The impact of 100% renewable electricity on hydropower generation in Aotearoa New Zealand

Aotearoa New Zealand aims to achieve 100% renewable electricity by 2030, currently standing at over 85% from hydro, geothermal, wind, and solar resources. The country’s isolated geography currently necessitates dispatchable hydropower and fossil fuels to manage intermittency and maintain grid stability. A literature review of countries also with high renewable penetrations – Norway, Iceland, Austria, Canada, and Brazil – revealed challenges including price volatility, operational flexibility requirements, dry year risks, and increasing electricity demand from economic growth and electrification. The objective of this paper is to understand the potential consequences for Aotearoa New Zealand by comparing the projected 2030 electricity demand, based on scenarios developed by the government, against anticipated renewable generation capacity, using data on the current generation fleet and the near-term investment pipeline. The method assumed that added capacity of renewables would follow similar generation profiles to existing generators. It is concluded that the 100% renewable electricity target by 2030 is feasible, but only if the committed and actively pursued projects, including offshore wind, are commissioned. Then there would be sufficient generation for all scenarios, maintaining nearly full hydro storage year-round. Minor shortfalls occur during low wind/solar periods (0 to 1% of the year), but with significant excess generation (55 to 65% of the year) where 27 to 42% would be available for effective storage utilisation in the power system. To this end, the shortfalls can be addressed, to some extent, with committed and actively pursued battery storage, which was not included in the analysis due to the uncertainty of how they will be participating in the future electricity market.