What is New Zealand's pathway to limit global warming to 1.5°C?
Power
Decarbonising the power sector
New Zealand’s power sector CO₂ emissions have declined significantly since peaking in 2005, largely due to the country’s increasing reliance on renewable energy sources.1 Historically, New Zealand’s electricity generation has been predominantly renewable, accounting for 80% of the mix with steady growth since 2008. In 2023, the mix was 88% renewable, 9.4% gas and 2.4% coal.2
New Zealand's power mix
terawatt-hour per year
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Graph description
Power energy mix composition in generation (TWh) and capacities (GW) for the years 2030, 2040 and 2050 based on selected IPCC AR6 global least costs pathways. Selected countries include the Stated Policies Scenario from the IEA's World Energy Outlook 2023.
Methodology
Data References
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To achieve the deeper emissions reductions required by 1.5°C aligned pathways, coal use in the power sector should be essentially phased out by 2025 and gas use by 2030. In 2024, coal use for transformation (including electricity and cogeneration) rose 60% year-on-year, rebounding to pre-COVID levels after declines in 2022 and 2023.3 While New Zealand has committed to no further coal use for unabated electricity generation by 2030 as part of the Powering Past Coal Alliance, this is not aligned with a 1.5°C aligned timeline. The current government’s stance — viewing gas as a transition fuel until 2050, reversing the ban on offshore oil and gas exploration, encouraging expansion of coal production, and considering measures to improve gas access for power generation — places a 1.5°C aligned trajectory at risk.4
All modelled pathways indicate that renewables would need to supply nearly 100% of New Zealand’s electricity mix by 2030, aligning with its aspirational target of 100% renewable electricity by 2030.5
New Zealand's power sector emissions and carbon intensity
MtCO₂/yr
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Graph description
Emissions and carbon intensity of the power sector in selected 1.5°C compatible pathways.
Methodology
Data References
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Power capacity investments
In 2023, New Zealand’s total renewable capacity reached approximately 8.3 GW.6 The Deep Electrification pathway, which best captures the potential for rapid electrification to drive fossil fuels out of the energy system, would see a total 13 GW of renewable capacity by 2030. This would require an increase in investment to an average USD 1.1 bn in renewable capacity annually between 2026-2030. This investment would be primarily in wind and other renewable capacity. In the long-term, we see a shift towards more wind and solar capacity, accounting for over three-quarters of renewable capacity by 2050. The Boston Consulting Group estimated that to improve the grid’s reliability, an investment of USD 100 bn will be needed by 2050 to build and maintain the country’s electricity transmission and distribution infrastructure. 7
With no direct subsidies for renewables, investment is primarily driven by market dynamics and price signals. The government has committed to doubling renewable energy by 2050, partly by streamlining consent processes for eligible renewable energy and transmission projects under the Fast-track Approvals Act.8 However, paradoxically, the same legislation also fast-tracks approvals for coal mines, undermining the country’s decarbonisation efforts.
New Zealand's renewable electricity investments and capacities
Billion USD / yr
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Graph description
Average annual investments in power sector renewable electricity capacity and cumulative installed power capacities across time under 1.5°C compatible pathways downscaled at country levels.
Methodology
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1.5°C compatible power sector benchmarks
Carbon intensity, renewable generation share, and fossil fuel generation share from illustrative 1.5°C pathways for New Zealand
| Indicator |
2022
|
2030
|
2035
|
2040
|
2050
|
Power sector decarbonised by
|
|---|---|---|---|---|---|---|
|
Carbon intensity of power
gCO₂/kWh
|
80
|
0 to
2
|
-3 to
0
|
-4 to
0
|
-5 to
0
|
2029 to
2030
|
|
Relative to reference year in %
|
-100 to
-98%
|
-104 to
-100%
|
-105 to
-100%
|
-106 to
-100%
|
| Indicator |
2022
|
2030
|
2035
|
2040
|
2050
|
|---|---|---|---|---|---|
|
Share of unabated coal
%
|
3
|
0 to
0
|
0 to
0
|
0 to
0
|
0 to
0
|
|
Share of unabated gas
%
|
10
|
0 to
1
|
0 to
0
|
0 to
0
|
0 to
0
|
|
Share of renewable energy
%
|
87
|
99 to
99
|
99 to
100
|
99 to
100
|
99 to
100
|
BECCS are the only Carbon Dioxide Removal (CDR) technologies considered in these benchmarks
All values are rounded
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Methodology
Data References
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