Ideasroom

The future of energy after Covid-19

This time of crisis gives us an opportunity to reflect on and consider the retooling and re-skilling of our capabilities and positioning our future workforce to meet the challenges we face in the energy sector, writes Alan Brent

The World Energy Council recently published its Issues Monitor for 2020. Therein energy leaders around the globe voice their perspectives on the critical uncertainties the sector faces and the action priorities it is working on.

For New Zealand, energy leaders suggest quicker actions are needed to address concerns around equity, security and sustainability. To this end, the three critical uncertainties emphasised relate to our Climate Framework, Innovative Transport and Market Design, which have seen increased impact. As action priorities, the leaders emphasise Renewable Energy, Energy Efficiency and Talent. The latter relates to increasing concerns about the talent pipeline as the workforce ages and immigration levels are tightened. 

Notwithstanding the current pandemic situation and a looming recession, once the economy resumes the demands on, and from, the energy sector will increase substantially. This is especially so with our aspirational goal of a just transition to a net zero carbon economy. The recent document the Ministry of Business, Innovation and Employment (MBIE) released for comment – Accelerating renewable energy and energy efficiency – in section three highlights the need to address capability and skills barriers if the transition is to be realised. 

Where might the largest demand for new capabilities and skills be? 

From a power generation perspective, the report the Interim Climate Change Committee (ICCC) released in 2019 – Accelerated electrification – shows only a slight increase in demand due to hydropower capacity expansion, but at least a 50 percent increase in demand due to new geothermal capacity, by 2035. 

Wind capacity, however, is expected to increase by at least a factor of four, and solar capacity – both large, utility-scale and rooftop – is expected to grow from a near-zero base – we passed the 100 MW mark in 2019 – to a capacity in the order of what we see now for wind; growth by a factor of 20 over 15 years. Indeed, globally, the International Renewable Energy Agency, in its 2019 review of employment in the sector, shows the highest growth in jobs due to the uptake of solar photovoltaic systems. 

Such a large amount of variable generation in the mix will require significant storage capacity. The ICCC report estimates more than 1000 MW of battery capacity may be needed for adequate short-term demand responses. For longer-term responses, such as dry years, pumped hydro storage may be needed or other energy vectors such as hydrogen and biomass. 

This raises the issue of fuels and ways to transform transportation. Electrification where possible – light vehicles, public transport and rail – is obvious, but hydrogen and biofuels will be necessary for heavy, long-distance transportation. For aviation, different options are being explored to improve efficiencies and electrify, especially for short-haul flights. For long haul, bio aviation fuels will be needed. Similarly, for international marine transportation, hydrogen and biofuel alternatives are considered. To guarantee our energy security, we will need to produce these fuels domestically.

The MBIE and ICCC reports highlight other aspects in the economy we will need to address over the next two decades. Vast improvements in process heat and building efficiencies are required, as well as fuel switching – for space and water heating and for process heat – from coal, lignite and gas to, again, electricity if possible or to biomass. 

The just transition will not only necessitate technical, scientific and engineering skills. Economists, business analysts and development expertise, urban planners, architects and building designers, and a range of other disciplines with specialist knowledge of the energy sector, will be required. Especially so for New Zealand to be less dependent on the global labour market. 

As we find ourselves in this unprecedented time, we have an opportunity to reflect on and consider the retooling and re-skilling of our capabilities and positioning our future workforce to meet the challenges we face in the energy sector.

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