Geothermal has the potential to play an even more significant role in New Zealand’s energy mix, but these major projects require large infrastructure investment. Jeremy O’Brien, Seequent Segment Director Energy writes.
New Zealand requires a trillion dollars of investment in infrastructure across multiple sectors in the next 30 years, and while the typical view of infrastructure investments is improvements to roads, hospitals and water, energy infrastructure is also a critical part of this.
This was highlighted last year when electricity prices skyrocketed. Dry lakes, low gas supplies and low wind caused a shortage of energy supply that resulted in more pressure on our communities and businesses, even though there has been significant effort to invest new renewable generation.
Geothermal energy has provided a baseload, low carbon energy source to Aotearoa since 1958 when the Wairakei power station (the world’s second) came online near Taupo. A first of its kind in the world at the time, the infrastructure at Wairakei was engineered to deal with steam and water, something that hadn’t been done in Italy or the US.
Of course, Aotearoa has a longer history with geothermal which was first used here by Māori who cooked, heated and bathed with it. Māori remain central to the geothermal industry here as owners and partners of the taonga across power generation, toursim and direct use among other things. In fact green hydrogen is produced from geothermal at Mokai as a part of Tuaropaki’s operation there.
Geothermal energy has provided a baseload, low carbon energy source to Aotearoa since 1958.
Source: Shutterstock
For a sparsely populated archipelago at the bottom of the world, New Zealand has always punched above its weight in the geothermal space. New Zealand expertise has driven development globally beginning with Indonesia and spreading globally including Kenya, Japan and the Philippines, to name a few.
Geothermal energy has a wide range of uses here beyond electricity – in forestry, horticulture and tourism for example. Supercritical or ‘superhot’ geothermal is an exciting area of research which could hold answers to meeting the country’s fast-growing energy needs, so it is encouraging to see the Government ringfence $60 million from the Regional Infrastructure Fund to explore its potential, including the infrastructure requirements for dealing with supercritical (greater than 400C) fluids.
Geothermal has uses beyond electricity generation in New Zealand, including of course in the tourism sector.
Source: Shutterstock
Also, in the past few years the geothermal industry has pushed hard to decrease emissions even further with power plant infrastructure being adapted to capture emissions and new stations commissioned with the technology (Contact Energy Te Huka 3). Geo40 also continues to push the frontier of mineral extraction from geothermal fluids with silica extraction and early pilot plants extracting lithium.
The remaining low hanging fruit for power generation was identified in 2021 when the Climate Change Commission’s Ināia tonu nei: a low emissions future for Aotearoa report highlighted the importance of geothermal in the early stages of New Zealand’s drive towards further electrification of our energy sector.
A significant proportion of New Zealand’s power still makes the journey across the Cook Strait from the South Island to the North. From a New Zealand perspective, having more geothermal power plants in the central North Island, which is rich in geothermal resource, has the simple benefit of locating that source nearer to areas of highest population density.
Seequent Segment Director, Energy, Jeremy O’Brien says the possibilities for geothermal to contribute to the energy transition are exciting.
As we head into 2025, the possibilities are truly exciting thanks to technological breakthroughs, both here and overseas, plus a changing investment landscape, and it is for these reasons Seequent entered a two-year partnership with the International Geothermal Association (IGA) in November last year to raise awareness of geothermal’s potential and promote its development.
Benefits for New Zealand from this partnership may take the form of a straightforward people exchange, shared best practices or exposure to advances in technologies where New Zealand can continue to shape the future of the industry. Recent and exciting technological breakthroughs globally include Fervo Energy’s application of oil and gas industry practices to successfully test Enhanced Geothermal Systems (EGS) technologies which now power the local energy grid serving Google’s Nevada data centres.
While we have an abundance of geothermal institutional knowledge here in New Zealand, we also have some challenges in the sector which look similar to the conversations being had in the public arena around roading and infrastructure.
We are faced with a critical question in New Zealand: how do we build confidence in investment and large-scale infrastructure projects, including geothermal developments, for the long-term benefit of us all? This is a crucial part of the infrastructure puzzle that is currently holding back the kind of investment needed to fully unlock the value of geothermal energy.
Geography is another challenge and opportunity, as often it is on these not insignificant land masses we are fortunate enough to call home. Are we yet at the point where we have any major industries, milk drying for example, which would want to move when they have made large capex investments and are already operational? That would be a very difficult decision to make the value proposition would need to be compelling to warrant the shift.
That’s a challenge we don’t have all the answers to yet, but we are seeing some innovative thinking emerge and no doubt that innovation will increase in pace if wholesale electricity costs continue to increase.
We can already see evidence that businesses will locate around a geothermal resource when the opportunity presents itself. In Taupō, the He Ahi business park has forged a relationship with Contact Energy which enables them to offer tenants foundation infrastructure – giving small and medium sized businesses access to geoheat without having to drill their own wells.
Nelson Mandela famously said: ‘When the water starts boiling it is foolish to turn off the heat’. The possibilities for geothermal energy in Aotearoa New Zealand are many, and through its partnership with the IGA, Seequent playing a part in ensuring that the heat well and truly stays on to help ensure geothermal reaches its full potential.
Seequent is proud to be a part of New Zealand’s future infrastructure sector. Today our technology is supporting all manner of projects, from supporting the extension of the Puhoi-Warkworth motorway, the City Rail Link tunnelling in Auckland, or of course supporting the next generation of geothermal generation.