Cheaper renewables force closure of NZ’s last coal-fired power units
Coal fired power plants are being forced to close in New Zealand, due to flat consumer and industrial demand for electricity combined with lower renewable energy costs. Genesis Energy, the country's major energy producer, said it is closing its last two coal plants in 2018 after the company said it has been running "at the margin of the market for a number of years".&nbsp;
Yesterday, one of New Zealand's major energy producers announced that it is planning on shuttering the last of the country's coal-fired power stations in 2018. The plant's extended life comes despite the fact that running it has become economically marginal—the company that runs it says it is locked into a coal delivery contract until mid-2017 and has substantial stockpiles on site.

New Zealand is fortunate to have abundant renewable energy sources, including a number of large hydroelectric plants. Fossil fuels have mostly been used to supplement the hydroelectric production during years of lower rainfall. But the country has also benefitted from trends that are seen in most other industrialized nations. Energy demand has largely been stable due to increased efficiency, while the cost of other renewable power sources has dropped.

In New Zealand's case, those new sources are wind and geothermal (part of the country sits atop a subduction zone). As the costs of developing wind and geothermal have dropped, the coal fired plant was being used less frequently. "These units have largely been operating at the margin of the market for a number of years, at very low utilisation rates," said company CEO Albert Brantley. Shuttering them is expected to save the company over NZ$20 million a year.

The site will continue to burn fossil fuels, but it will use smaller natural gas generators as needed. Operating at peak, the coal-fueled generators could be responsible for up to five percent of the country's carbon emissions. Closing them will bring the country closer to its goal of getting 90 percent of its electricity from renewable sources.