Shanker, Liam

The Impact of Climate Change on the New Zealand Electricity Market

Liam Shanker¹, Golbon Zakeri¹, Geoffrey Pritchard¹, and Hannah Andrews^1,2

Department of Engineering Science, University of Auckland

Meridian Energy Ltd., Auckland

The New Zealand electricity sector, dominated by hydroelectric generation, is arguably highly vulnerable to climate change. While the current generation resources seems adequate for maintaining security of supply, in the face of climate change, the inflow patterns may change drastically and we need to reassess the generation resource adequacy.

With current use of historically observed inflows, it is difficult to model how this system will behave under a varying climate. This research establishes a novel process for modelling historical inflows using quantile regression models. Our models can be utilized to generate sample paths of inflows, adjusted to represent various climate scenarios. Meridian’s hydrothermal power system model, LPCon, is employed to present forward-looking commentary about the electricity sector under different climate scenarios.

We find that by 2035, at a national scale, the average price and generation should not be much affected, but the seasonality within these parameters will likely change. Within this near future horizon, we report that a reduction in annual thermal generation may be offset by an average increase in hydroelectric generation along the Waikato river hydro scheme. However, by 2100, we anticipate a degree of stress in the market due to an expected decrease in water availability. In the worst case, we see that thermal generation will increase to ensure the security of supply, and higher prices may be observed.

This presentation is eligible for the ORSNZ Young Practitioners Prize.