The case for energy loans: read our latest explainer
The cup runneth over with good electrification news and this week's selection features EVs becoming cheaper than fossil cars in China, a promising peer-to-peer electricity sharing scheme on Aotea / Great Barrier Island, massive growth in renewable generation (and massive opportunity for New Zealand to become the Saudi Arabia of renewable electricity), Energy Mad reaches a milestone, and a special electric toy for the snow lovers.
New cars, old cars, as long as they're electric cars
As energy expert Tony Seba said, “cost curves are like gravity - and gravity doesn’t care about your opinion.”
The cost curves for EVs continue to go down and in China, battery electric vehicles are now cheaper than internal combustion vehicles. Estimates vary for when that will happen elsewhere, but Gartner predicts it will happen in 2027 and Goldman Sachs thinks it will happen in 2025.
Second hand EVs are also cheaper than comparable gas cars in the US because more of them are coming onto the market. Nearly one in five new cars sold in 2023 was electric, which is more than six times higher than 2018.
As the Atlantic story says: “Most of the discourse around EVs is about new cars: Every model launch and the latest high-tech EV feature elicits buzz; Joe Biden’s climate agenda is all about new-EV sales. But the masses might first buy a used one—which means that how plentiful, dependable, and affordable used EVs are could be a key factor in decarbonizing America.
“EV adoption is really going to skyrocket when people realise that used EVs are out there and they’re reliable."
Share and share alike
Last week’s selection included some interesting research on the role of microgrids in remote Australian regions, and Tama Toki is showing the same thinking is relevant for Aotea / Great Barrier, where he grew up and “where energy security can be precarious”.
As he told RNZ: “Aotea has no utility for power, so everyone there's super self-sufficient. A lot of people have solar, some kind of car battery set up. Our core business is based there and we had to put a big energy bank in ... and the idea around intermittent generation, if we're not using the assets, the idea was to share with the papakāinga, the community that we worked adjacent with and that's how the seed was planted."
The team is building its own peer to peer sharing grid and trialling it with 10 homes on the island. It was awarded $50,000 to develop its sustainable energy technology as a part of the Climate Accelerator programme by Creative HQ. And, like Rewiring Aotearoa, he thinks New Zealand should be the world's first renewable economy.
Renewables are do-able
Climate change is, in large part, an energy problem, with energy accounting for over 70% of global greenhouse gas emissions.
But a new report from IRENA shows that 85.5% of new installed generation capacity in 2023 was renewables (mainly wind and solar) and fossil generation is on the wane.
In an interview with The Business of Tech podcast, Rod Drury shared his desire to turn New Zealand into the Saudi Arabia of renewable electricity.
Rather than focus on reaching carbon zero, which he says is kind of like going on a diet, he thinks we should focus on creating the world’s cheapest renewable electricity. This benefits everyone and everyone can grasp the concept. We have the resources. We just need the ambition.
One of Rewiring Aotearoa’s goals is to create a fully electric economy by 2040. We already have a highly renewable grid, but we are still heavily reliant on fossil fuels for transport and industry. That means only 30% of our total energy use could be considered renewable. So let’s make New Zealand more electric.
Learning about less
Energy Mad has been offering free personalised energy assessments to low-income homes in Auckland since May 2021 and it has just delivered its 11,000th energy assessment.
It offers homes free LED Ecobulbs and efficient shower heads and makes suggestions around improving efficiency, like cleaning filters on heat pumps and using them more efficiently or turning off old energy hogging second fridges. Its database calculates that actions undertaken as a result of these assessments will save these homes $7.35 million per year on their power bills while reducing New Zealand’s peak load by 2.3MW.
Efficiency is a big part of the equation, but it pays to remember that electrification is the efficiency we have always been looking for when compared to burning fossil fuels. Electric machines are significantly more efficient than their fossil fuel counterparts and that drives many of the cost savings in a fully electrified home. For example, an electric car is about four times more efficient at converting energy into motion than a petrol car and, even in cold regions, heat pumps are still more than twice as efficient as most other heating options.
And it’s even more cost effective when you fuel those machines with rooftop solar, which is the cheapest form of delivered energy New Zealanders can get.
Up, up and away!
Skiing is a high impact leisure pursuit when it comes to emissions. Diesel groomers, diesel generators potentially powering lifts, big fossil fuel cars driving up the mountain. But for those who want to experience the wonders of gravity through the wonders of electricity, have we got the toy for you: The Zoa PL1 Portable Rope Tow System.
Just as an e-bike is great for optimising fun and focusing on the downhills, the Zoa is “designed to get skiers and snowboarders more out of their time in the backcountry”.
Give us a backcountry hut with 10 of these, please!
RNZ's Kate Newton reports on the "madness" of thousands of new piped gas connections being installed into houses every year, despite dwindling supplies and higher lifetime costs.
Casey said it was positive that the numbers showed people starting to leave the gas network of their own accord, but not all households were in a position to make that choice.
"If we don't plan for a decommissioning of the gas network, then it's going to be a chaotic transition, where vulnerable New Zealanders really suffer."
As the research of Rewiring and others has shown, gas is expensive, it's getting more expensive, it's terrible for your health when burned inside and there are substitutes available right now that, on average, do the same job for less money over the long run for households, would save the country billions on health costs and lost productivity, and don't pump out unnecessary emissions.
Around 300,000 homes and businesses have connections to the gas network (it’s estimated another 300,000 use more expensive bottled gas, mostly in the South Island). The number of active connections has started to decline recently and the country’s largest gas network, Vector, is forecasting no new residential or commercial connections after 2029.
Upfront capital costs are the main barrier for many homes, which is why we're working hard on a low-interest, long-term loan scheme that can be used to pay for electric upgrades, including hot water heat pumps. This would mean paying for a new thing with a loan would be cheaper than paying to run the old thing.
Read more about the scheme here.
Disconnection costs are also a major barrier. We have seen examples where households permanently disconnecting from the network have been charged between $1,000 and $2,000 to have a meter permanently removed (i.e. digging up the pipes to the road), even though it should only cost customers $200 to have the connection capped at the house.
RNZ even reported a case where a business customer was quoted $7,500 but took the case to Utilities Disputes, where complaints about disconnection costs have been rising.
The Australian Energy Regulator and the state of Victoria have now capped the disconnection fees to a few hundred dollars to stop this kind of behaviour and protect households.
"My message is to not wait it out – instead, grab the opportunity to get ahead. In the long term, unless we hit another Maui, which is unlikely and would take decades to bring online, the era of cheap, abundant gas is over. Business leaders need to start planning now." That's EECA's chief executive Marcos Pelenur writing in the Herald about businesses struggling with rising gas prices and faster than expected declines in gas reserves.
Read moreDownloadTalk about driving change!ETrucks' Ross Linton is at the forefront of New Zealand's nascent electric trucking scene and can claim responsibility for a number of firsts, from the country's first electric concrete truck to the country's first battery swap set up. Since he brought his first electric truck in to the country back in 2018, the technology has advanced massively and driving on electrons has become quite a bit cheaper than diesel and, not surprisingly, that's inspiring a great deal of interest among businesses.
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