Geothermal energy in New Zealand

Geothermal energy is an important renewable energy source for New Zealand, providing around 18% of our electricity. In addition, geothermal energy is also directly used for industrial process heat, space heating and water heating.  

Geothermal generation is expected to grow in the coming decade, and will continue to be one of the country’s largest sources of renewable energy. 

How much of our electricity comes from geothermal?

2021 data is sourced from MBIE. Future indications come from the Climate Change Commission and New Zealand Energy Scenarios TIMES-NZ 2.0 modelling.

  • 18 % 2021
  • 15-19 % 2035

How does geothermal energy work?

Geothermal energy taps the earth’s natural heat flow from the hot mantle (at around 1000oC) up into the cooler crust. New Zealand has an abundant supply of geothermal energy because we are located on the boundary between two tectonic plates.

The crust is thin along this rift and supports at least 23 distinct geothermal plumes or fields. Of these fields, eight currently generate electricity or supply direct users. These are: Wairakei, Tauhara, Rotokawa, Mokai, Nga Tamariki, Ohaaki, Kawerau, and Ngāwhā.

To produce electricity, hot geothermal fluid flows from production wells through a system of pipes and vessels to drive turbines that, in turn, produce electricity.

Steam condensate and unused geothermal fluid are usually injected back into the geothermal system to maintain pressure and contain potential contaminants. 

In addition, hot water and steam from geothermal sources is used directly for industrial processes including pulp and paper-making, wood processing, dairy manufacturing and heating greenhouses, reducing reliance on fossil fuels. In some cases, the hot water and/or steam is a by-product of electricity generation, making it especially cost-effective. 

The future of geothermal energy in New Zealand 

Geothermal electricity is unusual among renewable electricity generation types, because the energy from the steam is available constantly and consistently across time. Because of this reliability, geothermal energy will continue to play a key role in NZ’s energy future.

Total geothermal electricity capacity in New Zealand stands at over 900 MW, making us the fifth largest generator of geothermal in the world. It has been estimated that there is sufficient geothermal resource for another 1,000 MW of electricity generation.

Geothermal energy is also going to become cleaner. Currently, some carbon dioxide dissolved in geothermal fluid is emitted as part of the generation process. The industry is currently developing technology to re-inject (sequester) most of these gas discharges. For instance, the Te Huka power station currently re-injects 90% of its previous greenhouse gas emissions. With further development, geothermal CO2 emissions should decline to negligible levels.

There are also opportunities to use more direct geothermal energy, such as for industrial process heat, or by finding uses for waste heat from geothermal power stations. 

Advantages and limitations of geothermal energy

Advantages

  • Reliable – Geothermal energy supply isn't dependent on weather conditions, making it consistent and reliable. This makes it an ideal energy source to supply baseload generation to work alongside intermittent renewable energy sources such as wind and solar which supply flexible, dynamic generation to the grid.

  • Low emissions – While electricity generated from geothermal energy produces some greenhouse gas emissions, the average emissions intensity of geothermal electricity is about one-quarter of that of the cleanest natural gas-fuelled power station. There are some technologies emerging that capture minerals and greenhouse gases and enable their re-use or sequestration.

  • Somewhat abundant – New Zealand has better access to geothermal energy than many other countries as we are positioned between two tectonic plates. It has been estimated that we have capacity to roughly double the current electricity generation from geothermal energy - although further increases might be difficult to achieve.

  • Location – New Zealand’s high temperature fields lie either side of our major demand centre of Auckland; at Ngawha in Northland; and through the Taupō Volcanic Zone between Ruapehu and Whakatane and near the supporting high-voltage transmission system. Because of this, adding extra geothermal electricity capacity to the grid may require less extensive system upgrades than connecting other, more remote, generation facilities. 

Limitations

  • Development cost and time – Developing a geothermal power station is an expensive and risky proposition, including drilling of the wells which is expensive and time-consuming. Finding a location is difficult as specialised geo-survey techniques are required to identify locations for geothermal power stations. In addition, many kilometres of expensive steel piping is needed to connect multiple wells spread over a large area to the turbine building. This means that it can take several years to go from concept to completion. 

  • Specialised maintenance – While geothermal is a renewable resource, it needs careful management and monitoring to control reservoir water and pressure levels and prevent land subsidence and depletion.

  • Emissions – Geothermal fluids contain some greenhouse gases (carbon dioxide and methane) which are transported to the surface when the fluid is extracted. While amounts vary from field to field and the amount that is released depends on the design of the power station, generally levels are still significantly less than natural gas-fuelled or coal fired power stations.

.
Insulated steam pipework at Wairakei Geothermal Power Station in the central North Island.

EECA and geothermal energy

EECA supported Essity’s ground-breaking geothermal project – a world first. At their site in Kawerau, Essity produces over 50,000 tonnes of toilet tissue and paper towel products every year. By switching from using natural gas to geothermal energy, Essity will reduce their carbon emissions by 23% and secure the future of the Kawerau site while supporting the local economy.  The project is co-funded by EECA through the Government Investment in Decarbonising Industry initiative (GIDI Fund).

Essity's groundbreaking geothermal project a world first

Geothermal heat pumps (GHPs), also known as ground-source heat pumps (GSHPs), have been co-funded by EECA to replace all fossil fuel boilers at Christchurch Airport through EECA’s Technology Demonstration Fund.

Christchurch Airport | Decarbonisation journey

EECA has also co-funded a number of other GSHP projects as part of the Christchurch rebuild programme including The Arts Centre, Christchurch Town Hall, Christchurch Bus Exchange, King Edward Barracks (Ngāi Tahu) and more.

A sustainable rebuilt city using geothermal heatpumps: The Christchurch Story(external link)

  • Learn more about geothermal energy

    Find more information on the New Zealand Geothermal Association website.

Geothermal energy for business

Explore the possibilities of geothermal direct heat and ground source heat pumps for your business.