Geothermal energy in New Zealand

Currently, geothermal energy provides approximately 18% of our electricity and about 7-8 PJ directly as heat – more than half of which is used for industrial processes and to a lesser extent commercial uses.

While geothermal energy is expected to grow, it is unlikely to grow as fast as either demand or other sources such as wind and solar due to limitations such as cost, location and residual CO2 emissions.

How much of our electricity comes from geothermal?

2021 data is sourced from MBIE. Future indications come from the Climate Change Commission and New Zealand Energy Scenarios TIMES-NZ 2.0 modelling.

  • 18 %

    2021

  • 15-19 %

    2035

How does geothermal energy work?

Geothermal energy is heat generated within the earth’s core and stored in the ground. New Zealand has an abundant supply of geothermal energy because we are located on the boundary between two tectonic plates. This means that the Earth’s crust is thinner and the hot mantle below is much closer to the surface.

To produce electricity, geothermal fluid (a mixture of high-pressure water and steam) from wells several kilometres deep is piped to a central generation plant where it is converted to steam or used to vaporise another fluid in Organic Rankine Cycle (ORC) systems. The steam or vapour then drives the turbine generators to produce electricity.

Used geothermal fluid is usually re-injected through wells back into the geothermal field to maintain its pressure and structure – although some fluid is still discharged into rivers by older plants.

The future of geothermal energy in New Zealand 

Total geothermal electricity capacity in New Zealand stands at over 900 MW. It has been estimated that there is sufficient geothermal resource for another 1,000 MW of electricity generation – although in practice this is unlikely. 

New Zealand also uses geothermal hot water and steam directly for industrial processes including pulp and paper-making, wood processing, dairy manufacturing and heating greenhouses. There are opportunities to use more direct geothermal energy, such as for industrial process heat, or by finding uses for waste heat from geothermal power stations. 

Advantages and limitations of geothermal energy

Advantages

  • Reliable – Geothermal energy supply isn't dependent on weather conditions, making it consistent and reliable. Although it is important to note that geothermal plants generally operate as baseload generation, which means that there is little flexibility to intentionally reduce or increase electricity generation.

  • Low emissions – While electricity generated from geothermal energy produces some greenhouse gas emissions, the average emissions intensity of geothermal electricity is about one-quarter of that of the cleanest natural gas-fuelled power station. There are some technologies emerging that capture minerals and greenhouse gases and enable their re-use or sequestration.

  • Somewhat abundant – New Zealand has better access to geothermal energy than many other countries as we are positioned between two tectonic plates. It has been estimated that we have capacity to roughly double the current electricity generation from geothermal energy - although further increases might be difficult to achieve.

Limitations

  • High maintenance – While geothermal is a renewable resource, it needs careful management and monitoring to control reservoir water and pressure levels and prevent land subsidence and depletion.

  • Emissions – Geothermal fluids contain some greenhouse gases (carbon dioxide and methane) which are transported to the surface when the fluid is extracted. While amounts vary from field to field and the amount that is released depends on the design of the power station, generally levels are still significantly less than natural gas-fuelled or coal fired power stations.

  • Complex – Developing a geothermal power station is an expensive and risky proposition, including drilling of the wells which is expensive and time-consuming.

  • Location – Finding a location is tricky as specialised geo-survey techniques are required to identify locations for geothermal power stations. In addition, many kilometres of expensive steel piping is needed to connect multiple wells spread over a large area to the turbine building.

 

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Insulated steam pipework at Wairakei Geothermal Power Station in the central North Island.

EECA and geothermal energy

EECA supported Essity’s ground-breaking geothermal project – a world first. As part of an ongoing commitment to reduce its carbon emissions, the company is now converting the heat source used to dry tissue paper made in Kawerau on one of its two paper machines from natural gas to local renewable geothermal steam. The project is co-funded by EECA through the Government Investment in Decarbonising Industry initiative (GIDI Fund).

Essity's groundbreaking geothermal project a world first

Geothermal heat pumps (GHPs), also known as ground-source heat pumps (GSHPs), have been co-funded by EECA to replace all fossil fuel boilers at Christchurch Airport through EECA’s Technology Demonstration Fund.

Christchurch Airport | Decarbonisation journey

EECA has also co-funded a number of other GSHP projects as part of the Christchurch rebuild programme including The Art Centre, Christchurch Town Hall, Christchurch Bus Exchange, King Edward Barracks (Ngāi Tahu) and more.

A sustainable rebuilt city using geothermal heatpumps: The Christchurch Story(external link)

  • Learn more about geothermal energy

    Find more information on the New Zealand Geothermal Association website.

Geothermal energy for business

Explore the possibilities of geothermal direct heat and ground source heat pumps for your business.