Analysing techno-economic impacts of integrating wave power to achieve carbon neutrality and electricity based fuel exports: A case for New Zealand

Novel renewable energy technologies will be crucial for mitigating climate change and diversifying future energy systems. Wave power, in particular, has gained significant attention in recent years due to its higher global potential and growing technological maturity. This study analyses the techno-economic impacts of integrating wave power to achieve carbon neutrality and its role in enabling electricity-based fuel exports. Using EP-ALISON-LUT as a modelling tool, New Zealand is chosen as a case country, primarily due to its proximity to the Pacific Island nations and being one of the best sites with high wave power potential. Results show that in a cost-optimised energy system, there is no role of wave power as the system prefers low-cost solar photovoltaics and wind power. However, integrating wave power capacities does not drastically increase the annualised cost, but within the range of 0.9–1.7%. Thus, this cost increase can be weighed against technology diversification and reduction of electricity generation, particularly from solar photovoltaics, and storage requirements from batteries. Exporting e-fuels would require an additional 10% increase in generation capacity, resulting in a modest cost increase, but with a significant opportunity for boosting trade balance and creating additional local jobs. • Wave power with high potential offers energy system diversification for countries. • Techno-economic impacts of wave power on the energy system transition is studied. • Pure cost optimisation leads to no wave power capacity during energy transition. • Portfolio diversification with wave power increases cost in a range of 0.9–1.7 %. • Low-cost renewable energy enables large countries to export electricity-based fuels.