Conservation in Southland however made us believe that receiving resource consent for the area would be extremely difficult due to concerns for the whale population and visual impact from the buoys. The visual impact might be less of a problem if a park would be situated close to the aluminium smelter at Tiwai Point (Bluff), but navigational issues might then arise with the commercial port in Bluff.
There is however a small community on Stewart Island of the Southland coast. This is a community that is isolated from the mainland electrical grid, and due to the generation today coming from diesel generators the price of electricity is very high (~0.52 NZD (2.6 SEK)/kWh). The island today has a total installed power of just over 1MW. This means that a wave power park of ten generators would make a substantial contribution and might even prove profitable. With the generators being stationed close to the community neither the visual impact nor the concerns for whales should prove to be unsurpassable hinders.
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The Waikato region is close to the economical centre Auckland, where ¼ of the population lives and most electricity is consumed. The region has seemingly a large percentage of the physical suitable coastal lines on the north island and a high profile in electricity production already. Our recommendation would be to look into this region primarily when prospecting for a commercial sized wave power park.
10.6 Alternative markets New Zealand has many and well functioning business connections to the Pacific Islands, why the country might serve well as a stepping stone or base for these markets. There the generation is mostly diesel, why the sensitivity to price is lower than in New Zealand.
10.7 Final recommendation Based on the above, we conclude that the Physical conditions in New Zealand are suitable for Seabased’s technology Political climate in New Zealand is suitable for Seabased’s technology Market will be ready for full approach within five years New Zealand may serve as a good base for the Pacific Islands market. To build a trial size park of 3-10 WECs to make the resource consent process easier.
We do however believe that Seabased already at present would benefit from approaching utilities in New Zealand about interest in a trial park to build up a local knowledge base which may make the market accessible at an earlier stage than otherwise.
11. Discussion The conclusions and recommendations made in this thesis are heavily based on the information retrieved during meetings with actors on the electricity energy market in New Zealand. There are also limitations related to the analysis data, especially since the probability analysis are based on assumptions due to the fact that there are no commercial parks to refer to.
Over all, the responses and information retrieved from our visit to New Zealand added a lot and changed our initial conclusion of the markets potential. Being students and approaching authorities and companies as such, has surely had both its advantages and disadvantages. The most tangible advantage was that the meetings could be unofficial and it’s not sure that all the information retrieved could have been collected by a company representative. However, the information that we had regarding the technology and price estimates was not that comprehensive, giving the result that the level of interest from companies was hard to interpret.
Some prerequisites have been more deeply investigated then others, based on the available data. For example, the physical conditions presented provide a very general picture on a national level and should only be used for a decision on further investigation. We are however very confident that a suitable location for deployment will be easy to find from a physical perspective, based on the overview data that we have found and discussions with people in New Zealand.
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All data used in the calculations are found in the same report and we have found no other source of information in order to validate these numbers. When discussing the available wave energy resource with two project leaders for marine energy projects in New Zealand, their reaction to the numbers was that they were too high. Apart from the fact that the numbers could be too high, they still give an estimate of the size of the energy flux available for different coastlines and thus serve its purpose as a decision base for further investigation.
The calculations themselves are very theoretical and done with many assumptions. The data found in the scatter diagrams contained another time period then the energy period Te used in the equation when calculating the wave energy flux. Although giving a slightly incorrect wave energy flux when using the different time period, this error is negligible in the context of all other assumptions made. More critical is the assumptions made for the behaviour of a single and a park of WECs. Having no information of how the technology would behave for the wave climates found in New Zealand, we have made rough assumptions. When comparing the calculated values for utility factor between a park and a single WEC the values are almost identical for some locations. We would thus recommend one to see these numbers as an indication of the energy flux available and not as energy production numbers for this technology.
The results from this study indicate that New Zealand is a suitable market from a physical point of view; however the market will not be otherwise ready in at least five years. We are confident about our conclusion and that the information in this thesis is of good enough quality to be able to serve as a decision basis, according to the aim.
Suggestions If one wishes to extend the work we have started there are a few things we would suggest to investigate.
We have not further investigated what opportunities exist in terms of production partners. We have however briefly come into contact with HERA (Heavy Engineering Research Association of New Zealand) which has connections to AWATEA. We believe that they would be a first good contact in this area.
We never came into contact with Environment Waikato, the regional council of the Waikato region. It may be of interest to hear their view of a possible wave power project in the region. At the same time it may be of interest to talk to the local DoC office to hear what environmental issues they are most concerned about in the area.
Contact with more grid owners might be interesting. Partly to investigate if there are any particularly suitable connection point, either from the perspective of already strong enough parts of the grid, or perhaps there are lines which are already planned to be strengthened and a sharing of costs might be beneficial for both parties. At the same time an investigation might be done on how large the potential market is for Seabased to supply units for strengthening the grid locally, and what the conditions from the grid companies then would be.
