A new report published by EECA (the Energy Efficiency and Conservation Authority) charts a path for the South Island's industrial sector to shift from fossil fuels to renewable energy, enhancing energy efficiency and preparing industry for a low-carbon economy.
The South Island Regional Energy Transition Accelerator (RETA) report consolidates findings from six regional reports, detailing energy demands and renewable supply options for medium to large businesses. The programme brings together key players across energy sectors and large energy users to drive this transition.
Currently, South Island industrial sites account for a nearly 80% of New Zealand's coal and 11% of LPG use, emitting 28% of the country’s process heat emissions. The report identifies opportunities for these sites to switch to renewables, emphasising cost reduction and infrastructure investment aligned with decarbonisation goals.
The report has drawn on analysis of 273 process heat sites in the dairy, meat, industrial, and commercial sectors.
Richard Briggs, EECA's Group Manager for Delivery and Partnerships, emphasised the financial viability of transitioning to clean technologies over the long term, noting potential cost savings and emissions reductions achievable through collaborative regional efforts.
“The South Island has some of the largest and most diverse industrial heat users in the country, using primarily coal, which highlights the opportunities for switching to renewables,” said Briggs.
“The report provides comprehensive information for businesses considering process heat decarbonisation in the years ahead. It will help decision makers with asset and infrastructure investments, reduce costs and result in implementation and action off the back of the analysis.”
To date, the RETA initiative has evaluated nearly 600 projects in the South Island aimed at reducing fossil fuel use and emissions, with approximately 100 fuel-switching projects already completed or planned. If all 600 were to be implemented when they become viable to do so, these efforts are projected to cut long-lived emissions by 6.2Mt by 2037 above ‘business as usual’ scenario.
“While we see momentum building, there is more work to do. This report provides the information to enable businesses and regions across New Zealand to move faster to transition to a low emissions economy and take advantage of the opportunities that emerge with clean energy and clever technologies,” Briggs said.
Electricity Networks Aotearoa Chief Executive, Tracey Kai, said EECA’s report provided valuable guidance for large industrial businesses undertaking fuel-switching projects and outlined the enormous opportunities — and the challenges that come with it.
“Switching large industrial businesses from coal and gas to electricity requires thorough planning and dedication from the businesses, and ideally, a close working relationship with the lines companies providing them with electricity,” said Kai.
“The infrastructure investments needed to enable these large energy-switching projects can be expensive, and like all major infrastructure, take time to plan and deliver.
“Reports like this one provide lines companies with visibility of large energy projects so they can plan and enable their fuel-switching. The insights will help the electricity distribution sector to plan and invest in the most efficient and effective way which will help keep costs as low as possible for consumers.”
Each project is a step closer to meeting the country’s climate change goals and lines companies are proud to help enable this, said Kai.
Insights from the report highlight the potential of biomass as a renewable fuel source, leveraging up to $605 million in wood residues from South Island forests over the next 13 years. It underscores the importance of prioritising energy efficiency in both biomass and electricity solutions, with potential savings and emission reductions through hybrid energy systems.
The transition to biomass has already been successful in 52 South Island schools, who have abandoned coal in favour of carbon-neutral wood pellets or chips as part of the Ministry of Education (MOE’s) School Coal Boiler Replacement Programme. This shift not only reduces emissions but also supports sustainable forestry practices, using waste products as fuel.
The report's recommendations urge collective action to address infrastructure, capital investment, and supply chain challenges, crucial for a comprehensive shift away from fossil fuels across the South Island's economy.
“EECA remains committed to supporting businesses in overcoming barriers and implementing projects that drive long-term cost savings and environmental benefits,” said Briggs.
Read the report here.
South Island Regional Energy Transition Accelerator (RETA) report
More information
Process heat is the energy used as heat mainly by the industrial and commercial sectors for industrial processes, manufacturing, and warming spaces. Some process heat emissions can be reduced by redesigning the underlying processes, but decarbonising the remaining heat demand will require switching from fossil fuels to low-emission fuels, such as wood fuels in boilers or electricity in electric boilers or heat pumps.