Introduction

Welcome to our two weekly review of energy and environmental events and developments from both here in New Zealand and around the world. As always, we hope you find our collection of articles to be of interest in what continues to be a rapidly evolving area.

Climate change is a topic that continues to receive a lot of media attention, rightly so. With the Paris talks rapidly approaching it’s worth taking a look at what’s happening (or not) in New Zealand, and why New Zealand needs to act in this area.

Risks to business are clear, with some companies already seizing the opportunity, but many others risk being left behind. 40% of New Zealand’s carbon emissions come from transport, another 40% plus comes from agriculture. Other options already exist for transport, such as increases in public transport and electric vehicles, but the take up needs to accelerate. Alternatives for agriculture are unfortunately limited at the moment, but increased R&D funding by central government wouldn’t hurt.

Furthermore, New Zealand imports 30% of all the world’s palm kernel extract as feedstock for animals. We have to say we were surprised to learn of this as we believed NZ was able to provide all of its own feedstock. Given that most of this comes from Malaysia/Indonesia which is subject to significant deforestation and habitat destruction, for a moment consider if the embedded CO2e in the kernel was added to NZ’s carbon footprint… as many would argue it rightfully should be… Clean, green NZ – yeah right.

Another key point - the NZ finance community believes climate change will materially impact business, yet it isn’t yet embedded in decision-making. Why? Also, clear support for forestry is required, without it, we are likely to see large scale deforestation. In summary, a serious lack of national strategies addressing climate change adaptation and lack of leadership on this by our current government is glaringly obvious.

So why does New Zealand need to act? A major new report has shown how New Zealand's ‘clean green’ environment is under pressure on all fronts - particularly from climate change and intensive land use. The Environment Aotearoa 2015 report, looks at everything from water quality, marine environments through to air quality and it isn’t fun bedtime reading.

And as New Zealand imports 30% of the world’s palm kernel extract, we rightly examine key developments in Indonesia, where native forests are being cleared for Palm Oil plantations. As a result of deforestation and peat fires, emissions from Indonesia now exceed those of the entire US economy! Pretty staggering, when you think about it.

Our next set of articles examines some very fundamental shifts in the world order of energy supply. As recently as 2009, the International Energy Agency (IEA) were predicting that installed solar power would struggle to reach 20 GW by 2015. Few could have foretold that it would in fact explode to 180 GW – over three times the UK’s total power output. Similarly, any suggestion that a quantum leap in energy storage technology might soon conquer the drawbacks of wind and solar intermittency, were dismissed as wishful thinking, if not fantasy. And yet, we now have the Tesla Powerwall set to revolutionise the concept of affordable storage.

The shift to a renewable energy future is now unstoppable. With a few exceptions in the fossil fuel industry, no one is claiming there will be a significant fossil fuel presence beyond the next 20 years. This growing confidence is best demonstrated by the recent report released by the Global Sustainable Electricity Partnership urging additional investment in renewables to accelerate this transformation.

One thing that will need to change however is the lack of accounting for greenhouse gas biomass emissions in the European Union (EU). According to these next two articles, a EU loophole allows electricity generated from biomass to be regarded as a renewable, even when the total amount of greenhouse gas emissions is greater than the equivalent of burning coal. The loophole, probably only ever intended for burning by-products of the local forestry industry, is being exploited outside the EU, to fell large, slow growing hardwood forests for conversion into wood pellets. Perhaps they might be renewable if viewed over a 300 year time horizon, but we don’t have 300 years. It was certainly an eye opener to us.

And due to us living in a warming world, the world is facing an exploding demand for air conditioning and refrigeration – up 3,300% by 2100. Already the US uses as much electricity to keep it’s buildings cool as the whole of Africa uses on, well, everything. And since cold is still overwhelmingly produced by burning fossil fuels, emissions targets agreed at next month’s COP 21 could well be blown away by the cruel climate change irony: cooling makes the planet hotter. As an example of these future cooling requirements – it is now predicted that extreme heatwaves could push the Gulf climate beyond human endurance.

Turning our attention now to water…and firstly, water security. Water scarcity is affecting more than 40% of the world’s population and is projected to rise. Getting world leaders to commit to making changes that will improve the availability of good quality water to those most affected by this is difficult. It is hard for them to get their heads around the issues involved. But those who are contributing least to the problem are going to be hit hardest, and the issue needs to be given much higher priority at the COP 21 climate talks. It is a most basic human right and should be considered as such.

There have been a couple of innovations recently on ways of minimising waste, and cleaning up water in the process. We first look at an Australian company, Nexus Water, who have developed a way of catching the grey water from the shower and laundry, and recycling it into fresh water for flushing toilets and watering lawns. It is almost good enough to drink. The system also includes a heat exchanger for capturing the heat from the waste water to heat the fresh cold water. A great domestic waste solution.

And in New Zealand, a Rotorua company Scion (formerly Forest Research), along with Rotorua District Council, have developed a process that breaks down human organic waste and turns it into many commercially valuable products, while reducing copious quantities of unwanted smelly waste that no longer needs to be sent to the landfill. This system can also be applied to industrial situations such as dairy, pulp and paper, horticulture and meat processing. We see this as a really smart commercial solution for companies who have a significant waste streams to manage.

Thanks for taking the time to read this issue and we look forward to catching up with you again. If you have any items of interest you would like to submit, then please feel free to forward them.