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12. References
Publications AWATEA (2009). Annual General Meeting. Available through http://www.awatea.org.nz/docs/EO-presentation-2009.pdf Baddour, E (August 2004). Unpublished. Energy from waves and tidal currents. Institute for Ocean Technology National Research Council. Available through http://www.oreg.ca/docs/REPORT_OCEAN_ENERGYAug24.pdf Bernhoff, H. (2009). Excercises for Wave Power Course, 5th edition. Uppsala University. de Vos, R et al (2009). EnergScape Basis Review, Section 2 Renewable Resources. Auckland: NIWA Department of Conservation (2010). New Zealand Costal Policy Statement. ISBN 970-0-478-14837-4 Energy and communications branch of Ministry of Economic Development (2009). Chronology of New Zealand electricity reform. Genesis Energy (2010). Genesis Energy Statement of Corporate Intent, Financial Year 2010/11 – 2013. Available through http://www.genesisenergy.co.nz/shadomx/apps/fms/fmsdownload.cfm?file_uuid=5601 A3C1-C09F-4299-6D89-11E43156FBD1&siteName=genesis Komar, P D. (2005) Environmental Change, Shoreline Erosion & Management Issues. ISSN 1174 3085 Meridian Energy (2009). Facts about wind energy. MFS0005 07/09 MED0259. Available through http://www.meridianenergy.co.nz/NR/rdonlyres/B496C006-3F64- 4F0E-8305-C22CAE732A4E/24828/0259MERWebPDF_FA.PDF Ministry for the Environment (2006). A Guide to Preparing a Basic Assessment of Environmental Effects. ISBN 0-478-30102-2 Ministry of Economic Development (2005). New Zealand Energy Data File 2005. ISSN 0111-6592 Ministry of Economic Development (2009). New Zealand’s Energy Outloook 2009, Reference Scenario. ISSN 1179-3996 Ministry of Economic Development (2010). New Zealand Energy Data File 2010. ISSN 1177-6684 New Zealand Government (2007). Electricity Governance (Connection of Distributed Generation) Regulations 2007 SR 2007/219 New Zealand Government (2008). Electricity Industry Reform Amendment Bill. Available through: http://www.parliament.nz/NR/rdonlyres/20740AA3-0D9D-4E48- B2F1-2F5D3945AB13/85518/DBSCH_SCR_4081_6014.pdf Power Projects Ltd (2008). Development of Marine Energy in New Zealand. Available through http://www.eeca.govt.nz/sites/all/files/development-of-marine- energy-in-nz-june-2008.pdf
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Rahm, M. (2010). Ocean Wave Energy. Acta Universitatis Upsalie, Uppsala University. ISBN 978-91-554-7713-4 Sinclair Knight Merz (2008). Developing Small-Scale Renewable Energy Projects in New Zealand. Available through http://www.eeca.govt.nz/node/1535 Stephens, S A. & Gorman, R M. (2006). Extreme wave predictions around New Zealand from hindcast data. New Zealand Journal of Marine and Freshwater Research, Vol. 40: 399-411. Venture Southland. (2005). Southland Regional Energy Strategy. Available through http://www.southlandnz.com/LinkClick.aspx?link=http%3a%2f%2fwww.southlandnz. com%2fPortals%2f0%2fDocuments%2fBusiness%2fInfrastructure%2fEnergy%2520 Supply%2fEnergy%2520Strategy.pdf+&tabid=979&mid=3143 Waikato Regional Energy Forum. (2009).The Waikato Regions Renewable Energy Strategy. Available through http://www.ew.govt.nz/PageFiles/13327/Waikato%20regional%20energy%20strategy. pdf
Websites Contrafed Publishing. Energy NZ. (2010-09-27) http://www.contrafedpublishing.co.nz/Energy+NZ/Perspectives+2010/Making+waves. html Crest Energy Limited. Gallery. (2009-09-24). http://www.crest-energy.com/gallery.htm Department of Conservation. About DoC, Mission and Vision. (2010-09-16) http://doc.govt.nz/about-doc/role/mission-vision-and-statutory-mandate/mission-and- vision Department of Conservation. Conservation, Marine mammal sanctuaries. (2010-09- 16) http://doc.govt.nz/conservation/marine-and-coastal/marine-protected- areas/marine-mammal-sanctuaries Department of Conservation. Conservation, Marine parks. (2010-09-16) http://doc.govt.nz/conservation/marine-and-coastal/marine-protected-areas/marine- parks Department of Conservation. Conservation, Marine reserve information. (2010-09-16) http://doc.govt.nz/conservation/marine-and-coastal/marine-protected-areas/marine- reserve-information Electricity Commission. Industry. (2010-09-24) http://www.electricitycommission.govt.nz/industry Energy Efficiency and Conservation Authority. Marine Energy Deployment Fund. (2010-09-24) http://www.eeca.govt.nz/node/1300 Energy Efficiency and Conservation Authority. Media Releases. (2010-09-24). http://www.eeca.govt.nz/node/3064 Four Corners. New Zealand Infrastructure. (2010-09-16) http://www.fourcorners.co.nz/new-zealand/infrastructure
