New Zealand's geothermal energy is a proven resource for direct heat and power generation. The country has been actively producing electricity from geothermal resources since the late 50s. It currently provides an installed capacity of 444 MWe, which forms about 7% of New Zealand's total installed capacity for electricity generation of approximately 5,000 MWe.

New Zealand lies in the southwest corner of the Pacific 'ring of fire' chain of volcanic activity. Therefore, the majority of New Zealand's geothermal generating capacity is situated in the Taupo Volcanic Zone in the upper North Island. New Zealand uses water saturated geothermal reservoirs, and there are currently seven producing geothermal fields in New Zealand: Wairakei, Poihipi, Ohaaki, Kawerau, Rotokawa, Mokai, Ngawha.

Production is dominated by two companies, Mighty River Power and Contact Energy Ltd. One field is owned by a local Maori Trust, Tauropaki. A small development in Ngawha in Northland is run by Top Energy Ltd and the Kawerau geothermal field is operated by the Crown. There are, however, other geothermal resources which are restricted from development for cultural, scientific, tourism and environmental reasons.

Developed geothermal field outputs, estimates for 2004 by GNS Scientific Staff

Geothermal energy is increasingly significant to New Zealand's energy supply. Considering the recently announced decrease in New Zealand's reserves of natural gas, together with the uncertainties in lake storage for hydro power generation, due to El Ninio and La Ninia weather patterns, there is renewed interest in geothermal energy as a long term reliable source of energy. According to the July 2004 edition of New Zealand's Energy Data File, New Zealand is currently around 20% self sufficient in oil, a reduction of 8% over the previous year.

Expansions on currently developed geothermal fields could increase production to approximately 600 MWe over the next few years, while potential developments of known geothermal resources could add a further 600 MWe. The growth rate of New Zealand's power demand is around 2% per year and, in view of the depletion of natural gas reserves, development of additional thermal and geothermal generation capacity is increasingly necessary.

The known geothermal resources within New Zealand have the capacity to meet possibly 25% of New Zealand's electricity supply using current commercially proven technologies. With further greenfield exploration and the potential development of new technologies for exploitation of deeper hotter resources, it is conceivable that geothermal resources have the potential to meet 50% of New Zealand's power needs in the future.

The New Zealand government signed the Kyoto protocol in 2003 and is developing policies to encourage the further development of geothermal energy, with the aim to reduce greenhouse gas emissions and effectively find appropriate renewable alternatives to fossil fuel. Energy supply planning for New Zealand anticipates that geothermal power will at least double over the next 10 years. Even more geothermal production will be needed by 2010 to meet increasing demand without resorting to coal and therefore compromising New Zealand's commitment to the Kyoto protocol.

According to the New Zealand government, 2005 will be a year of important change for the energy sector. Sustainable energy is a most important concern for future energy production, considering the global economy is moving into a carbon-constrained future. An emissions charge is to be introduced in 2007, creating a factored environmental cost into society's energy choices. New Zealand's economy will be directly exposed to the price of carbon, around $NZ15 a unit or 'carbon credit', but capped at $NZ25 a unit. A 'carbon credit' or emission unit is equivalent to one tonne of carbon dioxide (or its equivalent in other green house gas emissions) that would otherwise have been emitted into the atmosphere.

The policies include:

• The National Energy Efficiency &
  Conservative Strategy (NEECS) for improvement of efficiency by 20%, and increase use of renewables including geothermal, which has been identified as one of the priority sectors.

• The National Climate Change Policy Package (CCPP) which is designed to reduce CO2 emissions by reducing dependence on fossil fuels and placing more emphasis on renewable sources.

• Sustainable Development Programme of Action for Energy. One of the outcomes of this programme is to ensure that renewable sources of energy are developed and maximised.

• Resource Management (Energy and Climate Change) Amendment Bill. This bill seeks to align national energy objectives (such as those described above) with local government plans. If passed, the bill will require decision makers to have regard for efficient energy use, climate change, and consider the benefits of renewable sources of energy.
  

• Development of geothermal assets owned by the crown. The crown has indicated that it would develop its geothermal assets further.

Geodynamics Limited, which is also investing in the geothermal energy industry in the Cooper Basin in South Australia, has signed a Heads of Agreement with Siemens NZ Ltd for a joint promotion of the Kalina Cycle technology, which is suitable for low enthalpy geothermal fields, and they are using in their Hot Fractured Rock (HFR) Cooper Basin project. Under the agreement, Geodynamics will work exclusively with Siemens NZ for geothermal applications in New Zealand, and are already participating in one 16 MWe Kalina Cycle bid.

Geothermal energy has a significant future in New Zealand. In contrast, whether it will be as successful internationally is uncertain. However, New Zealand's progress is an example of the possibilities for other nations to invest in geothermal resources and to lower green house gas emissions.

Geothermal energy in New Zealand already provides a substantial amount of electricity production and is certain to provide increasing quantities in the future.

Kawerau Geothermal Field	Discharge from the Wairakei Geothermal Field