The government has today published new data highlighting South Island industry’s heavy reliance on coal and the size of the job ahead to decarbonise and help New Zealand meet its climate targets.
A sophisticated new map of fossil fuel powered industrial heating boilers and systems – used for things like milk drying, making carpets and heating greenhouses – has revealed a total of 176 sites and 315 large boilers or industrial equipment across the South Island. The data is not exhaustive but captures a significant sample of sites.
Approximately 92% of the fuel use captured in the data has been found to be from coal. Further to coal the data identifies 4% LPG and 3% Diesel use at the sites captured by the tool.
EECA’s Regional Heat Demand Database is an open database that records aggregated data from existing process heat sites relying on fossil fuels, by region and sector as well as other useful breakdowns.
“Burning fossil fuels up and down the country to supply process heat for industry results in over 8 million tonnes of CO2e or over ¼ of New Zealand’s overall energy emissions per year,” said Nicki Sutherland, EECA Group Manager, Business.
The data reflects that Dairy Product Manufacturing dominates fossil fuel use in all South Island regions, with Meat Product Manufacturing next. Except in the Nelson /Marlborough /Tasman region where the Indoor Cropping sector is the biggest emitter.
Canterbury has the largest volume of boilers and therefore the most coal boilers in the South Island. Alongside Southland, they use the most fuel too.
“The data published today is estimated to cover 85% of all coal usage in the South Island. This gives us a great representation of the size of the problem – that we are committed to tackling,” said Sutherland.
“There are great initiatives happening all around New Zealand – particularly in the South Island.
“Businesses are engaged, understand their role, and are taking action. We want to build on this momentum and work with industry to do more, faster.”
The data will be used to inform EECA’s recently launched Regional Energy Transition Accelerator (RETA) programme, as well the Government Investment in Decarbonising Industry (GIDI) Fund.
RETA creates a shared system view of what is needed to decarbonise process heat use in a region.
The programme gives businesses the region-specific, supply and demand information that they need to make transition and investment decisions around energy.
Medium to large energy users in the South Island may be eligible to apply for GIDI – a Fund that is open to industrial businesses who reduce existing emissions through demand reduction or by choosing a renewable option over business as usual. The new data being made public coincides with the opening of a new GIDI funding round focused on process heat. Those interested in learning more about who is eligible for GIDI funding can visit the EECA website: EECA Industry Decarbonisation
“We are encouraging process heat users to check their eligibility for co-funding if the upfront costs of decarbonisation are challenging,” said Sutherland.
“Further EECA support is expected to become available for smaller projects in 2023.”
Current GIDI projects are visible on the new heat demand map to show where projects are being accelerated through a partnership between business and Government.
“Energy generated from a large number of fossil fuel powered boilers can potentially be replaced by heat pumps – there is a lot that can be done with energy efficiency and switching to renewables that will support our clean green reputation when producing the products and services New Zealand is known for,” said Sutherland.
“Emissions reduction is our north star – we want to see the government investment deployed at the greatest possible value for the broader public benefit.”
Process heat is the energy used to create heat – mainly by the industrial and commercial sectors for industrial processes and manufacturing.
The Regional Heat Demand Database
- EECA’s Regional Heat Demand Database is an open database that records the location and profile of existing process heat demand by region and sector across New Zealand as well as other useful breakdowns.
- The process heat sites have a capacity of 500kW or greater and use fossil fuels.
- Data is aggregated by region and by sector to maintain anonymity for the sites.
- Data from 176 sites are recorded
- 315 boilers or equipment are recorded.
- The data collection is a collaborative effort between EECA, Transpower, and Electricity Distribution Businesses across the country, with data collection led by Deta Consulting.
- Financially the cost of the work was shared, by EDBs, Transpower and EECA.
- The Regional Heat Demand Data base will also allow deeper analysis and inform EECA’s recently launched RETA programme. As well as the engagement required for sector level decarbonisation programmes.
- The South Island data was collected across the 21/22 Financial Year and represents annual fuel consumption for 2020. It is a snapshot of process heat fossil fuel consumption at a given point in time.
- This current update includes all South Island regions. EECA is expecting to have a picture of the North Island regions by mid-2023.
The GIDI Fund
- The GIDI Fund is open to industrial businesses who reduce existing emissions through demand reduction or by choosing a renewable option over business as usual, with up to 50% of the cost difference available as a grant for projects – through a contestable process.
- Projects must significantly reduce existing emissions from process heat, and applicants must demonstrate that they could not proceed at all, as early, or with as much impact, without government support.
- The current funding round runs 10 November 2022 - 2 March 2023 with application forms on EECA’s website. To learn more about who is eligible for GIDI funding visit: EECA Industry Decarbonisation
- To date the GIDI Fund has co-invested more than $69 million on decarbonisation projects across the country.
- EECA has launched a GIDI Private Finance Scheme, which provides businesses with information about participating finance providers who offer advantageous rates and terms for decarbonisation projects.