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GeoNet. About GeoNet. (2010-09-17) http://www.geonet.org.nz/images/site/seis_map_large.jpg GeoNet. Earthquake. (2010-09-17) http://www.geonet.org.nz/images/earthquake/Shallow_Seismicity.png Land information New Zealand. Annual NZ notices to mariners, New Zealand Nautical Almanac 2010-11. (2010-09-22). http://www.linz.govt.nz/hydro/ntms/annual-notices-archive/index.aspx Land Information New Zealand. Tidal levels. (2010-09-23). http://www.linz.govt.nz/hydro/tidal-info/tide-tables/tidal-levels/index.aspx, Local Government New Zealand, Local Government Sector. (2010-10-16) http://www.lgnz.co.nz/lg-sector/maps/index.html NIWA. Bathymetry. (2010-09-22). http://www.niwa.co.nz/our-science/oceans/bathymetry Office of Treaty Settlements. What is a Treaty Settlement? (2010-01-06) http://www.ots.govt.nz/ Seafood Industry Council. Business. (2010-09-16) http://www.seafoodindustry.co.nz/sc-business The Encyclopedia of New Zealand. Sea Floor Geology. (2010-09-22) http://www.teara.govt.nz/en/sea-floor-geology/7 The New Zealand Seafood Industry. Quota Management System. (2010-09-15) http://www.seafoodindustry.co.nz/qms Wave Power Project – Lysekil. (2010-09-15) http://www.el.angstrom.uu.se/forskningsprojekt/WavePower/Lysekilsprojektet_E.html Wikipedia. Climate of New Zealand. (2010-09-17) http://en.wikipedia.org/wiki/Climate_of_New_Zealand Wikipedia. Māori. (2010-09-15) http://en.wikipedia.org/wiki/Maori
Verbal references Canny, Steve. Venture Southland, 2010-12-01 Cockroft, Graham. Contact Energy, 2010-11-22 Eldred, Nick. Meridian Energy, 2010-11-22 Ericksen, Kris. Department of Conservation, 2010-11-17 Funnell, Greig. Department of Conservation Southland, 2010-12-01 Gamman, Joe. Mighty River Power. 2010-11-04 Glass, Dutch. Waikato Regional Energy Forum, 2010-11-09 Hopkins, Anthony. Crest Energy, 2010-11-05 Huckerby, John, AWATEA/Power Projects, 2010-11-15 Jessep, Gaynor. Energy Efficiency and Conservation Authority, 2010-11-18 Lawrence, Simon. Ministry of Economic Development, 2010-11-23 Stevens, Craig. NIWA, 2010-11-19 Venus, Garry. Chatham Islands Marine Energy, 2010-11-05
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APPENDIX I – Tidal table for some locations in New Zealand
Standard Port MHWS MHWN MLWN MLWS Spring Neap MSL HAT LAT Range Range
Auckland 3.32 2.79 0.97 0.42 2.90 1.82 1.86 3.65 0.03
Bluff 2.81 2.42 1.04 0.57 2.24 1.38 1.74 3.09 0.29
Dunedin 2.18 1.81 0.40 0.04 2.14 1.41 1.09 2.41 - 0.16
Gisborne 2.10 1.71 0.75 0.36 1.74 0.96 1.23 2.21 0.24
Lyttelton 2.56 2.03 0.71 0.22 2.32 1.32 1.38 2.69 0.10
Marsden Point 2.71 2.28 0.86 0.41 2.30 1.42 1.56 2.99 0.11
Napier 1.86 1.46 0.40 0.04 1.82 1.06 0.94 1.96 - 0.06
Nelson 4.26 3.23 1.41 0.45 3.81 1.82 2.31 4.66 0.03
Onehunga 4.20 3.38 1.37 0.49 3.71 2.01 2.42 4.54 0.09
Picton 1.49 0.98 0.45 0.00 1.49 0.53 0.74 1.63 - 0.12
Port Chalmers 2.14 1.77 0.45 0.16 1.98 1.32 1.12 2.36 - 0.07
Port Taranaki 3.55 2.74 1.11 0.31 3.24 1.63 1.94 3.89 - 0.05
Tauranga 1.89 1.59 0.46 0.14 1.75 1.13 1.04 2.09 - 0.11
Timaru 2.46 2.06 0.79 0.48 1.98 1.27 1.44 2.65 0.24
Wellington 1.76 1.44 0.72 0.45 1.31 0.72 1.08 1.85 0.37
Westport 3.25 2.55 0.94 0.23 3.02 1.61 1.76 3.61 - 0.12
APPENDIX II – Sediment chart
APPENDIX III – local and regional council boundaries
APPENDIX IV – Military areas
APPENDIX V – Map of potentially suitable sites
APPENDIX VI – Business cards